I was somewhat amused, in a gallows humor kind of way, to learn in a recent article about credit cardsthat credit card companies take the hit for fraudulent transactions. Sure they do, some of the time. But I can tell you that retailers, especially small retailers like us, take most of the losses especially online.

Ive spent nearly two decades as an internet retailer combating online fraud. Im not alone - sometimes I get calls from friendly competitors who want to alert others of the rip-offs and scams that have recently ensnared them. Lately we have gotten hit with a series of smaller frauds that you should be aware of, since it involves the woodworking customer.

Over the course of eBays existence it has been pretty common for some random seller to steal a picture and description of an item off a regular e-commerce site and then flog it on eBay at more than the retail price. If the item sells, the seller then buys the item and has it dropped shipped to the eBay customer. This system exploited the buyers ignorance but isnt theft. It was pretty common, and I guess it still goes on. However with easy price discovery and the ubiquity of Amazon, this method of sales is hard to pull off unless the seller can get the merchandise wholesale (which the legit resellers do).

Much further along the dark road is this: sell the item on eBay for whatever you can get, then buy the item with stolen credit card information you can pick up on the Dark Net for a few bucks. You dont need to buy wholesale! Since you aren't actually paying for the merchandise - but you get the money from the buyer - it's win-win. Oh right, except for the merchant in the middle, acting in good faith (and in our case, conscientiously including tips, any available rebate information and a friendly salutation on the packing slip). We and other merchants ship the merchandise, happy for the sale, and then a month later we discover that the person who "bought" the item didn't actually do so at all. Since we thought we were sending a present bought from one person to another (with different shipping and billing addresses) we get charged by the credit card company - the stolen amount plus a penalty fee - because it's obviously our fault.

Why am I telling you this?

If you buy new tools on eBay, and the seller does not have a lot of feedback, and the price is below normal retail, chances are you are the unwittingly participating in a fraud. Obviously this might not be true 100% of the time, but if a price is too good to be true, it's too good to be true. One other tip to watch out for: the item is listed as in the US but the seller profile shows another country. I buy on eBay, although rarely new stuff, and the overwhelming number of buyers and sellers are honest folk. But the tiny percentage of rotten apples is keeping me up at night.