7 ways to avoid unpaid items

19/02/2008 at 19:48

Auctionbytes point to a report claiming that one in ten eBay transactions results in an unpaid item. Though I haven’t managed to see the actual report, I find the statistic literally incredible: even in the olden days before PayPal, when more than half my buyers paid by cheque and envelopes stuffed with dollars used to wing their way across the the Atlantic, I didn’t hit 10% NPB rate.

Now we do have PayPal, over my last thousand transactions, I’ve needed to file eight unpaid item disputes, only two of them were closed, and one of *them* paid up after she got her unpaid item strike. If my NPBs are 0.1%, that must mean some other sellers are averaging way above 10%.

So I thought I’d take a look at some ways to avoid unpaid eBay items. No doubt experienced sellers are already doing most of this, but I hope some newer sellers will pick up some tips. The golden rule is to give your buyer as many chances to pay, and as few excuses not to pay, as you possibly can…


time is money

Take PayPal

I remember so well, back in 2001, the first buyer who told me if she couldn’t pay with PayPal, she wasn’t going to pay at all. If you only accept cheques and postal orders, you’re going to have to deal with a lot of buyers who give you that same message: yes, you’ll have PayPal charges to deal with, but better to accept that upfront and allow for them in your pricing. Buyers don’t care about your PayPal fees; they want the speed, the convenience and the perceived security of the payment system that’s built into eBay. Give them what they want.

Give all the information up front

Most of all, this means quoting postage in your listings. If you ship worldwide, then list worldwide postage too, not just domestic (it’ll cut down on those pesky ASQs as well). And if you only ship on Tuesdays, state that too: you don’t want to have to cancel orders that people order on Thursday for the weekend.

Require immediate payment

“Immediate payment required” means that the item does not close until your buyer has actually paid, which can be very useful in ensuring all your sales result in payment. However, it does mean that buyers cannot combine multiple purchases, so is really only useful for those who only ever sell single items.

Offer an electronic alternative to PayPal

We’ve all heard it: “PayPal have mucked up my account.” Sometimes, it’s even true. If – for whatever reason – your buyer can’t access their PayPal account, you need to be able to offer them an alternative. Posting cheques and postal orders is so twentieth century, so have an electronic means of payment you can offer: Nochex are good, or offering to take credit cards over the phone can give you the opportunity to upsell a little too!

Use your buyer blocks

no entryeBay do to some extent let you control which buyers you want to deal with, in bidder management, as you can block bidders according to particular characteristics. Criteria vary from site to site, but on eBay UK, are:

  • buyers in countries to which you don’t ship
  • buyers with 2 unpaid item strikes in the last 30 days
  • buyers with an overall negative feedback score (presumably this one will vanish shortly)
  • buyers with no PayPal account
  • buyers with no credit card on file
  • buyers who’ve bought more than a set number of my items in the last ten days.

The last two controls may be selectively applied only to buyers with 5 or fewer feedbacks.

While it can be tempting to use as many buyer blocks as you can, it’s worth being a little more selective. If you sell craft items, for example, you probably want to leave the multiple purchases one alone. People who aren’t intending to sell don’t have much of an incentive to have a credit card on file (unless they’ve used it to verify their account instead of telephone verification). And blocking buyers from countries to which you don’t ship doesn’t guarantee that a UK-registered buyer won’t buy your mobile phone and then ask you to ship it to his nephew in Nigeria – but it does mean that the nephew can’t buy it for himself.

You can check who’s being hit by your buyer blocks; if too many buyers are being caught, you might want to consider relaxing your choices a little.

Keep communicating

I remember, a long time ago, Chris telling me his strategy for dealing with non-paying bidders. “I email them,” he said, “then I email them again. Then I phone them. I make it so they pay just to get me to go away.” If you’re selling more expensive items, a phone call to a non-paying bidder might just get things sorted: it should at least let you know if they’re *intending* to pay or not.

Even if you don’t want to phone your buyers, a schedule for dealing with items awaiting payment is important: I send a reminder after five days, another after seven, and file the UID on the tenth or eleventh (unless I know there’s a reason why they haven’t paid yet). A quick run through my unpaid items every morning means I stay on top of this and no buyer is allowed to think I’ve forgotten about them and will go away.

Forget about the word “dispute”

I wish eBay would change the word “dispute” to something more palatable, just as I wish they’d make the email they send the buyer when you open a UID a bit less snotty. But for now, sellers have to work to mitigate the effects of eBay’s attitude.

When you file a UID, *immediately* add to the dispute thread: a simple comment like “I’m sorry you haven’t been able to pay for these yet, please let me know what the problem is” tells your buyer that you’re someone who’s still prepared to communicate.

Whatever you do, there will still be the odd buyer who pays up after you’ve closed the dispute. If you have replicable stock and are willing to reverse the strike if the buyer pays you, then use the UID thread to let the buyer know this before you close the dispute.

I hope this has given you some ideas to reduce unpaid items in the future, but please share your own tips in the comments.