October 5, 2007

eBay’s Restrictions on Selling Gift Cards

Let’s review eBay’s policies governing the listing of gift cards, especially for those who are not familiar with it.

  1. The value of the gift card may not exceed $500.
  2. Gift cards may not be sold as pre-sale items and must be in hand at the time of listing.
  3. Only one gift card may be listed per week, per seller. No exceptions will be made for sellers with multiple accounts. For the purposes of this policy, eBay defines one week as seven days from the end of the previous Gift Card listing close.
  4. Multiple Gift Cards cannot be combined under a single listing.

Scammers need to quickly get rid of their stolen goods before the scam is uncovered. By limiting the amount and throttling the number of cards that can be sold, eBay is deterring those scammers from unloading ill-gotten gift cards on eBay buyers. Are these restrictions enforced 100% of the time? Based on our analysis of gift card transactions on eBay, eBay does do a good job of enforcing the above rules most of the time. However, there are incidents when eBay do let some violations through. This could be due to loopholes in their gift card policy enforcement program.

While, these restrictions are a good thing for the buyers, this does put up some hurdles for legitimate gift card resellers. Unfortunately, eBay does not offer much protection for sellers from getting defrauded. eBay pushes seller protection to the payment processors, such as PayPal, and even PayPal’s seller protection is not all that great.

For sellers, the best venue to sell gift cards is on Craigslist.org or similar local listings, because of lower or no transaction fees. Furthermore, by accepting only cash for such face to face transactions, it minimize the chances that sellers will get defrauded via chargebacks. However, for buyers, eBay is the safer venue because of the above restrictions, buyer protection, and payment protection.

eBay Restrictions on Selling Gift Cards. [eBay.com]

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