With more than 24 million users, eBay is the country’s largest online marketplace.
Buyers get to browse a vast range of goods and snap up bargains. Sellers use the site to do anything from disposing of unwanted goods for a few pounds, to showcasing all the products of their thriving businesses.
Buyer’s grievances include being sold stolen goods, or goods arriving not as described, while sellers complain about eBay’s protection schemes not working in their favour. And customers on both sides frequently comment on eBay’s poor customer service.
And thanks to the explosive growth of eBay and its rival sites, other, wider problems are emerging, such as users’ uncertainties over tax.
Below, based on readers’ experiences, we outline four of eBay’s biggest pitfalls – to help others avoid them in future.
Pitfall one: eBay’s buyer protection scheme
The “Money Back Guarantee” scheme, which launched in 2013, is one of the most complained-about issues found in our postbag.
The policy promises to refund the buyer with the cost of an item if it does not arrive or is not as described. If such a refund is made the seller has the money deducted from their account.
Needless to say, our complaints are from sellers.
eBay says the guarantee “ensures buyers can shop confidently, with knowledge that they will receive the item they purchased or their money back”.
A spokesman continued: “Sellers benefit from initiatives such as our Power Seller programme, which gives sellers who have built up a strong track-record of positive sales on eBay seven days to put right customer complaints before negative feedback can be left.”
But many readers have reported being left out of pocket as a result of eBay’s “favourable” stance towards buyers.
In once case, Matthew Wright lost 160 pounds and was locked out of eBay indefinitely after he sold a phone to a buyer in Hungary who claimed he didn’t receive it.
This resulted in eBay automatically refunding the buyer under the guarantee scheme and passing the cost back to Mr Wright, without investigating the matter. eBay later waived the fee – but failed to explain adequately why it had been so quick to favour the buyer.
Following the publication of Mr Wright’s story, dozens of other sellers described similar instances of being “unjustly penalised”.
Grzegorz Kulesza, 39, sold a Canon camera lens to a buyer in May of this year for £785. The buyer asked Mr Kulesza to send the item to a different address to that registered on his account, which the Londoner was reluctant to do.
He says he called eBay to check that it was fine to send the package to a different address, and claims they advised that it was safe to ship to a different address to the one registered as long as it was communicated via eBay’s messaging system – which it was.
Assured that he’d be protected, Mr Kulesza sent the item to the buyer the following day, but was left reeling when the buyer then opened an unauthorised payment case with PayPal.
Both PayPal and eBay said Mr Kulesza was at fault for sending the item to a different address, but he insists he was told he’d be protected if it was arranged on the platform. Under the money back guarantee scheme, the buyer was refunded the money and Mr Kulesza is £785 out of pocket.
Pitfall two: customer service failings
Telegraph Money readers often complain of their difficulties in contacting eBay and getting it to resolve problems. Emails go unanswered and calls are handled by “unhelpful” advisers.
A quick look at eBay’s own user forum highlights the frustrations customers face, with one user stating: “[eBay’s] customer service department is an absolute joke – they are rude, abrupt, evasive …”
Another simply condemns eBay’s service as “rubbish”.
A spokesman for eBay said that the “vast majority” of transactions go smoothly, but that it was “always sorry to hear about the few cases where our customers were not happy”.
He said: “In the small number of transactions that experience a problem, eBay is able to intervene and successfully resolve almost all of these cases. In fact, we spend millions of pounds a year on cases where eBay refunds both the buyer and the seller and we’re always looking for new ways of protecting both parties.”
Pitfall three: fake listings and counterfeit goods
While this is not a hazard exclusive to eBay buyers, as the largest online auction site in the UK, several of our readers have reported falling victim to scams on eBay.
Colin Labouchere, 79, spotted a Roland C‑330 Classic organ listed on the site at the start of April.
Within the listing was an email address, which is against eBay’s rules. This is to ensure that deals are not taken “off platform”.
But the fraudster had managed to bypass the marketplace’s systems by including the information in an image.
The listing disappeared but Mr Labouchere emailed the seller and they agreed on £1,500 for the organ, which the seller insisted was paid “through eBay”.
Mr Labouchere, who said he was a regular user of eBay, received what appeared to be an invoice from eBay so went ahead and paid by bank transfer.
When the organ didn’t arrive as expected, and the fraudster stopped responding to emails, Mr Labourchere knwe he’d been conned. “If eBay had taken due care it would have picked up that the email address had been associated with another scam before”, he said.
Fake mobile phones are also sold widely on eBay.A reader from Wiltshire bought a new iPhone 4 for £249.99, with a warranty, on eBay from a firm based in Hong Kong. The phone became faulty after four months and would not turn off. When the reader notified the seller, he heard nothing back.
After our consumer expert Jessica Gorst-Williams interceded, eBay acknowledged that the seller had a legal obligation to honour the guarantee that was offered.
A spokesman for the company said it would conduct a review into the seller’s account to find out why this did not happen, and refunded the customer’s money as “a gesture of goodwill”.
Pitfall four: uncertainty about tax on earnings
A “trading allowance”, introduced last year, permits everyone to earn £1,000 tax-free from “trading” activities, such as selling your own products online on sites such as eBay, Etsy or Gumtree.
This income is completely tax-free and does not need to be declared – in the past, HMRC should have been notified of every pound of income via a tax return.
But unsuspecting people unused to filling out a tax return could inadvertently end up paying enormous “marginal” tax rates simply by earning £1 more than the allowance, the Institute of Chartered Accountants warned last year.
The issue arises because individuals need to tell HMRC, in a process known as “making an election”, that they want to use the £1,000 allowance. This matters where incomes from these sources are above £1,000. Where they are below £1,000, it does not matter – because HMRC is not going to be informed anyway.
Say you had £1,000 turnover from selling books via eBay and costs of £100. That would generate profits of £900 and there would be no tax to pay, and no need to make a declaration.
However, if the turnover was £1,001 you would have to tell HMRC via a tax return. And without making an election, the tax office’s default position is to deduct expenses (£100) and charge tax on the profit. That means you would pay tax on £901 instead of £1.
Assuming the individual was a basic-rate, 20pc, taxpayer, that extra £1 of income would create a tax liability of £180.20, compared to no tax (or, technically, tax on £1) if the person had elected to use the allowance.
The Institute’s Sarah Ghaffari said: “These allowances are available to all individuals and can be enjoyed by casual sellers and those looking to make extra cash before the holiday season.
“The question is whether these individuals will be aware that they need to make an election to deduct the £1,000 allowance instead of actual expenses incurred. Failing to make the election on time could result in tax being paid on a much higher figure.”