How to Protect Your Small Business When Selling Online

When you sell online via a website or ebay or other third-party selling platforms, there are many benefits for the business. There are lower overheads compared to having a retail unit, and you can reach a wider audience than those in your local area. 

But there are also a great many risks that come with selling online too. When you get a bad-faith buyer, you’re likely going to face things like return fraud, false claims, and chargeback abuse. These are all becoming increasingly common lately, and many retailers are struggling with the sharp rise in poor-faith buyers.

Protecting yourself is essential, and this article is going to look at different ways you can do just that.

Transaction Documentation

Before anything goes wrong, you need systems in place that help you collate information for each and every sale. This includes activities such as photographing the item before you package and ship it. If you can, film the entire process, noting relevant serial numbers of possible or distinguishing features. Make sure your video or images include all of these details, and the box, product, and packaging are shown clearly, so you can have a bigger body of evidence should you need it.

You need to keep those with the relevant buyer information and include a record of the tracking number, shipping dates, the buyer’s username, and the item description as listed.

For higher value items, especially, this will be invaluable in the event they open a claim or dispute the condition or request a chargeback from their bank.

Recognise Bad Faith Buyer Patterns

This is a really good position to be in. If you can recognize the signs, you can prevent it from happening and protect yourself better. Most fraud of this nature isn’t random; there will be signs and patterns you can identify.

It’s things like buyers opening late “item not received” claims, buyers who return a different or damaged item than the one they purchased, and buyers who use negative feedback threats to get what they want.

These are some of the more common patterns across these activities that can alert you to what is going on.

You can’t block every bad buyer; that’s not feasible, but you can educate yourself on the warning signs and how to respond accordingly to offer proper protection so you don’t lose out.

Dispute a Fraudulent Claim

When a buyer opens a case you know is fraudulent, then you need to respond within the platform and include your evidence immediately (this is where the first point comes into play). You need as much information as possible to support your dispute against the buyer. These will be things like photos, tracking details, message history, etc. Don’t agree to a resolution outside of the platform unless it’s your own website. For example, if it was purchased via Etsy or eBay, then use their dispute process for further protection.

If the platform’s initial decision goes against you, all isn’t lost. You can appeal this if your evidence is solid. Ebay’s seller protection policies have significantly improved in recent years, and cases of clear fraudulent activity are being resolved in the seller’s favour. But if you find this isn’t being handled correctly, you can report ebay buyer to further push your case and ensure you get the right resolution and are able to take further action against that buyer or anyone else who tries this.

Have Clear Listings

One of the best ways to protect your business is to remove any ambiguous listings. These cause confusion and end up doing more harm than good. You need to be explicit about what people receive when they purchase from you. 

For example, one of the more common complaints is people not realising they were only paying for a digital download or a pattern, not the actual physical item.

You can rectify this by making it clear in the listing what exactly they are buying, including clear images, and being accurate about the condition if it’s not brand new, especially on sites where you can sell used goods.

Your product descriptions should leave no room for interpretation at all. Include exact dimensions, product condition, and flaws, if any, the features, and exactly what they receive if it’s a bundle, as well as sizing for clothing to the nearest comparable retailer, etc. This reduces people being confused and helps you in the event of needing to fight a dispute with a customer.

Have A Clear Return Policy

A clear and defined returns policy means that if anyone genuinely needs to return a product to you, they know exactly what the rules are and what can and cannot be returned. You need to make sure you don’t just apply a blanket no returns policy. It needs to be fair for both you and the buyer. Doing this results in buyers resorting to the “item not described” route, which will just backfire on you.

Instead, you need to detail the timeframe in which you’ll accept returns, the condition of the product, i.e., if they have used it, it cannot be returned, and what constitutes a valid reason, as well as who pays return shipping.

Then review each platform’s criteria for returns to make sure you meet the guidelines in place so you don’t accidentally violate them and put yourself at a disadvantage.

Know When to Walk Away

One of the hardest parts of situations like this is knowing when to push and when it’s not worth it. Not every sale is worth completing, and if you’re feeling like the buyer might be more trouble than it’s worth from the outset, you don’t need to complete the sale. If something feels off, trust your gut.

The same goes for fighting returns, too. At some point, it’s easier to just walk away. To just give the refund, chalk it up to experience and learn from it. This won’t always be the case, and it’ll be a decision on a case-by-case assessment, but knowing when to fight for your rights and when it’s just not worth it can help you to protect yourself and your business in the long run.