Saturday, March 25, 2006

Nonpaying Bidders and the Online Seller

One of the things that they never tell you when you start selling items online is how to deal with nonpaying bidders. Well I thought it would be interesting to take a look at the policies of the various online selling venues with regards to nonpaying bidders.

Problems cuased by nonpaying bidders

Some buyers / bidders (this is the minority of buyers) do not understand that by bidding on or selecting to buy an item in your online store they are entering into a legally binding contract.

There are several problems that arise when a bidder does not pay for something they purchased from your online store.
  1. - Obviously you do not get paid for an item.

  2. - You get charged selling fees and listing fees for the item that did not sell.

  3. - The item that was sold is no longer listed in your online store. And has to be relisted.

  4. - You may have to perform some administrative work to recover your fees. This may cost you time and money.

  5. - With many venues there is a strict time line that you have to follow to recover fees. And in the mean time your item may or may not be able to be relisted.

Item five is one of the unintended consequences of having a nonpaying bidder. If you sell unique items or one of a kind items and you only have one sample of the item then you may not be able to relist the item during the time frame that the venue gives you to recover payment.

Because it causes some of your inventory to be unavailable for sell during the time period that you are resolving the nonpaying bidder situation. In my case nonpaying bidders cause my inventory control system to get out of sync. I hate when that happens.

Policies of the Various Venues

Because the policies of the various selling venues change often it is not really practical to list all the various policies. It is best to look up the policies when you want to know what they are so that you can get the latest and greatest version of the policy.

eBay's Unpayed Item Policy

eBay's Nonpaying Bidder Policy

Unpaid item Process @

Notice that even the eBay sites for different countries have subtly different policies. This is why you should look up the policy for the site you are selling on.

Yahoo Auctions Nonpaying Bidder Policy

What is an NPB Report? @

Amazon Auctions Returns and Refund Policy. Because there are several different ways that payments are handled on Amazon it is necessary to read Amazons procedures for the way you sell items there. (i.e. marketplace, vs auctions or zstores).

Steps To Take When You Have a Nonpaying Bidder

Here are the general steps that you will probably have to take to recover all your fees when you have a nonpaying bidder. I have given a number of days after purchase for each step, but venues have different time frames when you can take each step;

1. Invoice the buyer for the sell. (On the day of purchase)

2. Notice that the buyer is not;
- responding to your invoice. (Three to four days after purchase)
- has replied that they no longer want to buy the item. (when it happens)

3. Look up the current nonpayer policies for the venue that you are selling the item on. (Three to four days after purchase)

4. Look up the contact information of the buyer (three to four days after purchase) after you get no response to your original invoice. Some venues do not make it easy to contact the buyer by ways other then their selling venue. For example on some venues you do not know the buyers email address. Some sites have special tools that allow you to look up contact information.

eBay has a special system to request the contact information for a non-paying bidder. This information can help you find other ways to contact your nonpaying bidder (by phone for example). You can only request contact information for a bidder that you are involved in a transaction with (as a bidder or as the winner of an auction). You cannot request this info from any bidder.

You will need the bidder's username and the eBay transaction number to request contact info for them. The bidder will also receive a notice with your contact info when you submit the request. This will help if the bidder does not know how to contact you.

When you request contact information for a bidder from eBay you will receive the bidder's name, city, state and phone number. To request the contact information of a bidder, click here.

If you wanted to find some info about me for example if you enter fitzgerald0_0 (that is fitzgerald, zero, underscore, zero) you will be taken to my eBay store profile.

5. Send the buyer a payment reminder or new invoice. With some venues this is consider a warning. Some venues will also send the bidder / buyer an email. This can be very helpful as it scares some nonpaying bidders into paying.

6. If you know for a fact, as in the case where the buyer has told you that they no longer want to buy the item, then you should relist the item immediately (or as soon as you can). Otherwise you may be losing potential buyers. If you have multiple items like this one this may not be an issue or if you have multiple listings of the same item.

7. Request a credit of your fees from the online venue. Different venues have different policies that govern this. Take some time to look up the policies of the venue you are using.

Steps you can take to reduce or limit nonpaying bidders

  1. - Make sure that your payment policies are explained and available to the buyer in your auction listings (all selling venues).

  2. - Select immediate payment. With this option anyone using the Buy-It-Now feature has to pay immediately otherwise the item is not sold and remains on eBay. If for some reason payment is not sent, the transaction is cancelled as if it never happened (eBay option only).

  3. - Select Paypal payment only. This option limits bidders to those who have a Paypal account which means they are familiar with how the auction process works and less likely to be a nonpaying bidder (eBay option only).

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