How to Handle Venmo Scams When Selling

Venmo is a widely adopted payment platform, offering a convenient way to send and receive money for personal transactions. Its ease of use has also extended to casual selling. However, this convenience also presents opportunities for fraudulent activities, making it important for sellers to understand and navigate the potential risks associated with using the platform for commercial exchanges.

Common Venmo Selling Scams and How to Spot Them

Fake payment screenshots involve a scammer sending an altered image claiming a successful Venmo transfer. A key warning sign is the payment not appearing in your Venmo balance, despite the scammer’s insistence. Always verify funds by logging into your Venmo app or website to check your actual balance and transaction history, rather than relying on external notifications or images.

The overpayment scam involves a buyer intentionally sending more than the agreed price, then requesting a refund for the excess. They often insist on a different payment method like a wire transfer or gift card. This is a red flag because the original larger payment may be reversed by their bank after you refund the ‘overpayment,’ leaving you without the item or funds. Any request for an overpayment refund, especially via an alternative method, should raise suspicion.

In a “buyer protection” scam, scammers claim Venmo requires an additional payment from the seller to activate a “buyer protection” feature or upgrade an account. They may send fraudulent emails or links directing you to make an external payment or provide sensitive information. Venmo does not require sellers to pay extra fees for payments or buyer protection. Requests for payments outside the standard flow or demands for personal information via suspicious links indicate this scam.

Chargeback scams occur when a scammer receives goods, then claims to their bank or credit card company that the Venmo transaction was unauthorized. This reverses the payment, leaving the seller without the item or funds. Warning signs include buyers pressuring for quick delivery without thorough verification, or those overly eager to complete transactions with minimal communication. Proving legitimacy can be challenging, especially without using Venmo’s “goods and services” payment option.

Safeguarding Your Transactions

Verify Payments Directly

To protect against scams, always verify incoming payments directly within your official Venmo application or on the Venmo website. Never rely solely on screenshots, email notifications, or text messages, as these can be fabricated. Confirming the transaction in your account ensures funds have genuinely arrived and are available.

Use “Goods and Services” Option

Venmo offers a “goods and services” payment option for eligible business profiles, providing a layer of protection for both buyers and sellers. When a payment is marked as “goods and services,” Venmo may offer purchase protection to the buyer and seller protection for qualifying transactions. Using this feature incurs a small fee, typically 1.9% plus $0.10 per transaction, deducted from the received amount. While it offers some safeguards, it does not guarantee protection against all types of fraud, and its availability depends on the seller’s account type and the nature of the transaction.

Maintain On-Platform Communication

Maintain all communication and transaction details within the Venmo platform or verifiable channels. Avoid moving conversations off Venmo to personal email, text messages, or other apps, as this hinders tracking interactions and gathering evidence for disputes. Scammers often try to move off-platform to avoid Venmo’s monitoring. Also, be wary of buyers insisting on immediate or unusual payment methods like gift cards or wire transfers.

In-Person Sales and Payment Irreversibility

For in-person Venmo sales, prioritize personal safety by meeting in a public, well-lit location, ideally with a friend or family member. Understand that Venmo payments are generally irreversible once released from your account. If you send money to a scammer or a fraudulent payment is reversed, recovering funds can be exceptionally difficult, as Venmo processes payments quickly and they are intended to be final.

What to Do If You Encounter a Scam

Report to Venmo

If you suspect a Venmo scam, immediate action is crucial to mitigate losses. First, report the fraudulent activity directly to Venmo’s support team via the ‘Get Help’ or ‘Contact Us’ section in the app or on their website. Provide all relevant details like the scammer’s username, transaction IDs, dates, and communications. Timely reporting allows Venmo to investigate and take action.

Contact Financial Institutions

If the scam involved linked bank accounts or credit cards, promptly contact your financial institution or credit card company. Inform them about the fraudulent transaction and ask about their dispute process. Many credit card companies offer chargeback rights, often within a specific timeframe, such as 60 days from the statement date. Providing details and evidence can aid their investigation.

Report to Federal Agencies

Also, report the incident to relevant federal agencies handling financial fraud and cybercrime. The Federal Trade Commission (FTC) accepts reports of fraud and scams via their website, helping them track patterns and take action. For internet crimes, the Internet Crime Complaint Center (IC3) is another reporting avenue. When reporting, gather all available evidence, including screenshots and transaction details, to provide a comprehensive account.