posted on March 7, 2001 02:00:05 PM
According to eBay, auctions that involve raffles and lotteries are not permitted and will be ended on their site. (Questionable Listing Practice #42010004.
How does the Billpoint's "chance to win $10,000 giveaway", posted on every listing that accepts Billpoint, circumvent this plain and simple rule?
posted on March 8, 2001 05:43:45 AM
I recently asked eBay to clarify this "raffles and lottery" thing for me. I had noticed a dutch auction for 25,000 baseball cards that stated that every so many cards (25 or 50) would be worth at least $1 in book value. In other words, you could only hope that the X number of cards you bought at 3 cents each had a $1 value card in there somewhere. So, I asked eBay about it.
eBay's response:
Thank you for taking the time to contact us regarding this auction. We have reviewed the information you have sent in, as well as the auction, and determined that the auction falls within our policy guidelines. Due to the nature of trading card and coin sales, these auctions are allowed so long as the lot is not listed in the same manner as lotteries, where members are bidding on a chance to win lots described as being worth
more than others in the same auction.
Huh? If you buy 25 cards in the dutch auction at 3 cents each, you will receive at least one card worth $1. One in 25 wins! Sounds like lottery odds to me.
Anyway, I will be unloading my huge lot of trading card commons (with the chance to have a few $1 cards thrown in) sometime soon. Apparently there are just some categories that you can get away with more than others.
In order to clarify the policy, we have updated the "Bonuses, giveaways, raffles, and prizes" section of our Listing Policy. The new policy is as follows:
Bonuses, giveaways, raffles and prizes
Listings that promote bonus items, giveaways, or random drawings or prizes as an enticement for bidders are not permitted on eBay as these promotions are highly regulated and may be unlawful in many states. eBay itself may run such promotions on the site, and may grant authorization to its partners or third party companies to run promotions, that comply with applicable laws.
We have run a number of these types of promotions over the past year (Trip to the Olympics, Holiday Grinch Give Away) and wanted to clarify our stance about promotions done by eBay and third parties that have been authorized by eBay.
posted on March 10, 2001 04:29:00 AM
The reason why they can have contests and sellers can not is that most sellers have no clue as to the laws and regulations that must be followed in order to run a contest.
The odds of winning must be calculated and posted. Disclaimers must be included to void the contest in states that prohibit it. The company running the contest must have a Federal Taxpayer ID and be able to generate a 1099 form to report the income of the winner. Depending on the prize amount, they may also have to have a withholding account and forward the income tax witheld from the prize to the IRS. There are regulations on how fine the fine print can be in relation to the rest of the information. There needs to be a way for a person to enter without making a purhase. (such as send a 3 x 5 card with name address and age to xxx) There has to be a procedure in place for any interested party to obtain a list of winners.
Most sellers on Ebay do not take the time and invest the money to seek professional guidance for their "business", so they unknowingly violate state and federal laws every day.
Online auction sellers are reported as the number one source of fraud reports by the FTC. They are most likely number one in number of copyright violations, income tax evasion and customs service violations both here and abroad. If you think about it, it is an absolute nightmare for the government. You have over a million people selling god-knows-what without a business license, most of whom have never read a single book or publication about the laws and regulations that govern a business. That is why Large Companies can run contests on Ebay, but John Doe selling baseball cards out of his basement (in a neighborhood where the zoning laws prohibit running a mail order business out of your house without a zoning variance and permit) can not.
