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As I browse eBay I see $3.00 unexpired food items listed for hundreds of dollars, and sealed Disney VHS tapes listed for thousands… those sorts of things…
I’ve heard rumors that it is for money laundering and moving drugs, but that seems way too obvious.
I’m so curious what is going on with that… Any one know or have ideas?
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I do know that some legit cheap food items that I can easily get in Canada have had runs up to $100. For example, last year McDonald’s Big Mac Sauce was a big thing in the U.S. – it was a limited deal in the U.S. that McDonald’s had and the bottles were going for $100 or so. In Canada, you can buy Big Mac sauce in any grocery store. I myself sold a few $3 bottles for $50+ last summer until dozens of other Canadian sellers caught on.
I’ve sold a few other products that I can easily get at any store in Canada to U.S. addresses in the past – things like Star Wars promotional Pepsi cans, Kraft Peanut Butter, Shreddies Cereal, Lay’s Ketchup or All-Dressed potato chips, Coffee Crisp chocolate bars, and other Canadian products that are not sold in the U.S.
However, I’ve never sold anything for $100 or $1000+ that is a common item here in Canada.
On the flip side, I do buy common American items that are not available in Canada often – silly things like Kool-Aid powder mix aren’t available here. I love my Sharkleberry Fin…
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I suspect:
1. Trade based money laundering (I’m an anti-money laundering consultant. Money laundering happens on almost every platform, every day and for many more reasons less nefarious than drugs.)
2. Sellers with multiple quantity listings may run out of their item but rather than take down the listing, they jack the price up to an amount where no one will buy it. They bring the price back down when they replenish their stock.
3. Errors. I recently heard maybe even on this podcast where a seller missed a decimal place, listed the item for something like $2000 instead of $20. Buyer sent an offer through ebay message for something like $20 which seller accepted. But in the solds, it appears that the item sold for $2000, even though it actually sold for $20.
4. Shill bidding – seller “sells” a few items at a very high price to a friend or even to themself using another account. Those high sales bring up the seller’s sale figures so they are able to qualify for higher paypal loan amounts and possibly a better loan rate. One popular youtube blogger allegedly got caught doing something like this a few years ago.
5. Wishful thinking – Either the seller thinks the the diamond Disney VHS tapes really are worth $1,000s and lists it as such, or they know darn well that its garbage but hopes someone else will be fooled into paying that much for it.-
Julie,
I don’t understand how putting something up for sale on a website to the general public and then having someone buy it is money laundering.-
The definition of money laundering is the process of disguising money gained from illicit means (crimes) and moving it through a series of transactions to make it look like the money was gained from legitimate legal means (i.e. the money is “clean”). The goal is to get the dirty money into the legal financial system without detection. Money laundering can get very complicated and involve many layers that are difficult to peel away. It’s also expensive. The simpler the money laundering scheme, usually the easier it is to detect. Here is a very basic watered down example:
1. Every month I need to send $$ to a cartel in a foreign country (for drugs, human trafficking, hush money, blackmail, etc.). Mailing a check won’t work because any person or business associated with that cartel is going be flagged by every bank that would process such a check and will report the transaction to government via a Suspicious Activity Report. Sending a large amount of money in cash is risky as it could get stolen or if discovered by the postal service (they do have means to do this), I could be arrested for transporting over $10K over the border unless I first reported it to the IRS on a CMIR form (a form which is tracked and monitored by all kinds of law enforcement agencies so as a criminal I really don’t want there to be an official paper record of it). Sending a wire won’t work because all wires go through the U.S. financial system via a bank, Western Union, Ria, Moneygram, etc. all of which have laws that require they have programs in place to identify and report suspicious activity to the government. So instead, the cartel has a number of people working for them that I can send money to via various methods. Some of these people “sell” items online. I buy a crappy book for $1,000. The book is really worth $10 (this is an obvious example – the good money launderers would not be this obvious). The seller may or may not send the book to me, it doesn’t matter. What matters is I just transferred $1,000 to the cartel’s people. To keep the money laundering from being obvious, a technique called “smurfing” is used which means a large number of people (think of all those Smurfs!) will launder small dollar amounts in order to stay under the radar of financial institutions and law enforcement. There could dozens or hundreds of these money laundering smurfs (all with multiple identifies) buying and selling items for more than the item’s value in order to get the money from me to the foreign cartel. Ebay does not have a requirement to monitor and report suspicious activity, but Paypal does. They have to have sophisticated systems in place to monitor transactions in order to try to identify what is suspicious and what isn’t. When you think of the millions of transactions that flow through the world every single day, you can imagine how large a task it is. -
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I agree with Julie answer regarding sold listings.
When a buyer accepts an offer, through Ebay messages, the sold often shows up at the full price, without the cross out. This is something to keep in mind when you are researching sold items. The amount may not be accurate.
To test this, log in through a different account (user ID) and look at your sold listings from your selling account.
I also use this method to see my store, from the buyer’s point of view.
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