You have seen the eBay sellers who try to evade their legal and contractual responsibilities by posting a disclaimer in their auctions to the effect: "We are not responsible for items lost in the mail" or "We are not responsible for damages if you did not buy insurance."    Not true!

Those disclaimers are false and misleading, particularly with respect to credit card transactions on eBay.

Your eBay seller IS responsible for the safe delivery of your item.  Some sellers try to take the position that their responsibility for an item ends when they give the item to the post office or other common carrier.  Wrong.

All online transactions, including all online auctions such as eBay are classified under Federal statutes as "mail order" transactions and are subject to Federal laws, regulations and guiding principles.  Federal law, in particular the laws formulated under the Federal Trade Commission or FTC, governs internet sales.

One of the guiding principles which governs online sales is that the Seller, not the Buyer, assumes all risk of loss and damage for merchandise he ships to sellers.  The seller is responsible for the safe delivery of a item in the condition as represented, in compliance with all the sellers claims. 

If the item is lost in transit, it is the seller who bears the financial risk of loss or damage.

If an item is damaged in transit, it is the seller who bears the financial risk of loss or damage.

Therefore, if a seller is shipping a valuable or fragile item, or any other item the loss of which he does not wish to pay for out of his pocket, it is incumbent on the seller to insure the item against loss or damage.  If the seller fails to insure the item, the loss is his.

eBay, or any online auction company which acts as a venue to bring together buyers and sellers, sets the rules of that marketplace.  A seller cannot disclaim liability for his responsibilities under the rules of the venue, nor the rule of law.  Many sellers try to evade their responsibility (and some do) because they or their buyers are ignorant of or in violation of rules established by eBay, PayPal, the credit card issuer, or other payment processor.

Most eBay sellers pass the cost of insurance on to the buyer by offering "optional" insurance coverage that the buyer is expected to pay.  But even though the buyer is giving the seller the money to pay for the insurance, it is the seller who is actually buying the insurance coverage, which in turn protects him.

Most buyers have no objection to paying for insurance coverage, however the FTC considers it a form of coercion for sellers to ask buyers to pay for insurance.  From our standpoint, we have no problem whatever with paying for insurance when we are buyers because, after all, we simply want to get our purchase as soon as possible and all in once piece, therefore we do not mind paying a few extra dollars!

eBay cautions buyers to buy only from sellers who offer some form of buyer protection, such as payment by a credit card or by a credit card through PayPal. 

All auctions where PayPal is offered are covered by PayPal's Buyer Protection program, in addition to the usual protection you have when you buy with a credit card.

You should always use a credit card for online purchases.  A credit card affords you more protection than a debit card as debit cards are subject to slightly different Federal banking regulations, specifically Regulation E or simply "Reg E."

A seller who accepts PayPal but who claims that he is not responsible for items lost or damaged in the mail is engaging in deceptive tactics and is in violation of the PayPal User Agreement!

If you encounter a seller who takes PayPal but who claims he is not liable for lost or damaged items, refer him to his PayPal User Agreement, specifically section 13.1,  Buyer Protection Programs, wich states in part:

"13.1 Buyer Protection Programs. If you buy an item using PayPal and either do not receive it or receive an item that you believe is Significantly Not as Described the the seller, we encourage you to open a Dispute with the seller in our Resolution Center.  By doing so, you will initiate our Online Dispute Resolution Process--a step-by-step system designed to facilitate communications between you and the seller in order to get resolution of the issue.  If your dialogue with the seller fails to produce a satisfactory result, you can then escalate the Dispute into a Claim that we will evaluate for reimbursement under one of the following programs:

a. PayPay Buyer Complaint Policy-Our best efforts program to reimburse Users for losses only to the extent that we are able to recover the funds from the seller.

b. Buyer Protection Policy-Our program to reimburse Users for losses up to (i) $2,000 USD (Top Tier Coverage Amount) for eligible items purchased on eBay and (ii) up to $200 USD (Basic Tier Coverage Amount) for all other eligible items purchased on eBay.  Please see section 13.9 to determine whether Top Tier Coverage Amount or Basic Tier Coverage Amount applies to your eBay purchase.

c. Buyer Protection for eBay Express-Our program to reimburse Users for the full amount of losses for items purchased on eBay Express.

d. Extended Buyer Protection with PayPal Credit-Our program to reimburse Users for the full transactional amount of the items purchased using PayPal credit."

Therefore, if any eBay seller who accepted your PayPal payment claims that loss or damage to an item is your problem if you did not purchase insurance, inform him -- and PayPal -- that he is mistaken.

Your eBay seller IS responsible for the safe delivery of your item.  His responsibility does NOT end when he places your item in the mail.

Your credit card provider and/or PayPal WILL hold your seller responsible for your item if it is lost by the postal service, UPS, FedEx, etc, or is never delivered to you, regardless of whether you purchased insurance or not! 

For your protection, always pay for your eBay purchases, and indeed ALL your purchases anywhere, with a credit card, either directly or through PayPal. 

When you pay by credit card you have recourse when you have a dispute with a seller. 

Further, many credit card companies double or triple the basic warranty on your item, a feature that can be very worthwhile when you buy electronic items that may break down or fail after the initial warranty period.  There are many advantages of buying with a credit card, the greatest advantage being buyer protection, not merely convenience.

When you pay by check, wire transfer, money order or bank check, you have few avenues of recourse against a seller except a complaint to the FTC, your State Attorney General, the filing of a civil lawsuit or a claim of fraud with law enforcement authorities.  The FTC home page is at ftc.gov.  You should also file a compalint with the Internet Crime Complaint Center which is a joint effort by the FBI, National White Collar Crime Center and the Justice Department.  Their home page and complaint form is at ic3.gov.

Never pay for any online purchase with a check, money order or wire transfer unless you have absolute trust in your seller.  eBay prohibits sellers from asking for cash payment, however there are sellers who will ask for cash.

eBay warns you when an auction is not covered by any buyer protection.  Heed the warning.  It will save you a lot of stress if a transaction goes sour.

As of March 17, 2008 many eBay sellers were required to offer either PayPal or a merchant credit card account to protect buyers.  All sellers who have less than 100 feedback ratings, or who have the lowest DSR ratings, or who sell items in higher risk categories are required to accept PayPal or to have a merchant credit card account.  Since January, 2007 eBay has required brand new sellers to accept PayPal.

To determine your or your seller's DSR rating tier, you can visit dsrwatch.com and enter the user ID of the seller.  If your seller's rating is 4.2 in a given category, for example, he falls in the bottom 10% which is in the "worst rating" range.  You can use the same site to determine a seller's 90 day customer satisfaction rating.  It the customer dissatisfaction rating is 5% or more he may be subject to certain selling restrictions.

For most of those sellers that means that they will be required to accept PayPal, as most smaller sellers cannot qualify for a merchant credit card account.

It is imperative that all Sellers be acquainted with their duties and obligations under the eBay User Agreement, the PayPal User Agreement, FTC rules, and Federal, state and local trade laws, as beginning in May, 2008 sellers' feedback ratings will determine their eBay selling fees: bad sellers will pay more to sell; good sellers will pay lower fees.  To avoid customer complaints it is very important that sellers know their obligations governing mail order sales.  If you do not want negative feedback or to have your "stars dinged," you need to know and follow the rules.

Sellers: for your own protection you should always buy insurance coverage on any item of substantial value or on any item which might be damaged in transit.  If your item has minimal value you may chose not to insure it.  If it is damaged in the mail, you are out of luck.  The loss comes from your pocket.

Buyers: If an item is never delivered to you, or arrives damaged, and you file a dispute with your credit card provider and/or PayPal you will receive a full refund, including shipping.

Buyers: If your item has not been delivered to you within a reasonable time, communicate with your seller to find out when it was shipped, the delivery confirmation number or tracking number, etc.

(Please do not threaten or harass your seller!  Communicate with him courteously and allow him to work with you to resolve your issues.  Most sellers are honest people; only a few are scam artists.)

If your seller does not have a delivery confirmation number or tracking number, he will never be able to prove delivery of your item.

You may file an "item not received" report with eBay, PayPal or your credit card provider when your item has gone undelivered for 10 days, however it is not uncommon for items to go undelivered for much longer, depending upon method of shipment.  Parcel post and media mail are extremely slow.  Federal law, specifically the "30 Day Rule" of the FTC, requires your seller to ship your item within 30 days.  However eBay and PayPal require your seller to ship within 7 days of receiving cleared payment.

If you have not received an item by 30 days from the date of payment, you must immediately file an "item not received" report with eBay, PayPal and your credit card company.  You may file the notice as early as 10 days after payment.

If your item is not delivered in 30 days you will receive a full refund, INCLUDING SHIPPING, from your credit card company or through PayPal.

If your seller says "Sorry pal, our sales terms clearly state that we are not responsible for items lost in shipment if you did not buy insurance," you now know how to respond to him.  You will receive a full refund.

Trade safely and...follow the rules.