PayPal Protection might actually start protecting eBay buyers?
Filed under: Ripoffs and Scams, Shopping, Fraud
Word on the street is that eBay is trying to be nicer to its customers in order to win some of them back. Ticked off buyers and sellers around the world have made it no secret that things at eBay haven't been good for a while.One example: eBay has gone "PayPal only" in Australia, and people think that's a sign of things to come in the United States. By allowing only PayPal to pay for auctions, eBay has suggested things will be safer. Customers know better. All that will happen is eBay will make more money.
The latest eBay idea is to offer "more" buyer protection. (I put more in quotes, because that sentence suggests that buyers are currently protected, and there are plenty of unhappy eBayers who might say differently.)
Currently the PayPal buyer protection offers up to $2,000 to eBay buyers who don't get their item from the seller. Now eBay says they'll lift the limit on the protection. And sellers who accept PayPal will also get unlimited protection against the reversal of charges, rather than the current annual limit of $5,000.
That sounds nice, but I'm skeptical. Everything I've heard suggests that the good guy often finishes last with PayPal's "guarantees" and I'm not incline to believe that this is any real improvement. I'd love to be convinced otherwise. If you believe eBay and it matters to you... the new policy will be rolled out in fall.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
Recent Posts
- Ask the Dolans: Should I re-address my estate planning documents when I move? (8/29/2008)
- Urgent safety matter: popular bassinet kills two infants (8/29/2008)
- Smithsonian's Museum Day - hundreds of local museums to offer free admission Sept 27th (8/29/2008)
- Are you ready for pay as you go car insurance? (8/29/2008)
- Fantastic Freebies: Love your mom and get a free movie rental (8/29/2008)
Reader Comments (Page 1 of 1)
6-27-2008 @ 5:09PM
David said...
eBay has not gone PayPal only in Australia, please see the news on my website www.basicstobusiness.com
Reply
6-27-2008 @ 5:21PM
Nancy said...
No, ebay has not gone paypal only in Australia, the ACCC regulatory agency is still dealing with ebay, ebay is in round two of the process, has a date for a public rebuttal round of July 11. Then of course, there is another step ebay could take in trying to convince the government they should be allowed, and that is the Competitive Tribunal, which has one federally appointed judge. If the Tribunal agrees with the ACCC's finale determination (already disagrees with ebay in the first phase), then it is over. Paypal will not be allowed to be the only payment form acceptable on ebay.com.au.
If ebay were to then try to force paypal only on it's site there, it would be escalated to a federal court filing against ebay.
And although what ebay might say rarely turns out to be the unvarnished truth, Usher Leiberman of ebay has stated that ebay has no plans of paypal only in the US. That, I believe, would be due to our anti-trust laws and the hurdles ebay would have to overcome to attempt to do it here.
But ebay is pushing paypal on the US site in many insidious ways. Having taken over the feedback system and the detailed seller ratings (DSR), they are using those to 'grade' sellers and if your 'buyer satisfaction' rating hits some level ebay deems unsatisfactory, they have decided that holding your paypal payment from buyers for up to 21 days can be implemented to protect the buyer.
Of course, paypal makes a lot of money on float that way. Paypal is also required in high fraud categories on the US site now and those categories are often subject to these paypal holds, while sellers are expected to ship prior to getting their funds released or be in violation of paypals Seller Protection Policy rules. A perfect catch 22.
Paypal is also required for all sellers with under 100 feedback.
The reason paypal can push this hard and not run afoul of the anti trust laws now is that ebay allows sellers to offer their own credit card processing through merchant accounts. Those are not feasible for the hobby or smaller sellers who don't sell thousands a month due to their fees and criteria. So paypal wins by default with many, many sellers.
The topic is complex and spiders into many areas, it's not simple and it's not equitable.
Reply