Seller Beware: 6 Tips For Avoiding Overpayment Scams

If you are selling something online, or through an ad, you may be targeted by an overpayment scam. Overpayment scams occur when someone sends you too much money, then requests a refund for the excess amount. Then eventually, the check/money order/cashier’s check for the original payment turns out to be counterfeit.

To explain the overpayment, the buyer may claim that they made a mistake, or the extra funds were intended to cover shipping costs, or they may provide one of many other reasons. The scammer is relying on your honesty and sense of fairness to get you to return funds that don’t exist. They will also offer to let you keep an amount to compensate you for your trouble. In the end, the buyer’s form of payment is fake, and you’re responsible for the entire amount deposited to your financial institution when the funds are deducted from your account.

Whether you run a business, or just want to sell a personal item, follow these tips to help avoid overpayment scams:
 

1. If you receive a check or payment for more than the agreed upon sale price, send it back or cancel the order and ask for another payment with the correct amount. No matter how tempting it is, do not accept a payment for more than your selling price. If a sale is concluded before you discover the overpayment, try to cancel it, and do not agree to return any overpayment. If possible, ask for payment in cash and provide a receipt.


2. Do not ship any item or return any funds until you are sure the payment is valid. Even when a payment clears in your account, the money can be withdrawn later if the financial institution determines that the check is fraudulent or the true account holder (if an account number has been stolen) reports unauthorized activity. Remember, just because the financial institution makes the funds available to you, it doesn’t mean they have cleared the other financial institution.


3. Only use secure payment methods you are familiar with. Instead of accepting checks, which offer less protection from fraud, accept cash or a person-to-person payment through trusted, secure payment systems, such as Zelle, Venmo, Popmoney, Apple Pay or Google Pay. This may dissuade scammers from targeting you in the first place. Some auction sites and payment apps also offer added protections for sales transactions.


4. Be cautious when a buyer proposes alternative payment or delivery methods. A scammer may try to involve another shipper, or they may suggest the seller return excess funds through online banking transfer, gift card or a wire transfer such as Western Union. With these nearly untraceable methods, you will have little to no recourse if something goes wrong.


5. Communicate your policies up front. When listing your ad or item for sale, specify the terms you will accept for payment and shipping. You can also review the safeguards experienced sellers use in their listings.


6. Keep it simple, and consult help early. If a buyer makes alternative requests that complicate the transaction, walk away. If using an auction or reseller site, such as eBay or Amazon.com, follow their policies, which may prescribe one way only for documented messaging. This is for your protection to avoid contact using your personal phone or email.
   
   If you have concerns about a sale in process, contact the listing or ad service you used. They often have a fraud department experienced in advising you on your situation.

By following a few sound practices, you can avoid become the victim of a scam when selling your personal items. The old saying is very true in these situations, if it looks too good to be true, it probably is too good to be true.

If you believe you’ve been targeted by an overpayment scam, report it to the Federal Trade Commission.