Wednesday, November 30, 2005

How To Avoid An Auction Scam Without Really Trying

* All about buying Apple Computers & iPod auctions this Holiday Shopping Season.

Recently, I had a really bad problem with my eBay account. I was temporarily suspended due to ... in part ... this website. eBay disagreed with my posting of a list of buyers and sellers that I have on my internal blocked list or that I have left negative feedback for. I eventually got eBay to understand the situation from my point of view. I agreed to remove the reference section where I posted about bad eBayers entirely from Jackwhispers. If you are ever in a bind with an eBay problem, don't hesitate to contact me. I am very kean on eBay as I have been a member for almost 9 years, taught eBay at a local technical college, and have been involved with several ebay ventures. I also list and sell about 100 Apple parts a month (used to do about 250) and buy maybe a dozen items a month from eBay.

Later this week ... I hope to bring readers a story about the problems with eBay listing companies. One in particular, that I have dealt with on a large scale called; BIDZIRK.

Some primer notes for this upcoming article:

These listing companies (where you take items to them, they list them, and send you a check) are not upfront about their fees

It seems reasonably fair for them to take out 25% to 35%, but by the time you get your check ... you are often splitting your auction 50 / 50. For most items, this is unfair and often less than you would receive from having a yard sale or having a day at the flea market, listing it in the local paper, or taking it to a specialized curious goods dealer (ie, pawn shop, collectibles shop, comics shop, etc)

These companies often have generic, mediocre listings that do not get top dollar.

Sometimes, these companies charge outrageous shipping and handling charges for your item, therefore lowering the final bid.


"How To Avoid An Auction Scam Without Really Trying"

eBay ~ Weird Al Yankovic from the iTunes Music Store

Mac customers are an easy target. Most of us have the money to cough up, but are still frugal. Some of us, can't afford the premium price that Macs (even used) command and so are often on the prowl for the best deal.

Here's an interesting thought: Did you know MACS spelled backwards is SCAM?

Tips for eBay & Yahoo auctions:

The rule of: "If it's too good to be true it probably is" - should read "If it's to good to be true it definitely is" for auctions.

Avoid buying a new product at auction ...

If the item is for sale at less than 30% of current retail - sorry it's not a deal - it's a scam

Think about it, at 30% - you are paying less than it cost APPLE to make it. Average net for Apple on products is 22%

If the seller doesn't offer one of the following, don't buy:

Credit Cards
PayDirect (As of Jan 2005, Paydirect is no longer available)

Do not use the following:

Money Order/Personal Check

With a money order or personal check you have recourse through the post office for Mail Fraud, but the process can take up to 2 years! It is illegal, if even if your item did not get shipped, to cancel a check. This can be used in court against you. The seller could say, the buyer cancelled the funds so, I never shipped. You may be out court costs and may owe damages to the seller.

With PayPal; ONLY fund the charge WITH a credit card - UNLESS you are confident in the seller.

A seller CAN NOT (according to both services regulations) specify that funds come from a balance or checking account.

If you don't pay by credit card you have NO RECOURSE - PayPal usually won't be able to recover the funds if you don't receive your shipment. Paypal now offers insurance and it is reasonably good about claims ... however, if you received the item and it is damaged, not what you ordered, or breaks within 30 days ... and the seller won't make right on the auction ... PayPal makes you send the item to them for inspection in order to pay out on the claim. In some cases paying for insured shipping to Paypal could result in a net loss as they do not usually refund the shipping costs of the original shipment. So, for example if you paid a high shipping and handling fee for an eBay auction and the shipping is reasonably high to ship the item to paypal, you may end up almost paying for the item and it's insurance yourself!

EXAMPLE: You won item for $15 - ITEM cost $25 to ship from seller - ITEM cost $15 to send to PayPal for claim - your gain = $0.00

Of course, this process does serve to lodge complaint against the seller and could result in the seller's suspension from Paypal and eBay.

By my estimate on April 2 2004 (by a quick overview of the entire eBay & Yahoo Macintosh auction sections):
* checked again on November 30 2005 same stats below hold true

Yahoo: 75% appear to be scams
eBay: 10% appear to be scams

But the real statistic here is: there are 19300 items in the Mac categories on eBay (if you exclude the iPod); only about 30 on Yahoo auctions.

If you include iPod auctions the figures get better (but are still bad) for Yahoo auctions and the figures are abyssmal for eBay:

eBay iPod auctions: about 40% seem to be scams
Yahoo iPod Auctions: about 60% seem to be scams

Any seller that won't provide you with a verifiable address AND phone number - NO MONEY! If sending more than $200 - call them!

Presale auctions are ponzi schemes - they don't have the merchandise - they may pay off a few people every now & then by refund or actual product shipment in order to get a positive feedback comment.

Scenario: If I have 50 sales of $2000 each (avg Mac price) every MONTH - I only have to pay off 10 people!! WOW! I just netted $80,000! A lot of sellers are selling things that won't ship to even Apple for several MONTHS! IE There were "presalers" selling 17" PowerBooks in January when, if ordered just two weeks after the introduction, wouldn't arrive in this country until May 6th.

Both eBay and Yahoo have regulations on Presale Auctions. One rule being that the shipment of the presale item must be made within 30 days or the money should be refunded. If you look through most "presaler's" feedback you'll see "Never received", "It's been 2 months, where's my laptop"

Make sure to always review feedback. With eBay and Yahoo, also read the feedback the seller has left. Have they left a lot of negatives? Have they sold a diverse range of items? How active have they been? How long have they been selling?

Some sellers charge very high shipping/handling rates. Some people charge $8 to ship a keyboard then mail media rate for $3.55. It is illegal and considered mail fraud to ship anything other than books or CDs/software or manuals via media rate - all other items must go parcel post or Priority/First Class if mailed by the US Postal Service.

Federal banking law, PayPal, and Paydirect regulations prohibit ANYONE from charging a surcharge on credit cards or for their use. This is by FTC law considered "part of doing business & should be built into to the retailer's cost" Yahoo auctions and PayPal payments are governed by California Law that prohibit credit card surcharges.

See the Paypal User Agreement Payments sections / subsection V

Some auctions to be cautious of:

1. Radeon 7000 PCI & 8500 AGP video cards are often PC products; flashed with the Mac video card ROM. Usually there aren't any problems, but the cost of a PC video card is very cheap in comparison to a Macintosh version, and the work it takes to flash them is is minimal, if you have the proper equipment. The majority of the time, a flashed card, will not function properly with a major system upgrade; such as X.2 to X.3 or 9.1 to 9.2.2

2. Tech CD's for auction containing Apple Service Source PDF files have to be considered burned CD-R's unless you see an actual picture of the CD sourced from Apple. Of course, you can download most of these files off the web, just Google. It is illegal to SELL Apple Tech CDs due to copyright and trademark infringement. It is also illegal to distribute Apple part numbers, even though, most are on the web.

Here is a such a source: Apple Manuals

3. Hard drives. Many sellers will just print out new labels, and affix them to Maxtor store bought hard drive,s and call them "original iMac/original G4" hard drives. Same goes with SuperDrives - just store bought Pioneer A05 & A06 drives with a home printed Apple label on them.

eBay and Yahoo auctions are pretty much your only source for reliable auctions without hassle. eBay obviously moreso. Other companies sell your email and personal contact information, are not legit, or are just wannabes!


Anonymous said...

Thank you for that post. It was very informative. Being that I am in need of a 2x AGP video card for my old G4 tower, my only option seemed to be eBay. But since all the cards I have run across were PC cards flashed with Mac ROM, I will leave those alone b/c I would like the video card to work across upgrades. All-in-all, great read.

pooter said...

This advice seems good. As a seller I was recently stung by not understanding Paypal as well as I might have. I sold a broken iBook which was purchased with Paypal. I received positive feedback and paypal payment and thought everything was fine.

Six weeks later, I get notice of a chargeback on the credit card. Came to find out that since I sent it via the USPS with "delivery confirmation" and insured I was not covered by Paypal's seller protection policy, which requires a returned signature - for anything over $250, which my broken iBook was by $15.

The same buyer commited the same fraud to several other people at the same time. I ended up being very disappointed in PayPal. It gave me some understanding why some people request no credit cards if using PayPal because of the potential of an indefensible chargeback. I also believe that as a seller you will have no protection if you ship to an unconfirmed address.

thought this might be a helpful addition...