eBay Return Fraud Exposes Service Metric Penalty Conflicts & Seller Protection Failures

UPDATE 8-19-24

The fraud continues and John Norman of MaxOptical says he is now being charged additional Service Metrics penalty fees.

He has been able to put more pieces of the puzzle together to provide additional proof that these orders and the subsequent returns are fraudulent and in violation of eBay's Abusive Buyer Policies.

Some of the toner cartridges Norman sellers are his private label MaxOptical branded items and he was able to search eBay to find fraudulent accounts that are copying his listing information, selling them without authorization, and presumably "dropshipping" by ordering them directly from MaxOptical since that would be the only source for these branded items.

MO Brand Compatible for HP LJ CP2025 304A SD CYAN TONER | eBay

<p>HP compatible toner cartridge cyan color</p>

eBayNXT PREMIUM

This account shows every common red flag of accounts I've investigated involved in triangulation and other kinds of fraud and is very likely an older dormant account that has been compromised or hijacked by fraudsters - and every single item this account currently has listed for sale is a toner cartridge sold by MaxOptical.

Once their buyer received the real item dropshipped from MaxOptical, these fraudulent sellers are then filing false returns and shipping back different, worthless items in order to force refunds - effectively making their cost of goods $0.

John has even shared a video showing that the fraudulent returns he has received back all used the same poly mailer for packaging, had labels printed from the same label printer and all used UPS labels even though the postage being printed is for USPS service.

Despite the clear evidence of fraud, not only has eBay support refused to protect Norman's account from the Service Metrics penalties, they've gone so far as to blacklist his account for chat or phone support - if he tries to contact them they simply say they've checked the notes and a resolution is being worked on, there is nothing more they can do and the chat or call is disconnected.

What's a seller to do when they've been targeted by bad actors filing false return claims, eBay seller protection is not honored and their business hangs in the balance?

Unfortunately, the owner of MaxOptical, John Norman, has found himself in exactly this untenable position - after receiving over 20 fraudulent and abusive returns in a short timeframe, Norman now faces the additional financial burden of potential Service Metrics penalty fees.

eBay's Service Metrics policies have been almost universally hated by sellers since they were introduced in 2018, largely because this rating is based on the number of cases opened - regardless of the actual outcome.

That means even if a claim is ultimately decided in the seller's favor, it still counts and can lead to being charged a 6% penalty (on top of existing Final Value and Ad fees) on all sales for 3 months to a year or more, depending on sales volume.

Norman says he suspects he is the victim of a targeted attack on his eBay account and initially provided the following details to eBay customer service to support that assertion:

I am writing to report a suspected targeted attack on my eBay account. Over the past several months, I have noticed an unusual and concerning pattern of returns, all from new accounts created less than 30 days ago.

Each of these accounts has claimed that the items purchased were defective. However, upon return, the items were found to be in new and unopened condition, which suggests they were never used or tested.

Key Details:

• Total Number of Returns: 20
• Total Financial Impact: Approximately $911.55 in potential losses due to repeated refunds and impact on seller rating.
• Common Patterns:All returns are from new accounts created within the last 30 days. Return reasons consistently claim items are defective. Returned items are in new, unopened condition, contradicting the defect claims. Some buyers have made multiple returns with similar claims.
• Account Status Impact: This pattern of returns will cause my account to go Below Standard on the 20th of next month, which will essentially shut down my account. In 24 years of selling on eBay, I have held myself to the highest standards and have never been below standard.

He has appealed to eBay support, asking them to overturn and remove the fraudulent returns, close those requests in his favor since the new and unopened condition proves the return reason is false, and apply protections for Service Metrics.

Norman says additional returns have been filed since that first support contact, with current losses just on handling the fraudulent returns now over $1000, but that is nothing compared to the potential cost of additional fees.

Disappointingly, so far eBay has not been helpful, advising Norman he can report each individual buyer account separately to be reviewed (with no promise of protection) but refusing to look at the larger pattern of abuse and fraud that is clearly in play.

I've reviewed the list of buyer accounts Norman has reported to eBay as being involved in this attack and can confirm they match multiple red flags commonly seen with brushing scams and triangulation or other fraud on the platform, including a high likelihood the accounts are either new accounts created using stolen identity info or previously legitimate dormant accounts that have been hijacked.

For example, one order MaxOptical received from a newly created 0-feedback buyer account, Heriva-59, showed the item would be shipping to a man in Illinois, but when Norman called the phone number supplied on the order, it connected to a woman in Texas who had no knowledge of that account or the order in question - a classic sign of identity theft and fraud.

eBay does appear to be taking some action on Norman's reports, with several of the accounts he has reported now showing as Not A Registered User, which makes it even more perplexing that they are still refusing to assist with removing these cases from his Service Metrics to prevent undeserved penalty fees.

When contacting @askeBay via Twitter, the rep said the risk team will action the reports (as evidenced by the accounts being removed from the platform), acknowledging those accounts engaged in behavior that violates eBay's buyer policies, but erroneously claims they are not able to remove any defects in regard to Seller Metrics.

Unfortunately for Olga, eBay's own policy pages contradict her position and explicitly show that these reported, fraudulent transactions can and absolutely should be removed from Seller Metrics.

eBay's Seller Metrics policy page clearly states that if a buyer has violated the Abusive buyer policy, any 'Item not as described' return requests they had filed will be removed from service metrics - and that this is a protection available to all sellers.

eBay's Abusive Buyer Policies have multiple points under "Behaviors We Don't Allow" that directly and unequivocally apply to this situation, including but not limited to: "don't make false claims" and "don't misuse returns."

While eBay will not provide details of their investigation, the fact that several of these accounts have now been suspended would be an indicator they were found to have been violating some part of eBay's policy and given the evidence provided by John Norman in this case, it is absolutely clear there is a pattern of abusive buyer behavior that without question would be eligible for seller protection under the above mentioned Seller Metrics policy.

Olga's assertion that she is "not able to remove any defects" is 100% verifiably false as I've personally helped other sellers in very similar situations get these defects "whitelisted" so they do not count in their metrics - including one sneaker seller who eventually received a refund of over $26,000 in Service Metrics penalty fees that were charged in error due to seller protections not being properly applied against abusive Not As Described returns.

eBay Authenticity Guaranteed & Service Metrics Penalty Fees

eBay’s Service Metrics policies are a clear conflict of interest -costing one sneaker seller thousands in penalty fees.

Value Added ResourceLiz Morton

eBay can and should save everyone involved a lot of hassle by proactively applying the clearly eligible seller protections for these fraudulent returns now to avoid hitting MaxOptical with incorrect penalty fees when his Service Metrics are evaluated later this month.

If they are unwilling to do so, I would recommend for John Norman and any other sellers in this situation to start filing claims with the FTC exposing the conflict of interest involved with eBay being the sole arbiter for these cases while also standing to financially benefit from additional fees when they conveniently and arbitrarily decide not to apply eligible seller protections clearly laid out in their publicly stated policies.

The Responsible Online Commerce Coalition has already filed a petition urging the FTC to investigate eBay's acquisition of collectible card game marketplace TCGPlayer, alleging among other things that eBay "overcharges TCGPlayer sellers and consumers through unfair and deceptive junk fees" a claim that could arguably apply to many of eBay's business practices on their main general marketplace as well, including Service Metric penalty fees.

With eBay facing increasing legal, regulatory and compliance scrutiny across its entire business as well as an investor recommended "Values Assessment", now would be an excellent time to re-evaluate the entire Seller Metrics policy with extortionate penalty fees and Trust and Safety procedures that fail to protect legitimate sellers who are targeted by abusive buyers.