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Comment by eli | Hacker News Reader

I predict they will have to deal with a lot of fraud especially while they are guaranteeing prices sight-unseen.

What happens if the the item isn't what I say it is? Can the buyer get their money back? What if the item is perfect but the buyer claims there's something wrong with it and issues a chargeback?

The reason I don't sell electronics on eBay is because there are a crazy number of scam artists who know how to exploit the safeguards. In my last eBay sale (for all time), a guy bought my old cell phone, claimed it was broken, and then mailed me back a different broken phone of the same model. That is a difficult threat to guard against. Based on their site, I'm not convinced they've spent nearly enough time thinking about this... they are not just connecting buyers and sellers; they are going to be on the hook for any chargebacks.

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From their TOS[1]:

> Payment: As a buyer, your credit card is charged immediately when an auction ends for the full offer amount.

> Item acceptance: Once both parties agree that the sale is complete, the seller may request payment from FOBO, prompting confirmation from the buyer that the item has been received and accepted, as-is. Buyers must inspect the condition of the item and ONLY accept the item if it is as described in the item listing. Once an item has been accepted, the item may not be returned to the seller and is not eligible for refund.

> If an item has already been accepted, only with the seller's express consent will a refund be granted.

[1] https://sites.google.com/a/getyardsale.com/fobo-terms/

That's a good goal, but real life payments aren't quite that simple. Witness:

> FOBO reserves the right to recoup funds associated with Buyer chargebacks in accordance with Section 5 of this Agreement.

https://sites.google.com/a/getyardsale.com/fobo-terms/paymen...

They should really be using ACH or debit transactions, to reduce the risk of chargebacks.

Or Bitcoin, to remove them completely! I'm kidding, mostly, but "no chargebacks, ever!" is often touted as an advantage.

Seriously though, they should offer Bitcoin as a payment method if the seller has indicated they will accept payment in that format.

Or someone could start up a Bitcoin-specific FOBO-like service. It's not exactly rocket surgery.

I'd be very likely to use it.

You can reverse an ACH. A wire, a wire is readonly. But an ACH can be reversed.

That said, if they did that it would certainly suppress the number of buyers. As is, I would only buy on a site like that because I know I'm ultimately protected on all returns by American Express. Hell, it's nothing personal, i feel the same way about shopping at a Department store or Amazon.com or whatever. My Amex lets me return anything (up to a $$ amount) for 90 days regardless of whatever anti-consumer BS return policy the store might dream up.

a guy bought my old cell phone, claimed it was broken, and then mailed me back a different broken phone of the same model. That is a difficult threat to guard against.

Maybe for electronics there should be a way to record the serial number and require the buyer and seller to confirm that the serial number matches the one on record for the transaction at the time of delivery. That would at least reduce the chance that someone would try to return a different item.

I'd probably include a photo of the serial number in the sale images

I had a photo of the serial number -- the scammer swapped the sticker!

I use usps when I ship amazon orders, and would have contacted the postal inspectors about felony mail fraud.

The scammer swapped the serial number sticker behind the battery! If the phone wasn't inoperable, I could prove it.

(How do I know? The sticker was off-center and poorly attached + the phone was missing some memorable scuff marks. Also, my phone worked.)

Fraud apart, while the price guarantee helps solve the network effect, I'm wondering if it is absolutely necessary for the business model to work.

That's an interesting question, but I think the problem of bootstrapping enough users pales in comparison to dealing with fraud. As an aside, I read that Amazon itself buys items from their used marketplace if it believes they are underpriced.

The guaranteed price would have to be extremely low, like when you take your big box of old DVDs down to those retail stores that buy them back used for $0.50-$1.00 each.

I'm not sure if this service is hitting what I see as one of the major pain points of selling your used electronics on cragislist or eBay: You have to list each item separately if you want to get any kind of reasonable price. Who else has one of those "big piles of old computer junk" stuffed in their closet? I do. There are probably a few items in there I could still get $40 or $50 for individually, but if I just photo the whole pile and sell it, I won't get more than $50 for everything.

Bitcoin with escrow to the rescue!

:-)

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