The Lowdown on eBay’s Money Back Guarantee for Sellers

All sellers must advertise their return policy within a listing. Regardless of whether you plan to have a generous return policy or a very limited one for your items, you will still have to abide by eBay’s Money Back Guarantee (MBG) program for items not received or declared ‘not as described’ by the buyer. This guarantee is automatically included with the purchase of virtually every item on eBay.com, eBay.co.uk and eBay.ca (all links here refer to the US scheme). The MBG aims to provide hassle-free shopping for buyers on eBay. Read on for a breakdown on how MBG works for you as a seller.

Item not received

All packages in the mail have a small chance of going missing. Once an item’s most recent estimated delivery date has passed and up to 30 days afterwards, a buyer can report the item to eBay as not received. At this point, as the seller, you have three business days to offer a solution before eBay steps in. If a reasonable amount of time has elapsed, offer the buyer a refund or replacement as appropriate.

If the buyer is not happy with your response, they may open a dispute with eBay. Aside from asking them to wait longer if necessary, eBay’s standard plan of action is to reimburse the buyer with funds from the seller’s PayPal account.

It is good practice to always send items with tracked delivery. In the case of items over a certain value ($750 in the USA), a signature confirmation and tracking are in fact required. Sending items via tracked delivery offers peace of mind for the buyer in addition to being an insurance policy for the seller. It is a great idea to always upload the tracking information to the sold item information so the buyer can track the item. If an item goes missing and a refund is required, the seller can claim compensation from the relevant mailing service after a certain time period has elapsed.

Item significantly not as described (SNAD)

This return category can compise a wide range of issues, causing it to be a bit of a minefield for sellers. Items that are damaged, incorrect, defective or misrepresented can all be classed as ‘not as described.’ Similar to ‘item not received’ returns, the buyer has up to 30 days to request a return and the seller has three business days to offer a solution, whether it be a refund or replacement.

Even if the item is not what they originally wanted or hoped for, a buyer may still choose to keep the item, in which case a partial refund may be appropriate instead. This would save the hassle of shipping the item back for both seller and buyer. The seller is responsible for the item until it reaches the buyer, so if it is damaged in transit the seller will need to follow up with the mailing service for a refund.

The most common cause of action in SNAD cases is to recall the item. The buyer has five days to return the item once the process has been started. If appropriate, sellers should not issue a refund until they have the item back and must reimburse the full amount, including both sets of postage costs via the same payment method as the original purchase. If the item is returned in a different condition than originally sent out, the seller can dispute the case with eBay.

To avoid most SNAD situations, make sure your listings are accurate and as descriptive as possible. Take lots of photos for both the listing and your own records to be able to contest or appeal a SNAD situation if necessary. If applicable, keep photographic evidence of any serial numbers or identifying features of the item.

Buyer does not like item

Buyer’s remorse is not included in the Money Back Guarantee. If a buyer does not simply like the item they have been sent, it is up to the seller whether to allow them to return the item for a replacement or refund. Some larger eBay sellers allow buyers to return items for any reason within a specified timeframe. A generous return policy appeals to buyers and can increase sales overall but also can cause a fair amount of hassle for sellers.

Keep in mind

  • PayPal also offers a guarantee for buyers with their Purchase Protection scheme. For items that are considered not as described or received, a buyer can file a merchandise dispute for up to 180 days after date of payment in the UK, US and Canada. This was recently increased from 45 days.
  • A seller will be credited with their final value fee if they refund a buyer before eBay becomes involved in a return. The original PayPal fee will also be credited minus a 30% processing charge. No other fees will be refunded.
  • Sellers must return the payment using the correct procedure and same method the buyer originally paid with. For PayPal, this involves selecting the initial transaction and refunding a payment from here (not creating a new transaction).
  • Buyers can leave positive, neutral or negative feedback regarding sellers, but it is not reciprocal. Sellers can only give neutral or positive feedback. Consider this leverage when dealing with returns – it is in your best interest to find a solution the buyer will be happy with.
  • International returns are not covered under the Money Back Guarantee program. Buyers from a different country than the seller will need to refer to the stated return policy on the listing.

Quick tips

  • Creating effective listings is one of the best ways to approach returns as straightforward sales are less likely to cause SNAD cases.
  • Correspondence between buyers and sellers should be restricted to eBay’s ‘My Messages’ service. This keeps a record of communication, useful for disputes and appeals.
  • The MBG is not applicable for every transaction on eBay. Vehicles, real estate, businesses and websites are not covered alongside items shipped to a second address after original delivery.

Have you ever experienced any tricky SNAD situations? How did you resolve the issue? Do you have any tips for new sellers to avoid problems with returns?

Gemma
Gemma
Gemma is our all things eBay expert. Originally from the UK, she now lives in Canada and travels extensively. You can read about her travels at her blog Off Track Travel.