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Dealing with Buyers' Refund Requests

Considering your options when your buyer wants their money back


Every eBay seller that sells in reasonable volume is bound from time to time to run into a transaction gone bad. There's simply no way around this; shipping damage happens, as do misunderstandings, and some percentage of every product line is bound to be defective. Of course when a buyer requests a refund, as a seller you're put on the spot. Handling such requests and doing so in a way that makes good business sense is a part of the art of being a good eBay seller.

Though your aim as a seller should be to always achieve a 100% satisfaction rate the first time around, it's also important, if you're selling business is to be successful, to establish sound practices for dealing with requests for refunds.

Consider the Item's Value

In any dispute situation, official or unofficial, you should begin by reflecting on the value of the item at issue and on the value of your time in comparison to the value of the item. Remember that any time you spend dealing with this refund request is time that you won't spend listing other items, shipping items, studying your market, sourcing in new stock, or seeing to other operational aspects of your small business.

Your goal from the beginning, therefore, is to resolve the dispute in the way that represents a satisfactory resolution for the buyer while at the same time minimizing your own total costs and risks—keeping in mind that your costs are not just monetary but also include value of the time that you spend in resolving the situation at hand.

Keep a Level Head

When a buyer contacts you with a request for a refund, or when you receive a notification from eBay or PayPal that a buyer has opened a dispute, your first inclination may be to argue your case.

You may think to yourself "oh boy, they're using it wrong" or "that was in perfect, brand-new condition when it was shipped," or even "this buyer has totally unreasonable expectations." When these are your first thoughts, it can be tempting to immediately respond by typing lengthy explanations, making accusations, or demonstrating the degree to which you feel annoyance and righteous indignation at the trouble your buyer is unnecessarily causing. "After all," you may think to yourself, "all of my other customers are satisfied with the same goods and the same service. Only this buyer is having so much trouble. No way I want to give them their money back."

Try not to fall into this mental trap. Certainly try not to spend your time explaining yourself unnecessarily. Remember, the buyer is already dissatisfied; they are unlikely to be swayed by any case you make, no matter how persuasive. They are writing you because they have already decided that they want a refund and are asking for one, not because they want to hear your version of events.

In particular, angry, annoyed, or strident responses are likely only to make the achievement of a mutually satisfactory resolution that much more difficult. The more it appears to the buyer as though you are trying to press your advantage as a seller, the more a buyer will dig in their heels and prepare to accept no solution other than the one that they initially demand.

It is therefore in your best interest to be calm, professional, and diplomatic in all of your communication and to avoid the initial impulse to spend lots of time writing long-winded replies or explanations that will only use everybody's time while not moving either party closer to satisfaction.

Considering Refunds (High and Low Value Items)

Buyers on eBay typically want refunds because there are so many sellers to choose from. When the buyer's relationship with you doesn't immediately work out for them, therefore, their first inclination is often to get their money back and try to make the same purchase from a different seller. Whether or not it makes sense for you to issue a refund often depends on the value of the item in question.

  • High value items: If the item's value is particularly high, you will of course not want to issue a refund immediately. In most cases, for high-value items, the best course of action is to request that the buyer return the item to you first, according to the refunds and exchanges policy that you posted in your item listing. Such a policy, which you should include for all item listings, should provide directions to both parties involved on who pays for things like return shipping. Remember to require that your buyer and attach a note describing the problem and an RMA number that you supply when they send the item back to you. These little additional requirements help to prevent frivolous or unserious returns.

  • Low value items: For items with a low value you're likely to have a little bit more wiggle room as a seller, since the buyer is less likely to be antsy about ensuring that they don't lose a large amount of money on the transaction at hand. Therefore, as a seller, you may wish to weigh whether it's worth your time to communicate regarding additional requirements for return shipment, or even to deal with accepting such shipments at all. For very low value items, in fact, it may simply make sense to issue a refund out of hand, no further questions asked. This minimizes the amount of time and money that both parties will have to spend arguing over a nearly valueless item. Don't worry too much about abuse or a misguided sense of justice; just as it may not be worth your time to haggle over a very low value item, low value items also offer little incentive for buyers to spend their time trying to abuse the system or take advantage of sellers.

Remember that your goal is a seller is twofold: to maximize your gains (or minimize your losses) in each transaction and to satisfy your trading partners enough to maintain your reputation as an eBay seller, thus allowing you to continue to earn top dollar for your auctions.

Of course, there are also cases in which some compromise can be found, despite a buyer's initial demand for a refund. Read on to find out more.

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