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PayPal - Ebay collusion, unethical if not illegal Internet
I recently used eBay for the first time to sell a couple of items. Not knowing the affiliation of the companies, I found it a bit odd that eBay was basically forcing PayPal on me as my method of receiving payment.
PayPal seemed like the best way to receive funds. Further, from statements and implications made on eBay, it seemed as though my products were not likely to sell unless I used PayPal.
So I signed up for my PayPal account and listed my items. The items sold for my asking price. I get a message from PayPal (or eBay, not sure which) stating "payment received, please ship item."
Well, come to find out, PayPal put a 21 day "hold" on my funds. I wasn't (and still am not) all that upset about this, as the hold could be released three days after verification that the item was received by the buyer. And, as this was my first transaction, I only thought it fair that they take steps to ensure I'm not a scam seller.
However, after noticing the connections between eBay and PayPal, brief research showed that PayPal is owned by eBay.
Now, call me crazy, but isn't this a bit like Wal-Mart owning American Express, and then basically requiring that you use an AmEx card when shopping there?
Well, actually, it's worse. AmEx is a financial institution and thus subject to regulations in place to protect consumers. PayPal is not a financial institution, it is a self-described "agent for payment." Aside from standard consumer law, there are no regulatory safeguards to protect the consumer from any action that PayPal may wish to take.
So, aside from the risk of losing consumers, it is always in PayPal's best interest to hold funds as long as possible. Interest is earned on those funds that are in your account but not at your disposal, and that interest is not being passed on to you. And while the interest earned on my $200 for three weeks is surely miniscule, the profits from dubious "holds" must be staggering.
Beyond all of that, eBay has a great deal, if not total control over if and when PayPal will release your funds. Horror stories abound of sellers who ship their product, only to have the buyer complain to eBay that it was never received. eBay tells PayPal to refund the money to the Buyer, who now has the money and the product. The seller is left with little or no recourse. And, of course, it can go the other way.
To reiterate, my personal experience, although a little aggravating, was not all that bad. But it seems that this collusion offfers a BIG chance for these companies to screw over the consumers. I would advise anyone who encounters any major problems to report your claims to the FTC and your state's attorney general.
Best regards, and I'd love to hear other's thoughts on this.
5 Updates & Rebuttals
Ronny g
North hollywood,California,
USA
It's just like any other business..
#6Consumer Comment
Tue, November 24, 2009
..except you do not meet the seller or buyer in person.
I understand your reluctance Tim. As in any sale..you can't please everyone all of the time. Even if you had a store..a customer can pay with a check and cancel it... or pay with a card and dispute it.
Ebay and paypal for the most part do side with the buyer and it can seem unfair. But the way I see it..is if the buyers feel better protected..that are more apt to trust the system..and buy.
And this is why feedback score is critical. I am very weary to do any transactions, buying or selling, with low feed back scores..or low number of transactions.
Unfortunately you had a buyer who was a jerk..it happens. But for the most part I have found most people to be very considerate..once in a while you get a dud..as in any business.
Best of luck.
justiceadvocate
Myrtle Beach,South Carolina,
USA
ruined by paypal & ebay allegedly @ this time
#6Consumer Comment
Tue, November 24, 2009
BEWARE! They ripped me off, took all my money and some very expensive merchandise, as a seller of 5 yrs they shut down my biz 4 no good reason-I never received merchandise back or what I did was broken, they have the power at this time to wipe out your bank acct, credit cards-anything connected to ur acct-they also have ur personal info and contacts..they make their own rules-no laws governing them-they will say you owe them and may turn you over to a collection agency which can ruin your credit.
the collection agency may settle with you for a smaller fihure however if u dont pay what paypal says u owe u r restricted from using ebay and paypal forever!
ALLEGEDLY_for my protection-until they are found GUILTY of charges I'm pursuing against them!
Tim
Grand Haven,Michigan,
U.S.A.
Thanks for the advice!
#6Author of original report
Wed, September 23, 2009
Thank you for the advice, Ronny.
I had the exact same issue you described - selling musical instruments, mistakenly advertised them as "shipping included," and then was in quite a bind when PayPal put a hold on the funds I was planning on using to ship the items.
One of the items was a digital piano, and shipping was going to be about $75, which I did not have without the funds from the sale. I immediately emailed the buyer and explained my predicament and offered to either do whatever I needed to do to undo the transaction, or ship the item ASAP, which would probably be a couple weeks. I also stated that I was open to any other ideas (which, in hindsight, could have included your "expedited feedback" method).
I expected a congenial "I understand" kind of response, but the buyer was a total jerk, and stated "It is not my responsibility to regulate your status with PayPal. The transaction stands. Ship item immediately."
Thankfully, I suppose, I was able to just go through and undo the transaction and refund the money through PayPal.
So I guess I haven't personally experienced anything too horrible or unexpected, but I just have a bad feeling about the inter-connectedness of all this.
Ronny g
North hollywood,California,
U.S.A.
forgot to mention..
#6
Tue, September 15, 2009
As far as protecting yourself from unethical buyers. First off..I usually click the box that says instant payment only..otherwise many will not even pay.
I factor into the price I am selling for delivery confirmation. I put insurance on anything over 75 dollars...I will insure more inexpensive items and buyers request and ask them to pay additional if they insist on it. For really small ticket items I don't worry too much but I always pay the 80 cents for confirmation..this way the buyer can never say I didn't send an item out.
How I conduct business..and keep my rating always at 100% positive..is as soon as an item sells. I contact buyer and thank them and let them know when I will be shipping. I follow up after I ship and forward the confirmation number..and insurance number if applicable and thank them again. For overseas there is other numbers for customs to forward as well.
I have found 99% of the buyers are nice people and almost every transaction has gone smoothly. You do need to be weary of buyers with very low feedback...which is one of the reason I often check instant payment only if I remember to..because I had a few instances where the buyer does not ever pay..or answer emails. So you get stuck with the item..no payment and unsure if to relist the item. I always give a last email and explain if they do not respond in 24 hours I will have to relist. Most of the time that will get the payment received.
Ronny g
North hollywood,California,
U.S.A.
Give it time...
#6
Tue, September 15, 2009
I was livid when I first started selling on ebay. I was on a shoestring budget and selling musical instruments which cost a fortune to ship. So when I realized I was not going to get paid for 21 days..I was in a serious bind since the shipping costs were in with the price..and I had no funds to ship the items.
I eventually realized that this is a way they use to determine that the seller is not a hoax or scam..and it does take several transactions with positive feedback to establish yourself as legit. I also understand how you feel about paypal and ebay being one in the same. However I was recently mailed something by paypal that explained how I can except other credit cards for payment..so if you research...you may find you are not locked into just using paypal for excepting payment.
Once you establish yourself..you will love it. Instant payment is really nice. I can wake up broke..throw something on ebay cheap..and in a few hours I have money in my account and can go right to an ATM with my paypal visa and get some food.
Now as far as your current problem..there is a way around it if no policies have been changed recently. If you can get the buyer to submit a positive feedback before the item is even shipped...they will release payment quickly..maybe not immediately..but 2-3 days max. It is not easy to do when you are a new member and many buyers are weary..but if you are a convincing communicator and come off as sincere enough..it can work. I was able to do this my first 3 transactions..but I also had to explain to the buyers the situation..and that I otherwise would not be able to ship the item if they did not give me the feedback first.
It is something worth trying in a bind..if you can afford to wait for payment..just ship the item..continue to do a good business...keep excellent communications with all buyers..ship fast and describe items accurately..and in no time it will work out and you will have instant access as soon as the buyer pays. I really like the way it works..other then I feel ebay fees are a bit high..but it gives me opportunity to sell worldwide so I can't complain too much.