This item was up for sale one ebay a few months ago

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewI...em=140225658563

Listed as UNC, although by-the-by, I'd call it AU.

It says

We guarantee all goods are real things, you buy what you see.

The item is an obvious and well-known fake: the wavy lines watermark on the reverse is clearly overprinted, and it has the 'ZG' prefix common to these fakes. These contemporary fakes caused this note to be withdrawn from circulation in 1960.

Anyway, I noticed this and messaged the seller.

The seller replied back "Ok"

Much to my surprise, I later noticed the item sold for over $100, so I messaged the buyer to let him know it was fake.

Looks like he returned it
http://feedback.ebay.com/ws/eBayISAPI.dll?...ckLeftForOthers
and the item is now up for sale again:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewI...em=140242168719

How would you treat this seller, who does have some other nice and genuine items that I might like to buy.

Poor winner, happy seller.
I myself collect, sell and buy old Russian coins, especially silver and golden ones. And believe me, sometimes even coin sharks make mistakes and buy fakes and only later realize what they did. They pay big money for these coins, so they try to sell it as real coins to some beginner coin collectors. They call this "business".. Do you think this is right? Nope, it is not, but this cannot be changed as this is no more coin collecting, friendship and fairness, this is now "business".. CAPITALISM!

not sure why this was moved to the fake coin forum...

It was moved because it is a discussion about a fake, albeit a banknote, perhaps the titling of the Fake Coin Forum would be better as Fake Coins and Banknotes Forum.

If it's regarding about counterfeit, I welcome the discussion. However if this is to go about bashing the seller, the thread will be closed right away. There is no numismatic merit discussions from bashing sellers.

This is NOT an ebay police enforcement forum. Concerns about it should be reported straight to ebay, not here.

I don't want to bash anyone, I just want to know what people would do.

FYI, unmoderated forums and their members have been sued in the United States by sellers on eBay. It is the explanation for why these discussions are placed where they are, and moderation in the form of modifying the message if necessary can take place. Indeed it is not a form of censorship so much as it is a unfortunately necessary means of prevention of undo legal expenses.

I can certainly see that, which is partly why I put it in the community forum, which is not google-indexed, whereas this one is, and is therefore much more likely to be found by a seller.