I can't help but wonder what's going on with some eBay sellers. Some items are so cheap they have to be making a loss, which makes me think: money laundering. I just received an item priced at £1.39 inc VAT and postage, which was sent as a small parcel, 1st class, signed for. Postage cost: £4.30 (ok, a bit less on account). This is an extreme example, but I often think "they can't have made more than about 2p on this, not worth the time stuffing the envelope". Am I the first person to spot this? Is the seller just an idiot or is eBay being exploited to launder money?
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Depends what the item is
Someone actually trading new stuff, or just clearing out old tat they have lying round the house and giving it one go on eBay to see who bites before taking it to the tip
Oh, definitely trade sellers, with extensive selling histories. I could believe sometimes they're testing the market for a particular product, but it seems a bit too widespread to me for that. Also doesn't explain selling an item for £1.39 all in when the postage alone must have cost significantly more than that, even if the item itself fell off the back of a lorry. I think that particular seller must be an idiot though, as even if they were laundering money there's no need to send it signed for when that wasn't specified or requested...
I've seen some weird things
Such as when looking at completed sales I remember seeing a PS2 sold for 5 times the market price and thought why would someone do that? All I could think of was that it might be a good way for someone to money launder......
Exactly Mekabear. Although I guess it's harder in that case. Presumably the buyer is involved there, and so they've probably got to get the money into a paypal account. If it's just the seller up to no good, they can be paying cash for goods and for postage at the post office and receiving clean electronic funds....
I bought a phone from ebay
I bought a mobile phone from ebay for £100 freepost when the RRP in the O2 shop was £125. I assumed that the seller had bought them in bulk at a discount. Quite shocked when I received the parcel by special delivery (circa £5 cost). Even more shocked to see that the seller had just been to the O2 shop and bought it for £125 in cash - he'd left the receipt in the box! So he made a £30 loss plus the ebay and paypal charges. That can only have been money laundering - or alternatively the seller was a complete pillock!
Playing the game?
Could these sellers be playing the auction game, albeit poorly if offering premium postage options?
I had a friend who used to sell trainers on Ebay as a 2nd income. He'd go for limited edition, collectors items and buy as many as he could. Sometimes he would make a loss (similar to the examples above), but honour is selling commitments. However, quite often, he would make big profits. Apparently, City boys in particular seem willing to pay big amounts to get 'cool' trainers, without having to make the effort of going to the right shop on the right day etc...
He only stopped because HMRC threatened to come down on him. Considering he had a fairly low primary income, and ebay sales were not that high, HMRC seemed to be acting harshly...but that opens up a whole new debate!
Ken, I think there's only one answer to your purchase. A money laundering pillock!
Jon, in my experience they're always buy it now only.
It reminds of a different scam though. I once aauctioned a broken cross trainer, for parts, just to get rid of it without driving to the tip. It started at 1p, collection only. I got 1p. From someone in Blackburn, when I live in Sussex. I pointed out that it really wasn't worth him driving right across the country for, and he said he couldn't collect it for a couple of weeks, so he suggested I keep the 1p, we give each other positive feedback and call it quits. So he was just buying positive feedback for his eBay account, I feel...
Anyway, I guess the moral of the story for AWeb users is keep it in mind when you're approached by potential e-commerce clients, especially if they're making a loss!
Feedback
On eBay there's a whole world of trades whose only purpose is to inflate feedback scores.
I know there are some rather dumb fraudsters around
But there must be at least 101 easier and better ways to launder money than doing this (which is all traceable), so I think it must be to do with gaining Ebay brownie points as suggested above or they are simply selling stolen goods or unwanted birthday presents etc..
Insightful stuff
I've used Ebay less and less in recent years. Reading this thread has highlighted some interesting stuff.
whatdoyou... - okay, I guess I should have figured it was a 'buy now' purchase. That does seem more unusual.
Justin - was going to say a similar thing. Ebay would leave quite a big 'digital fingerprint' for a start. And having sold a few items on there, and gone through the pain of creating listings, it seems like a horrible way to launder any useful amounts of cash. That said, I know little about alternative methods so my opinion may be wide of the mark!
To throw another idea into the mix, could someone buy a new phone to get a box, cables, receipt etc and then swap that phone with a dodgy alternative of the same model? Effectively laundering the goods rather than the cash? Do buyers check codes / serial numbers etc?
Again, seems high risk as you can be traced. I'm just having some fun in being mischievously creative!
Postage
In regards to the postage costing more than the item I know a few people who sell stuff on eBay and use their works postage service to send it so they don't actually pay the postage. I assume their employers are unaware of this and therefore is in effect theft but I have never asked to know for sure.
I have tried selling mobile phones which have sold for more than market value and then the buyer messages to ask to pay by cheque and wants me to send direct to Africa or similar type scams. I now firmly say on all items I sell that I will only send to UK.
In the paper today
Was something about there being loads of counterfeit goods being sold on these kind of sites too. I think the money laundering idea is a red herring.
As long as it does nt have a postmark Torre Annunziata Napoli or all points south should be OK ...
I'm enjoying this debate! I suspect all of the above are going on, the question is how much of each...
I don't see why the money laundering idea is a bad one though. Obviously it's going to be difficult to launder very large sums, but it seems quite straightforward to me that someone could go to Wickes, buy a job lot of some DIY component or other for cash, go to the post office and buy a load of jiffy bags and stamps, then sell the items individually for a bit under cost (therefore a bargain if you just want one of something but normally would have to buy a pack of 10, for example, and so they should sell fast). Seems like a fairly straightforward method to me, only likely to be spotted if they become the subject of a tax investigation?
Which raises another question. How many ebay traders out there have grown from selling a few second hand bits out of their garage to carrying on a trade, buying stuff from China and selling it on Amazon and eBay, have never told HMRC, never spoken to an accountant and possibly have never even considered the idea that they ought to be paying tax on their profits? Perhaps now they've realised, but are so far down the line they couldn't pay their back taxes and so are continuing to bury their head in the sand....
There was a good case in our local paper re a Catering firm. They bought a shop and turned it into a sandwich/pie shop that supposedly also did outside catering. Never did any obvious marketing nor advertising and the shop was barely open - very few hours per day - and never had much choice available.
The authorities must have received some intelligence because it was raided and the owners were prosecuted for drug dealing and money laundering. According to the local paper, certain customers were paying way over the odds for food in order to receive drugs or to turn dirty money into clean money.
I also remember reading similar on the internet a while ago, about some kind of shop or wholesaler selling trays of keyrings in crazy quantities that was somehow a front for money laundering.
It's certainly something at the front of my mind these days when I take on new clients or review client book-keeping where the figures seem too good for what I know of their business, i.e. very high sales figures or high margins compared with other similar clients. Luckily, so far, I've managed to satisfy myself (and put notes on the file accordingly), but it's certainly a worry as I don't want to get caught up in anything dodgy.
Absolutely, call the cops....
....money laundering on this scale needs to be nipped in the bud......NOW!!
On the other hand - I have an ebay trader client who sells lots of low-cost items and used to do pretty well until the latest Royal Mail pricing changes which doubled post costs on slightly wider pieces. He's VAT-registered, and has to sell off his accumulated stock in competition with unregistered/"hobby" traders, so he does sell at a loss but at least he's bringing in some cash.
Money laundering for beginners
Buy a football club. This comes with the added bonus of being able to sack a manager every couple of months.