Tips on Avoiding Fraud as a Seller

If you have never had a chargeback for fraud you are lucky! Unfortunately it is part of doing business that you can be the victim of fraud.

Outright fraud is often committed by a buyer with stolen credit cards. There are two victims: the person who had card info stolen and the merchant doing the selling. Plain and simple there is nothing you as a seller can do once you are a victim of outright fraud. If a credit card was used the company will always side with the individual whose card was stolen and will pull the money from you holding you accountable for making the sale in the first place. No amount of using one credit card merchant over another will save your money.

So what can you do? Avoid being involved in a deal that could be fraudulent in the first place!

Easier said than done right? Well yes and no. You just have to work to make sure a sale isn’t more important the knowing who you are selling to. Prevention is the name of the game.

Here are some helpful tips I hope help people avoid getting into a fraudulent situation in the first place.

1.) Delivery to a hub for pickup

Hub pickup requires a photo ID and is under video surveillance by the location. Despite the inconvenience someone who cares about the animal and who is not doing anything fraudulent will go pickup a purchase. If they aren’t willing to that can definitely be a sign you should consider not going through with the sale (red flag that things may be fraudulent). We ship several hundred animals each year and don’t regret missing a potential sale where we refused to ship to someone’s home.

2.) Only ship to the person on the payment method and the associated address

Be it PayPal or credit card shipping to the hub closest to the person and their payment method address is a given. If they ask to have a “friend” or “significant other” pick up for them or ask for a completely new address not listed on any of their info then that is another type of red flag saying you should potentially look for another buyer or ask more questions.

3.) Match ID and Payment info

If selling online or at a show make sure the person you are selling to, their ID, and their credit card info match. Not always necessary given some of the other steps described or the situation but definitely something that’s good practice if you are feeling fuzzy about the sale. I for instance now only process credit cards manually so I can ask for the zipcode of the buyer and match it up to where I’m shipping and their ID. If they don’t match I ask a lot more questions.

4.) Get to know your customer/buyer

Some other things to keep an eye out for are really relative to building a relationship with someone who wants to buy from you. If they are a reptile fan they will want to talk to you on the phone, have questions, be interested in your breedings, have references they want to brag about having, etc. If they just want to do the deal and nothing else, that’s another red flag that something may be off. Some other things that can help you in this regard:

  • How long have they had an account? (facebook, MM, etc)
  • What’s their contact info/email (can I email them directly and does it seem semi-
    normal…not bigpoppapump69@gmail.com)
  • How often/well do they respond after I respond? (is it reasonable etc)
  • Do they want a payment plan? Outright fraud will pay in full (no payment plan) to get the
    animal quicker before the stolen card is discovered.
  • Does their info match and if not talk to them about it and see how they react?
  • Are they willing to talk on the phone or hesitant etc?

In the end both selling and buying is a matter of trust but hopefully talking to the people you are working with (both buyers and sellers) can help make new connections and make it more difficult for scammers.

Hope this helps!
John Dague
JD Constriction

28 Likes

This is a great post. I want to share and experience of mine as well as an example of how it can go wrong (not snake related but still relevant). This is from my days doing cosplay work and selling pieces for profit and there was a particular buyer of a mask I was selling for $1,500 (it had been an expensive and time consuming build, over 100 hours and $400+ in consumable materials). Something about them just…didn’t feel right.

The grammar and spelling of this person was not great, but without any other reason I dismissed my gut feeling as being judgmental about the way someone typed.

I sell, receive the money, and ship the mask. All is good until about 2 or 3 days later when I get an email from a furious mother who explained it was their internet-savvy 13 year old who had made the purchase on her card without permission pretending to be her. Yikes! At this point the status of the mask was “Refused” in the shipping tracker so it was never signed for. I sent a refund and went to track down the mask I spent so much time on (as the shipping company still has it at this point).

The mask was never seen again. Lost in the mail. The “buyer” had not wanted to pay extra for shipping insurance and I never considered getting it myself to cover my ass in this sort of blowback so I was out the $1,500 and the original mask. It could not have gone worse! If I had done my due diligence, asked more questions, and trusted my gut feeling, I would have avoided this kind of situation.

Also ALWAYS get insurance on packages!

4 Likes

I had asked @jdconstriction to make this post because he and I have discussed this topic over the past few years. It’s something he’s been thoughtful about, and I knew that he had a system which has been working well. Excellent post!

It sounds like one of the key tricks for high $ sales to unknown folks is: ship to a person name at a hub, where the name comes from their payment method.

What about the rest of you? Does anyone use some of these method or have their own tips?

@mbr what’s your approach these days?

1 Like

fantastic post john!!! never thought of having the hub shipment as well for security and helping against fraud. really enjoyed reading this - thanks for the tips!!!

2 Likes

Thanks a lot for making this post. I’m a new breeder and was always wondering how do you avoid fraud like that. thanks JD!

2 Likes

Although sellers have experienced fraud I myself as a buyer have nearly experienced fruad myself from a seller on this very site. Its unfortunate because the reptile hobby is great and it sucks to have some bad apples within this community.

1 Like

@nathan_e, it is unfortunate, but there are always a few people who want to prey on others. Please check out our new post on the buyer side of things: How Does MorphMarket Protect Buyers from Fraud?

4 Likes

Thanks so much for the info. We are just starting this year and all though the money would be a big blow, i dont think i would ever stop thinking about the poor baby who would most likely be in a bad situation. Terrifying thought.

I kinda wish everyone would just ship to a hub. I ordered a couple snakes from a guy, they were supposed to be to my house by 10:30 am. They didn’t show up until after 3. Next day I got something from FedEx and it was at my house by 9. As a buyer, I would prefer them to be held in a climate controlled facility so I can just go get them instead of waiting around, knowing they are enduring more stress all day in a vehicle.

3 Likes

Great post! My Terms of Service state that the buyer must be willing to have the animal shipped to the exact billing address on the card, or pickup at the hub with photo ID. If the buyer is not ok with that, I’m happy to find another buyer who can work with my very reasonable terms that keep me protected.

4 Likes