Avoiding the Rotten Eggs

Advice to help you discourage deadbeat buyers

by Dennis L. Prince
- Mar 18, 2010

Without much debate, most buyers you encounter online certainly qualify as "good eggs," trustworthy to complete a purchase. Even so, there are the occasional stinkers that might come along to retract, renege and refute their responsibility to complete a transaction.

As a seller, you are limited in your ability to force any bad-egg buyer to pay up. Just the same, you needn't be a doormat to those flighty few who approach online bidding and buying as just another form of entertainment.

Here are some approaches to help you head off and handle the scourge of the online marketplace: the deadbeat buyer.

Understanding the 'deadbeat pool'

Because online auctions embody a gamesmanship of competitive bidding, they're often approached by some "players" with an emotional sentiment of "I just want to win." Without question, impassioned and determined bidders are exactly what sellers hope to attract—that drive to win usually works to earn higher prices for goods offered. Unfortunately, after the glow of the win wears off, some of the game-playing bidders encounter a sobering bidder's remorse. The game is over, and now there's a price to be paid, sometimes begrudgingly. Worse yet are those outright aggravating gamey bidders who bid for fun with no intention to follow through.

Of course, it would be inappropriate to cast a prejudiced eye at the online auction venues outright, not to mention the greater majority of truly responsible bidders. Still, there is no denying that the online parlor has given rise to the notion that online purchase commitments are only as good as the ether in which they're written. In an ironic turnabout of caveat emptor, these are the situations where the seller must beware.

So while it's good news that online venues have made it significantly easier to bring more sellers and buyers together than ever before, the bad news is it's easier for those rotten eggs to work their way into your niche of the online marketplace. Your job is to sniff them out before they can get into your basket.

Keep track of less-than-reliable buyers at your fixed-price venue a la a 'blacklist'

Heading 'em off at the outset

As some under-committed buyers merrily cruised the online auction places and fixed-price sales destinations to play their game of "yes, I want it, no I don't," sellers have found ways to protect themselves from such capricious shenanigans. Here are some of their best preventive tactics, which you can use to help thwart deadbeats before they strike:

  • Institute and publish a sales policy that clearly states when payment is to be received (either via online payment or snail-mail remittance). Ensure the policy stipulates you reserve your option to negate any sale if payment is not received within a stated time window (usually 10 days is appropriate).
  • If you list on eBay with a Buy It Now option, consider using the "immediate payment required" feature, which will prevent a buyer from completing checkout without paying for the goods. Note that this feature works only when PayPal is the sole method of payment. Furthermore, in an auction-style listing, the immediate payment requirement disappears, along with the Buy It Now option, once a bid is placed.
  • Block habitual deadbeat bidders' IDs at the auction venues, using either bidder block tools (as at eBay) or by reserving the right to cancel bids of deadbeats you've previously encountered.
  • Keep track of less-than-reliable buyers at your fixed-price venue a la a "blacklist." No, it's not a nice thing to have to do, but you do have to protect your interests as well as the experiences for your trusted buyers.

Usually, these methods screen out deadbeats before they can infiltrate your business. Sometimes, though, you might need to take reactive methods if a bad buyer sneaks into your store.

Managing a deadbeat that slips through

Despite your best efforts to filter out deadbeat bidders and buyers, some can still slip through (after all, you do need to attract and entertain new customers at every opportunity). If the situation seems uncertain, use these methods to help you quickly determine a buyer's commitment and capacity to make good on the deal:

  • Be prompt in your e-mail correspondence with your bidders and buyers and state your expectation to receive an equally prompt payment. If your messages go unanswered, offer a follow-up notification stating your need to complete the transaction quickly, as well as your policy to negate a sale if the pending transaction goes ignored.
  • Beware "excuse abuse" in which all manner of down-and-out, hard luck stories will come your way as to why the buyer can't send payment just yet, if at all. Show an appropriate amount of compassion, but don't allow the transaction to become drawn out and ultimately cost you a sales opportunity elsewhere.
  • If you think you have a deadbeat on your hands, cut 'em loose and move along to other customers. Quickly relist the item for bid or sale, or contact any other interested parties who have previously or concurrently expressed interest in the item.
  • Stand fast to your stated policies, yet remain calm and professional if you have to deal with a deadbeat

    A few thoughts about feedback

    In regard to eBay, there was a time when buyers and sellers were able to post feedback for one another, be it positive, neutral or negative. Not long ago, eBay removed a seller's ability to post a comment for a bad buyer as an easily detectable "negative." Today, sellers can only post what are flagged as "positives."

    Sellers, of course, are still open to receive negative feedback from buyers—even the bad ones. It's best, then, to stand fast to your stated policies, yet remain calm and professional if you have to deal with a deadbeat that might wind up inside your doors. If you receive an unwarranted negative from a bad buyer, post your response and explanation within eBay's Feedback Forum then consider notifying eBay of the situation. Officials might decide to remove the undeserved negative.

    Collect on your losses

    Finally, be sure to take advantage of fee reimbursements as offered at auction venues when you find you've been stiffed. As you make contact with the host site to request your fee, be sure to also report the deadbeat's user ID, as previously noted. Even though site suspension is easy for deadbeats to circumvent, you'll still be able to slow them a bit in their evasive efforts, and hopefully be able to spot them in a crowd should they return to try their tricks with you again.

    About the Author

    Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay…and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues.

    Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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