Trouble between buyers and sellers over online flea market service

The following shows a case where a consumer bought a brand bag claimed to be as good as new in an online flea market¹, but the bag delivered was obviously inferior in quality.

1. ¹ An online flea market is accessible via smartphone application.

Details of the inquiry

I found a famous overseas brand bag in an online flea market. It was written "as good as new" on the sales page. According to the photo on the web, no scratch was seen on the surface. I asked the seller its size and heard that it was in the preferred size, so I placed an order for the bag. I made payment 100,000 yen with a credit card using an escrow service² available through flea market application.

The bag was delivered to me today. I found several scratches and spots on the bag and the size was different from what I had been told before placing an order. Since the conditions and size of the bag were different from what had been indicated, I told the seller that I wanted to return the item. I haven't received any response yet.

(woman in her 20s, homemaker)

1. ² An escrow service is offered by an online flea market operator to facilitate transactions between buyers and sellers. The operator receives and temporarily keeps money from a buyer and transfers it to a seller after the item was received by the buyer. (Payment timing may vary from company to company.)

Summarized outcome

After receiving the inquiry, the National Consumer Affairs Center of Japan (hereinafter called "NCAC") recommended the inquirer to wait for a response from the seller for a while, informing the principle that consumer to consumer disputes should be basically resolved by parties concerned.

Later, the inquirer informed NCAC as follows: "The seller accepted me to return the item, so I asked where to send it. After a while, the seller requested me to send the item to a designated address. The seller allowed me to ship it by payment on arrival. I will send it soon." NCAC advised the inquirer to use a traceable shipping method. A few days later, the inquirer informed NCAC as follows.

• After shipping the item to the address specified by the seller, the parcel was returned to me because the seller refused it.
• Then, I shipped the item by prepayment. I traced and found that the parcel was received by the seller. However, I heard nothing from the seller.
• I reported the problem to the online flea market operator (hereinafter called "the operator"), but there has been no reply.
• I suspect the operator might remit payment to the seller.

After hearing the details from the inquirer, NCAC advised the inquirer to report the details to the operator again. It seemed difficult to resolve the dispute only by the parties concerned, so NCAC also contacted the operator to inform the detailed background. A few days later, the operator replied as follows.

• Payment will not be remitted only by the seller's request (See Diagram).
• We confirmed that the item was returned to the seller by the inquirer.
• We will urge the seller to inform the inquirer within a certain period that the item was returned to the seller. If the seller does not do so, we will return the money to the inquirer.

NCAC informed the operator's response to the inquirer, and advised her to wait for the operator's action.

At a later date, NCAC requested the operator to urge the seller to respond to the matter, and confirmed that the seller informed the inquirer that the seller had received the item.

The operator replied that the payment 100,000 yen would be refunded to the inquirer. NCAC confirmed that the credit card company arranged a refund to the inquirer. Accordingly, NCAC concluded the consultation.

Diagram: How items are traded through the online flea market

When someone buys an item posted on the online flea market, the consumer makes a payment to the operator. After the operator informs the seller that the payment was made, the item is shipped. The buyer receives the item and evaluates the seller. The seller evaluates the buyer and requests the operator to remit payment. Then, the operator remits payment to the seller.

Problems

Items are traded between individuals through online flea markets. Interpersonal disputes caused by such transactions are reported to local consumer affairs centers across Japan in a limited way. Not only buyers, but also sellers inquire about transactions through an online flea market.

According to the inquiries and complaints, disputes arose mostly from discrepancy in assertions between buyers and sellers (e.g. "The item has not been delivered yet." vs "I have surely sent it."; "It's fake." vs "It's authentic."). It is often difficult for parties concerned to resolve such disputes triggered by transactions through an online flea market because both buyers and sellers are not professional. In some cases, a threatening message was sent from one party to the other after escalated arguments.

When parties concerned were not able to resolve a dispute by themselves, either of the parties might ask the operator to mediate. In most cases, however, online flea market terms of use state, "Basically, the operator does not intervene in disputes between users." Therefore, users can seldom ask the operator to mediate. Sometimes operators decide to intervene in discussion between parties concerned. In the above case, the operator's mediation facilitated resolution and in the end the inquirer was able to receive a full refund.

Inquiries about online flea market service were mostly related to troubles between users, and have been on the increase. In February 2018, NCAC issued an alert to consumers on the problems and requested online flea market operators to make further efforts to ensure user-friendly environment (e.g. support for resolving disputes between users).³

1. ³ "Surge in inquiries and complaints about online flea market service; Beware of trouble and keep in mind that items posted there are traded between individuals." issued by NCAC on February 22, 2018 (written in Japanese)