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Controversial Practices of eBay Users
Sellers of inexpensive items may benefit from inflating the shipping cost while lowering the starting price for their auctions, because some buyers overlook the shipping cost when calculating the amount they are willing to spend. Since eBay charges their fees based on final sales price without including shipping, this allows sellers to reduce the amount they pay eBay in fees (and also allows buyers to reduce or avoid import fees and sales taxes). This is called "fee avoidance", and is prohibited by eBay policy, as are excessive shipping and handling charges. A danger to the buyer in such cases is that in the event of defective merchandise, the seller may claim to have met his refund obligations by returning only the minimal purchase price and not the shipping costs.

» Learn more about eBay Fee Avoidance Policies


Fraud
The major fraud prevention mechanism for eBay users is its feedback system. After every transaction both the buyer and seller have the option of rating each other. They can give a "positive", "negative", or "neutral" rating and leave a short comment. So if a buyer has problems, he or she can rate the seller "negative" and leave a comment such as "never received product". Learning the system and examining a seller's feedback history is a buyer's best protection.

Weaknesses of the feedback system include:

Small and large transactions carry the same weight in the feedback summary. A user may be reluctant to leave honest feedback out of fear of negative retaliatory feedback (including "negative" in retaliation for "neutral"). Feedback and responses to feedback are allotted only 80 characters each. This can prevent users from being able to fully list valid complaints. When a user feels that a seller or buyer has been dishonest, a dispute can be filed with eBay. An eBay account (whether seller, buyer or both) may be suspended if there are too many complaints against the account holder.

» Learn more about Fraud on eBay


Prohibited Items
eBay in its earliest days was essentially unregulated. But as eBay grew, it found it necessary to restrict or forbid auctions for various items. Note that some of the restrictions relate to eBay.com (the US site), while other restrictions apply to specific European sites (such as Nazi paraphernalia). Regional laws and regulations may apply to the seller or the buyer. Among the hundred or so banned or restricted categories:

• Tobacco (tobacco-related items and collectibles are allowed)

• Alcohol (alcohol-related collectibles, including sealed containers, as well as wine sales by licensed sellers are allowed)

• Drugs and drug paraphernalia

• Nazi paraphernalia

• Bootleg recordings

• Firearms and ammunition

• Used underwear and dirty used clothing

• Teacher's editions of textbooks including homeschool teacher's editions.

• Human parts and remains

• Live animals (with certain exceptions)

• Certain copyrighted works or trademarked items.

• Lottery tickets, sweepstakes tickets, or any other gambling items.

• Many other items are either wholly prohibited or restricted in some manner.


» Learn more about Prohibited Items