How to prevent return fraud

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How to prevent return fraud

Postby kapri81 » Thu Jul 21, 2011 6:09 pm

Hi,

I want to use an escrow service (escrow.com to be precise),
since I have the most trust in it.

However, as a buyer I have one concern where I did not get any good answer from escrow.com.
Situation:

1. Buyer pays on escrow
2. I send the item (i.e. laptop)
3. Buyer says: it is not the wished item
4. Buyer sents item back.
But in the package is not the laptop, but a different item (i.e. brick)

How to complaint to escrow.com,
since the buyer has a confirmation that he send a package back to me.

Is there any protection for this case?
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Re: How to prevent return fraud

Postby kgg » Mon Jul 25, 2011 6:00 pm

In order for the buyer to receive a refund, the seller must confirm that they have received the returned merchandise. If the seller rejects the returned merchandise, they would enter a 14 day negotiation period. If the two side can not come to an agreement, It would be sent to arbitration.
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Re: How to prevent return fraud

Postby kapri81 » Mon Jul 25, 2011 9:40 pm

So I send the item,
buyer sends back a brick.

Question 1:
Does escrow.com (or any escrow system) can prevent / detect this misuse by the buyer?

Question 2:
If it goes to arbitration since escrow.com cannot solve it,
what happens with the money during that period (which I guess can take some time)?

Thanks kgg in advance for your help.
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Re: How to prevent return fraud

Postby peg » Tue Jul 26, 2011 12:58 pm

kapri81 wrote:So I send the item,
buyer sends back a brick.

Question 1:
Does escrow.com (or any escrow system) can prevent / detect this misuse by the buyer?

I think the only way that this can happen would be if there was an additional step (and subsequently cost) where you would send the MERCHANDISE to the escrow company. They would actually open the item up, verify it, then repack and send along to the buyer. As you could imagine this would dramatically increase the TIME for conclusion of the transaction as well as increase the overall cost and overhead. I don't believe escrow.com does this nor do I believe any other company does this as it's probably cost prohibitive if you consider the shipping cost of some of these high dollar (and heavy) items.

kapri81 wrote:Question 2:
If it goes to arbitration since escrow.com cannot solve it,
what happens with the money during that period (which I guess can take some time)?

It's still held in escrow until resolution is found. Better held in the escrow company (assuming they are legit as escrow.com is) then in the other parties hands especially if you are claiming they sent back a brick (or something along those lines)
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Re: How to prevent return fraud

Postby kapri81 » Tue Jul 26, 2011 1:45 pm

Question 1:
Definitely would increase costs + time.
I was thinking maybe they have a checkup weight comparison for example
(buy the tracking data of the shipping company).

Question 2:
Does make sense.

Thanks for clarification.
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Re: How to prevent return fraud

Postby CannyInvestor » Wed Jul 27, 2011 1:56 pm

Great question.

The same question occurs earlier in the process - how can anyone also know whether you sent the buyer a package with a brick in it ?
Using the standard escrow model without an inspection agent, I don't think there is a way to resolve this issue.

Using an inspection agent solves the issue, but is very expensive.

One alternative is using a low-cost escrow service like Transpact.com, which allows you to specify the escrow conditions for each individual transaction as part of its core service. That way, you can specify how you will overcome problems like the 'brick' on a transaction by transaction basis, as you see fit (and whatever is most appropriate for that transaction). You don't have to fit in with inspection schedules and with conditions specified by the escrow company, but work to your own specified conditions to protect you.

Transpact.com is UK Government Agency (FSA) authorised, and is low cost.

(Declaration - I work for Transpact.com)
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Re: How to prevent return fraud

Postby tammy342 » Tue Nov 08, 2011 1:03 pm

You posted a very helpful information. I could finally fix my challenge. Great work guys:)
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Re: How to prevent return fraud

Postby georg » Sun Nov 13, 2011 10:14 pm

tammy342 wrote:You posted a very helpful information. I could finally fix my challenge. Great work guys:)

dafür sind wir da, mein Freund... 8)
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Re: How to prevent return fraud

Postby jim12345 » Thu Apr 30, 2015 2:54 pm

really do NOT use transpact.com they are not low cost at all
One of the biggest scamming sites i have ever seen. Many many hidden charges. The changes the rules to suit. If they are going to get money they will bend the rules, if they dont get fees they will not budge. They then charge more fees and more fees. My seller got his money after i paid lots of fees only to find he had also been charged. For at $250 transaction from the UK it ended up costing $70 in fees! absolute joke and will be reported to Financial Ombudsman about their conduct. Do not use these guys you have been warned
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Re: How to prevent return fraud

Postby H8Fraud » Sat Jan 23, 2016 2:42 pm

jimf12345 wrote:really do NOT use transpact.com they are not low cost at all with phen375 2016 to try.
One of the biggest scamming sites i have ever seen. Many many hidden charges. The changes the rules to suit. If they are going to get money they will bend the rules, if they dont get fees they will not budge. They then charge more fees and more fees. My seller got his money after i paid lots of fees only to find he had also been charged. For at $250 transaction from the UK it ended up costing $70 in fees! absolute joke and will be reported to Financial Ombudsman about their conduct. Do not use these guys you have been warned


I've thought about this too. It seems kind of hit an miss whether escrow will side in your favor or not.
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