Criminals are persistent, but you can avoid falling for scams by taking some proactive steps and knowing what to watch out for. Be aware of these most common e-commerce scams.
The buyer asks you to use a specific shipping service. They may claim they can get a discount, or that they have a preferred vendor that is more reliable. In reality, they can easily contact the shipping company and reroute the order to another address.
How to avoid a shipping service scam: Use only your shipping account, review the order for other fraudulent red flags, and ship to the address on the Transaction Details page in your PayPal Business account.
The buyer asks you to use a pre-paid shipping label provided by them, but the shipping labels could’ve been purchased with a stolen credit card. Or, they may be attempting to send the package to another country, PO Box, or untraceable location.
How to avoid a prepaid label scam: Don’t accept shipping labels and only ship to the address on the Transaction Details page. This also helps ensure that you remain covered under the PayPal Seller Protection policy on eligible transactions.
The buyer provides an incorrect or fake shipping address and, when the package cannot be delivered, contacts the shipping company directly to reroute the package to a new location. Then, they file a complaint saying they never received the package and because it was rerouted, and the seller can’t prove the item was delivered.
How to avoid a package rerouting scam: Work with your shipping company to block buyers from rerouting, and also validate a buyer’s address before shipping.
A customer attempts to overpay for an item or an order and asks you to wire them the difference. They may be using a stolen credit card or account to pay you, and if the legitimate account holder reports unauthorized activity, that money can be withdrawn from your account.
How to avoid an overpayment scam: Never wire money to someone you don’t know and if a customer overpays, consider canceling the order, as it’s likely to be fraudulent.
This happens when someone contacts you to be their employee or partner. They ask you to sell products on eBay or a website, pay their supplier, and update your PayPal account address to their address. They can then conduct fraudulent transactions and you may be liable.
How to avoid an employment scam: Never list someone else’s address and never send money to someone you don’t know. You should also verify all of your suppliers.
In some cases, you might give your employees access to your PayPal Business account so they can do their job. Unfortunately, this opens you up to fraud risk. An employee might transfer money to their account, their friend's accounts, or to an offshore account. When you ask where the money went, they may tell you it was for a customer refund, used to pay a supplier or used for payroll.
How to avoid an employee theft scam:
You sold something and the buyer files a complaint with PayPal stating the product was damaged, you sent the wrong order, or the product was broken. When this happens, PayPal will ask the buyer to send the product back to you. The buyer may be telling the truth — packages get damaged in shipment from time to time. But if you notice that an item the buyer said was broken is in perfect condition or the buyer used the item before sending it back, they might be trying to take advantage of you. Maybe they found it for less somewhere else or they’re trying to avoid your return policy.
How to avoid return abuse:
If you use affiliate marketers to help increase your sales, there are some additional things to be aware of. As a refresher, here’s how it works:
Fraudulent affiliates take advantage of your revenue-share program by placing orders using stolen credit cards, then:
How to avoid affiliate scams:
In partnership with three expert business owners, the Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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