Can I Sue a Seller on an Online Marketplace?
Yes, you may be able to sue an online retailer on an eCommerce platform like eBay. A sale between an eBay seller and an eBay buyer is a contract. EBay itself is not a party to that contract, however. You may have a breach of contract claim against the seller if you do not get what you paid for or the product you receive is significantly not as described (sometimes referred to as “SNAD").
You may not need to take legal action, however. You may be able to work out your dispute directly with the seller. EBay makes the process simple. If you can't work it out with the seller on your own, you may be able to work it out by following procedures set out in eBay policy and user agreement.
Your payment method may also give rise to options. If you paid with PayPal, you may be able to take advantage of PayPal's Buyer Protection Program. If you paid by credit card or debit card, you can open a fraud dispute with your provider. And in any case, you can always file a complaint with the Better Business Bureau.
Do You Need a Lawyer to Sue an Online Seller?
You may be able to handle a dispute with a seller on your own. Having a lawyer in your corner, however, may give you leverage. And if you do need to sue an online seller (especially one that is out of state), you should consult with a litigation attorney who can provide you with legal advice and represent you. There are challenges to proceeding this way, and you will appreciate the help.
Estimates from previous years place the number of eCommerce sellers globally at between 12 and 24 million online stores. Although Amazon sells its own products and hosts online sellers as part of its marketplace, eBay operates exclusively as an eCommerce platform. It used to function largely as an auction house, but many and perhaps most sales now are done using eBay's “buy it now" feature.
We will focus here on online eBay sellers. If you want to sue eBay itself, we discuss that elsewhere.
What If I Get Into a Dispute With an Online Seller on eBay?
Most online transactions go smoothly. The seller gets paid, the buyer gets a new eBay product —everyone is happy. But sometimes a problem arises. If one does, you have a number of options.
Option One: Try to Work It Out With the Seller
Your first option should not be a lawsuit, no matter how angry and frustrated you are. In fact, in most cases, you won't need to go to court.
If you don't receive an item or if the item you receive is SNAD, start by trying to work it out with the seller. You can communicate with them directly through eBay. Politely identify what the problem is. If you can, be prepared to provide support (e.g., a picture of the item you may have received).
EBay sellers, particularly large sellers, have an interest in keeping their customers happy. Negative feedback is at best unwanted and can be harmful to a seller's reputation. If you can't work it out and do decide to leave negative feedback, follow the process outlined on eBay's website (you can always leave a good seller positive feedback too).
Option Two: Take Advantage of eBay's Money Back Guaranty
If you give the seller a chance and are still unsatisfied, you can leave it up to eBay. According to its website, eBay's “Money Back Guarantee" covers most transactions. That means that in most situations a buyer who purchased something through their eBay account can get a full refund if it doesn't arrive, is faulty or damaged, or if it doesn't match the listing.
However, not every eBay transaction is covered by the policy. Make sure to read eBay's full policy (all eBay's terms and conditions) carefully. There are also time limits, so if you need to take advantage of the policy, don't wait too long. Note that you may be required to return an item if it doesn't match the listing.
Option Three: Use PayPal's Buyer Protection Program
Many eBay transactions take place through PayPal (which used to be owned by eBay). If you have a PayPal account and paid with PayPal, your third option is to go through PayPal's Buyer Protection Program.
Again, you start with trying to work it out with the seller. You have 180 days to dispute the charge in PayPal's Dispute Resolution Center. If you can't work it out with the seller, you have 20 days from the date the dispute is opened to escalate the dispute to a “claim" with PayPal. PayPal will take it from there.
They will investigate your claim and get back to you, typically within 10-14 days but sometimes it takes as long as 30 days. If they decide in your favor, you get your money back.
Option Four: Dispute the Charge With Your Bank or Credit Card Company
Maybe you paid with your credit or debit card. If you don't receive an item or it doesn't match its listing, you can dispute the charge with your credit or debit card company.
The typical process is that you contact your bank. You describe your complaint. They then open a claim and conduct what is essentially a fraud investigation. You may want or need to file a police report. If your bank finds in your favor, once again you get your money back.
Option Five: Bring a Lawsuit
Maybe you have no luck. You are unable to work out your dispute with the seller directly, your transaction for whatever reason is not covered by eBay's money-back guaranty, and PayPal's or your card company's investigation doesn't result in your favor. You still have the option of filing a lawsuit.
If you go this route, you should think about bringing in a lawyer. There are challenges to suing an online seller.
Finding the Seller
The first challenge is finding them. In virtually every state, if you want to sue someone you need to “serve" them with a copy of initial papers (typically a “Summons" and a “Complaint"). That simply means you have to formally give them written notice of your legal claims and spell out the relief you seek.
To serve an online seller, you need their contact information. Many large, reputable sellers provide their contact information online. So serving them may not be hard.
But not all sellers are so obliging. Some seem determined to hide, especially from customers they wrong. You may end up having to conduct a search. A lawyer with the right resources might be able to help you locate an online seller.
Jurisdiction: The Concept
Once you find the seller, the second challenge is locating a court that has power over them. “Jurisdiction" is the term that's used by lawyers to describe the power of a court to decide a dispute.
Subject Matter Jurisdiction
There are two types of jurisdiction. The first is subject matter jurisdiction. That essentially means that a court has the power to decide the type of dispute at issue. Most state and some federal courts would have subject matter jurisdiction over your breach of contract claim against an online seller.
Personal Jurisdiction: The Concept
The second type of jurisdiction poses more of a problem for you. It's called personal jurisdiction. That essentially means that a court has the power to bind someone by its decision.
On its face, the standard for personal jurisdiction is pretty straightforward. A court has personal jurisdiction over a defendant — that's the party being sued (our eBay seller) — if they have sufficient contacts with the state in which the court sits such that it is fundamentally fair to legally bind them to a decision.
In practice, personal jurisdiction can be very complicated. The law isn't particularly clear, it changes from time to time, and the answer to the question ultimately depends on the facts of your particular situation. You would need a lawyer to help you answer personal jurisdiction questions (and recognize that individual lawyers may disagree about whether personal jurisdiction exists in any given case).
Personal Jurisdiction: The Factors
To determine whether a court has personal jurisdiction over an eBay seller, you would look at the contact that the seller has had with your state. Among other factors, you would try to find out where the business is located. Having its business offices in your state is a contact. If it has a warehouse in your state, that too is a contact. The larger the physical presence in a state, the more likely a court will find jurisdiction.
You would also try to find out how many sales took place to people in your state. Sales too can count as contact. The more business an online seller does in a state, the more likely a local court would have personal jurisdiction over them.
Precisely how much business the seller does, however, is up to a judge to determine. As you can see, this gets complicated. If you anticipate a fight over personal jurisdiction, you should consult a litigation attorney.
Class Action Lawsuit
Maybe during your research, you find out that you are not alone. Suppose this online seller has been scamming all of their customers. In some limited situations, you may be able to group your claims with those of other people and bring what's called a class action against the seller. An experienced class action lawyer can help advise you about whether your case is an appropriate class action.
Another Option: File a Complaint With the Better Business Bureau
You do have another option. You may find some satisfaction in filing a complaint with the Better Business Bureau (BBB). As they say on their website, the BBB maintains standards for truthful advertising, investigates claims of fraud, and provides information to consumers before they buy a product.
Leaving a negative review for an online seller won't get you your money back. But it will provide some warning to other consumers and prevent someone else from being scammed (you may want to leave a negative review on the retailer's social media account as well).
If You Decide to Sue, You Should Consult a Lawyer
Buying products through eBay carries risks. Although most sellers conduct their businesses honorably, not all do. And sometimes problems arise that aren't the seller's fault. FedEx, UPS, and the USPS make mistakes from time to time, too.
If you buy on eBay and your product doesn't arrive or match its description, don't panic. The seller has an interest in keeping you happy and likely will be willing to work with you. You may have good luck. If you're unhappy with that outcome, you may be able to get a chargeback (including what you paid in shipping costs) through eBay, PayPal, or your bank.
If you still are unsatisfied, you can and, depending on the size of the claim, should consider a lawsuit. If the seller is based in your state, wonderful. You may be able to sue them in your local small claims court. If not, you will need to track them down and find a court where they can be sued.
Suing an online seller can be complicated, so make sure to consult an experienced litigation lawyer who can provide you with legal advice about whether a lawsuit makes sense, how much it may cost, and where you can file it.
Keep in mind that no matter what you do, there may be time limits. If you don't act promptly, you may be barred from bringing a claim.