Methods for Sellers

As a classifieds seller, navigating the varying of payment methods you will accept can seem like a daunting task. Historically, the payment of choice for classifieds sellers has been cash, but there are many instances in which cash is not an appropriate payment method. Questions regarding payment methods are one of the most asked in classifieds, so when you are listing an item for sale or rent, you should always know which method you are accepting and be prepared to answer similar questions.

Below you will find various methods of payment outlined with when you should use them, as well as their advantages, disadvantages, and tips on how to protect yourself from fraud.

Payment Method
Information
Pros
Cons
Cash
 When you should accept it:

  • Merchandise under $1,000
  • Tickets
  • Services
  • If you are meeting the buyer in person

How to protect yourself against fraud:

  • Always make sure to meet the buyer in person
  • Do not accept cash mailed to you

Fraud warning = LOW

  • Simplest form of payment for classifieds
  • You are able to meet the buyer and make sure they are legitimate
  • There is no proof of purchase
  • The buyer might ask for a receipt
Paypal
 When you should accept it:

  • If you are selling on eBay
  • If you know the buyer or know they are trustworthy

How to protect yourself against fraud:

  • Best if used when selling on eBay
  • If not selling on eBay, make sure payment clears before sending the item

Fraud warning = LOW

  • Payment is immediate
  • Payment is deposited immediately
  • The payment is traceable
  • Very little protection if not selling on eBay
Credit Card
 When you should accept it:

  • If you are a car dealer
  • If you are a professional ticket seller
  • If you are a Real Estate agent
  • If you are a professional pet seller

How to protect yourself against fraud:

  • If the payment is online, make sure to collect all the information on the card: Full name, expiration date, card number and security number on the back of the credit card

Fraud warning = LOW

  • Fast and easy
  • Purchases can be traced
  • You will have to pay a percent of the transaction to the credit card company (generally between 2 and 3 percent)
Personal and cashier’s checks
 When you should accept it:

  • If you are a landlord
  • Items for sale over $1,000
  • If you must ship your item

How to protect yourself against fraud:

  • If you are a landlord, do a background or credit check
  • Get a copy of the buyer's drivers license
  • Go to the bank with the buyer and have them validate the check

Fraud warning = LOW/MODERATE

  • Proof of payment
  • Traceable to a mailing address
  • You will likely have to wait until the check has cleared to send item
  • Checks can easily be forged
Escrow
 When you should accept it:

  • If you are sending the item and trust the buyer

How to protect yourself against fraud:

  • Do a background check on the escrow service you are using. A good place to start is eBay's escrow page, as is a simple Google search
  • Make sure you trust the buyer before initiating

Fraud warning = LOW/MODERATE

  • There is a third party source that is used to mediate transaction
  • You must wait for the buyer to inspect the item before payment goes through
  • Make sure you use a trusted escrow service
Money orders
 When you should accept it:

  • If you need a proof of sale
  • If the buyer does not feel comfortable carrying cash

How to protect yourself against fraud:

  • Make sure that you meet the buyer before accepting the money order

Fraud warning = MODERATE

  • There is a proof of purchase
  • Payment is traceable
  • You must wait for your payment to clear before sending the item
  • Money orders can be forged
Bank to Bank Wire Transfer
 When you should accept it:

  • If the buyer does not have a credit card and wants an immediate transaction

How to protect yourself against fraud:

  • Verify the buyer's name and address before completing the transaction
  • Make sure meet the buyer before initiating the transfer

Fraud warning = MODERATE

  • Payment is immediate
  • Payment is deposited directly into your bank account
  • Your bank will make sure the buyer's account is real
  • Not traceable to a verified address or name
Wire Transfer Services (Western Union, MoneyGram, etc.)
 When you should accept it:

  • If you know the buyer personally and they do not live near you

How to protect yourself against fraud:

  • Only use when you know the buyer

Fraud warning = HIGH

  • Payment is instant and easy
  • Payment is not traceable
  • Buyers can use fraudulent information