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Overpayment Scams: How to Spot Them and Stay Safe

Selling items online is a great way to declutter or earn extra cash. Whether you use a marketplace app, social media group, or auction site, making a sale usually feels rewarding. But sometimes, a deal that seems too good to be true is actually a trap.

Scammers are always finding new ways to trick people and overpayment scams are a common tactic. They target honest sellers who are just trying to do business.

In this guide, we’ll explain how these scams work, the warning signs to watch for, and how to protect yourself so you can sell with confidence.

What Are Overpayment Scams?

An overpayment scam happens when a "buyer" sends you more money than the agreed price. It sounds odd because why would anyone pay extra?

The trick to this scam is that they don’t send real money. Instead, they use a fake check, a stolen credit card, or another fraudulent method. They claim the extra amount was a mistake or meant to cover something like shipping fees. They’ll end up asking you to refund the difference. If you send the money, you’ll be using your own real cash and will lose the money sent before you and your financial institution might have the chance to discover the fake payment.

How the Scam Usually Happens

Imagine you’re selling a piece of furniture online for $100. Here’s how the scam might unfold:

The Offer: A buyer contacts you quickly, seems eager, and doesn’t negotiate. They might even offer more than your asking price.
The "Mistake": They send a check or payment notification for $500 instead of $100.
The Story: They apologize, claiming the extra $400 is for "movers" or was an accident.
The Request: They ask you to deposit the payment and wire the $400 back to them or the "mover."
The Aftermath: You send the $400 and later, your bank flags the $500 check as fake and removes it from your account. You’re now out of $400, plus any bank fees.

Signs to Look Out For

To avoid online fraud, you need to know what a scam looks like. While scammers change their stories, the warning signs usually stay the same.

1. The "Overpayment" Excuse

This is the biggest red flag. If someone sends you more money than you asked for, be suspicious immediately. Honest buyers rarely make mistakes like writing a check for hundreds of dollars over the price.

2. Urgent Requests

Scammers want you to act fast before you have time to think. They might say they need the item right away for a birthday or that the movers are on a tight schedule. They’ll push you to send the refund instantly.

3. Strange Payment Methods

Be careful if a buyer insists on paying via a cashier’s check, a personal check, or a money order, especially if they’re buying something small. Online transactions that are safe typically happen through secure apps or with cash when in person.

4. Asking for Wire Transfer

If a buyer asks you to wire money back to them through a payment app like Venmo or asks you to buy gift cards to pay them back, stop talking to them. These methods are like cash; once you send it, you cannot get it back.

5. Odd Communication

Does the buyer’s message use strange phrasing or vague terms like "the item" instead of saying "the couch?” Scammers often copy and paste generic messages to hundreds of sellers at once to make it easier for themselves than having to change the message to each individual person they’re targeting.

How You Can Protect Yourself

Selling online can still be safe, but we’ve created a short list of best practices to keep in mind:

Stick to Familiar Payment Methods
Use the platform’s built-in payment system when possible. For in-person sales like Facebook Marketplace exchanges, cash is the most secure form of payment.

Wait for Payments to Clear
Just because funds appear in your account doesn’t mean the check is valid. Financial institutions make funds available quickly, but it can take weeks to uncover a fake check. Never refund money until you’re sure the payment has cleared.

Keep Conversations on the Platform
Scammers often try to move chats to text or email to avoid platform security filters. Stay on the app where you listed the item.

What to Do if You Spot a Scam

If you think you are dealing with a scammer, stop communicating with them. Don’t deposit their check or accept their transfer.

If you’ve already sent money, contact your financial institution immediately. While it’s difficult to recover funds sent via wire or gift card, acting fast is your best chance.

You should also report the fraud to help protect others:

The Platform: Report the user to the website or app where you met them.

The Federal Trade Commission (FTC): Report the fraud at ReportFraud.ftc.gov.

Postal Inspection Service: If you received a fake check in the mail, report it to the U.S. Postal Inspection Service.