So, you've had an auction close and the winner has not contacted you nor have they responded to your invoices. It's been at least 7 days from the end of auction and it is become bleaker and bleaker that any money is coming your way. What do you do?

File an unpaid item dispute.  A what? Well, let me explain!

Buyers automatically enter into a legally binding contract to purchase the item from the seller if they win the online auction or use the Buy It Now feature. eBay's Unpaid Item policy requires buyers to pay the seller for the items that they commit to purchase. Sellers with Unpaid Items are eligible for Final Value Fee credits. The Final Value Fee is basically eBay's "take" on your winning auction. Also, if the item is relisted and sells the second time, eBay will refund the Insertion Fee for the relisting. You never get back those original listing fees, but it's nice that eBay gives you some kind of break when you have to relist.

About Unpaid Item strikes and suspensions

Unpaid Item strikes are issued and tracked by eBay. A buyer gets 3 non paying bidder strikes and they are suspended from eBay indefinitely.  Any eBayer has the opportunity to redeem themselves so that buyer MIGHT get reinstated eventually. Don't forget to put a buyer on your blocked bidder list if you don't want to ever do business with them again.

Unpaid Item strikes are separate from feedback, and do not affect a user's feedback score or member profile. There is no way to tell how many strikes a buyer has against them so make sure to use your buyer management preferences to weed out anyone who has had at least 2 strikes in the past 60 days. Trust me. You don't need the hassle.

If a buyer is issued an Unpaid Item strike it will automatically be assigned to their account when the seller receives their Final Value Fee credit. This is a fantastic because why in the world should eBay, a multi-BILLION dollar company get paid when YOU didn't?

Buyers have the option of appealing an Unpaid Item strike if they believe it was undeserved. eBay does give a one-time courtesy strike removal for buyers. Yes, this does tend to annoy sellers, however, your FVF's are still credited to you. This is eBay's attempt at creating good will among the buyers.  Besides, punishment for non-payment is really between eBay and the buyer. As long as you get your final value fees back, the rest is really gravy.

There are four steps to the Unpaid Item process.

1) Sellers can file an Unpaid Item Dispute.

Sellers can report an Unpaid Item up to 45 days after the transaction date (i.e. the date when the buyer commits to buying the item and the seller commits to selling it). Usually the seller must wait 7 days after a listing closes to file an Unpaid Item Dispute. And believe me, that is a FULL 7 days...right up to the very minute the auction had ended. However, in the following exceptional cases, the seller can file a dispute immediately:

• At the time of the filing the buyer is no longer a registered user of eBay.
  
• The seller and buyer wish to mutually withdraw from the transaction.
  

In the first case the buyer will receive an Unpaid Item strike and the seller will receive a Final Value Fee credit without any additional steps.

In the second case the seller must file the dispute for mutual withdrawal. If the buyer responds to the dispute and agrees, the seller will receive a Final Value Fee credit and no strike will be given to the buyer. If the buyer fails to respond, the seller can still close the dispute to receive a Final Value Fee credit, and the buyer will not receive an Unpaid Item strike. It is IMPERATIVE that you explain the process to your buyer so that they understand that this process not only cancels the transaction, they DO NOT get a strike against their record for non-payment while you will still get your fees back from eBay. I don't recommend this mutual withdrawl in every case though because if a buyer doesn't agree, you don't get your credit and there is no second chances on that.

2) eBay contacts the buyer.

Once the seller files an Unpaid Item Dispute, eBay sends the buyer an "friendly" email reminding them to pay and displays a pop-up message if the buyer signs into eBay within 14 days of filing. There is NO WAY a buyer will not know they have an unpaid item dispute pending against them if they log in to their account at all.  The email and pop-up message will provide the following details:

• Friendly reminder to pay. The email and pop-up message will remind the buyer that payment has not been received, along with simple instructions on how to respond or how to pay for the item. If the buyer does not respond to the email or pop-up message within 7 days, the seller may file for a Final Value Fee credit. The seller also becomes eligible for a free re-list credit. This is cool because if your item sells the second time around, you get a credit for the insertion fees on that listing. While you never get your original listing fees refunded, it is nice to get SOME sort of relief.

• Mutual agreement indication. If the seller indicates that a mutual agreement has been reached with the buyer not to complete the transaction, eBay will ask the buyer for confirmation through an email and pop-up message.

If the buyer confirms the seller's statement about mutual agreement not to complete the transaction, the buyer will not receive an Unpaid Item strike and the seller will receive a Final Value Fee credit.

If the buyer disagrees with the seller's statement on mutual agreement, the buyer will not receive an Unpaid Item strike and the seller will not receive a Final Value Fee credit. The dispute will be closed immediately after the buyer responds and the seller will not be eligible to re-file an Unpaid Item dispute for that transaction. This makes things difficult because there is no way to re-open a dispute if the buyer never does actually pay. I don't really recommend using mutual cancellation because sellers get bit on the backside.

If the buyer does not respond to the email or pop-up message within 7 days then the seller will be able to close the dispute. The seller will receive a Final Value Fee credit and the buyer will not receive a strike.

Remember, you have to EXPLICITLY explain to the buyer about mutual cancellation. If they DO NOT agree to mutually cancel the transaction, you are out of luck on getting your fees back. Make sure that your buyer absolutely understands this process before you file.

3) Item Dispute Communication

The buyer is presented with several response options to communicate to the seller:

• I want to pay now. Paying for the item will close the dispute. For listings where PayPal is available, the buyer just has to pay using PayPal to close the dispute. With other payment methods (such as checks or money orders), the seller is encouraged to wait until payment is received before choosing the appropriate option to close the dispute. And absolutely DO NOT close the dispute until that payment is in your hot little hands because you can't reopen a dispute once it's closed.
  
• I already paid. If payment has already been made, the buyer may provide details of the payment to the seller for review. The seller can then choose the appropriate option to close the dispute.  The tricky part with this is that sometimes buyers claim they paid when in fact they have not. A seller can close the dispute and get credit and the buyer can appeal this strike with eBay and will have to provide eBay with proof of payment.

Remember, eBay does give a one-time courtesy strike removal so don't get too hot under the collar if this happens with one of your buyers.

• Communicate with the seller. The buyer and seller can attempt to resolve the problem by communicating directly through the eBay Web site. eBay will provide a message area where the buyer and seller can communicate with each other without relying on email. The seller can close the dispute at any time by selecting the appropriate closure option.
  

Ultimately, an unpaid item dispute is a final attempt to receive payment. Sure, a seller is no longer obligated to sell once the dispute is opened, but eBay would really prefer to NOT have to refund your FVF if a seller will accept a payment from a buyer.

4) Closing the dispute

The seller can close the dispute after the buyer has responded at least once, or if the buyer does not respond within 8 days. A seller can find all Unpaid Item disputes they have filed in their Dispute Console located on your My eBay page.  The seller has several options to close the dispute:

• We've completed the transaction and we're both satisfied. With this option, the seller does not receive a Final Value Fee credit and the buyer does not receive an Unpaid Item strike.
  
• We've agreed not to complete the transaction. With this option, the buyer does not receive an Unpaid Item strike, the seller receives a Final Value Fee credit, and the item is eligible for a relist credit.  This is the same as mutual cancellation.
  
• I no longer wish to communicate with or wait for the buyer. With this option, the buyer receives an Unpaid Item strike, the seller receives a Final Value Fee credit, and the item is eligible for a relist credit.

Note: A dispute can only be open for 60 days after the transaction date (i.e. the date when the buyer commits to buying the item and the seller commits to selling it). If the seller has not closed the dispute within 60 days, it will be automatically closed. When this automatic closure takes place the seller does not receive a Final Value Fee credit and the buyer does not receive an Unpaid Item strike. So remember, you HAVE TO close the dispute yourself in order to get the credit. eBay isn't in the business of giving away money so if you don't close the dispute, they won't credit back your FVF.

Feedback and Unpaid Items

Buyers and sellers may leave feedback for each other on transactions involving Unpaid Items even if there was a mutual agreement not to complete the transaction. eBay encourages all users to leave appropriate feedback about their trading partners. eBay will NEVER take away a person's ability to leave feedback regardless if they completed a transaction or not. However, the best part is that if a buyer DOES NOT participate in the unpaid item dispute within the dispute console, any feedback they leave DOES NOT count against your score!

Unpaid Item strikes do not affect a user's feedback score or member profile. Remember, use your buyer management preferences to prevent anyone with at least 2 strikes in the past 60 days from bidding on your auctions.