Wednesday, October 01, 2008

Is the Bank Fallout Hurting EBay and PayPal Funds?

Let me preface this rant by asking - Have any of you have noticed changes to your Pay Pal account this week? I reached the point where I no longer have much interest in my DVD collection, and the dwindling economy was enough motivation for me to auction a few box sets on eBay,just for some extra cash.

I figured there were enough George Lucas fanatics out there who couldn't turn down a combo deal of $40 (Buy it now price) for both the Indiana Jones and Star Wars Trilogy collections. Within an hour, I had a buyer,and I proceeded to the next steps to complete the sale. To my disappointment, I learned that PayPal is now placing a hold on eBay transactions. Now, I'm by NO means a power seller, however, but I last week, I sold two other DVD sets and I had the money within the same week.

I've been an eBay and PayPal member since 2003, and I've purchased a decent amount of items during the past few months. I realize that most banking transfers usually require a day or two to process, but I'm certain PayPal never took 21 days to process my payment. Now, I'm not so desperate for cash that I NEED the 40 bucks, but I was curious about this new HOLD notification and I decided to contact Ebay's live help center, which eventually deferred me to PayPal. This was the Ebay Live dialogue, which was about as useful as a blister on my butt.

Me-I have a question about a hold on funds from a transaction.

Ebay-Sure go ahead.

Me-Why is there a 21-day hold on the $43 from my sale? I've never had to wait that long before.

Ebay:I will be happy to assist you with this.(one minute later..)Please note that PayPal keeps this hold on some of the transaction.

Me:Ok, so you can't offer any explanation?

Ebay:You will be required to contact PayPal for more information on this hold.

Me:Ok, can you give me the contact info?

Ebay:Sure give me a moment.

He gave me the phone number, and I went through the same runaround we all do, until I finally found an option disguised as a solution to the reason I called for.

PayPal's Automated phone system: (paraphrased) Say Ebay if you have an ebay question

Me: Ebay

Automated response: Sorry, our agents are only trained to answer questions about PayPal.

I fiddled around the system and finally got to a live Paypal agent.

Me: "Why is there a 21-day hold on my last transaction?"

Paypal customer service: "Its not 21 days, it may be released 3 days after proof of delivery is received, or after your buyer leaves positive feedback

Me: I sold DVDS on here before,even last week, and I've never seen a hold notification, so was this recently implemented?

Paypal customer service: Paypal and Ebay is doing this for security reasons including - ebay member of less than 6 months, low feedback score,...

He rattled off a variety of reasons, including electronic items such as video game,cell phones and DVDs The list of reasons reminded meof those drug commercials where you hear "Possibe side effects may include..diarrhea,violent vomiting and hallucinations".

Ultimately, I got the impression that PayPal can use just about any reason to hold your transaction, but maybe it's just me. The mere fact that I'm seeing unprecedented 21 day holds just makes me wonder if they're holding on to any cash they can during the next few weeks.

Posted By Matt O'Hern at 03:00 PM
Permanent Link: Is the Bank Fallout Hurting EBay and PayPal Funds? | Comments (4)

(4) Comments on Is the Bank Fallout Hurting EBay and PayPal Funds?

eBay is like every other company concerned with the company image when it comes to release of their quarterly reports.

eBay/PayPal probably is using the balances from these held transactions so they can inflate their bottom line cash on hand figure and continue to try and fool investors into believing that eBay is on solid ground.

Their stock is crashing. Disgrunteled buyers and sellers are all over financial discussion boards telling all who will listed that eBay is falling apart under Mr Donahoe's leadership.

They will have more detractors when the PayPal only requirement is forced on the marketplace.

Mr Donahoe believes he will increase profits, when in fcat his forcing of PayPal will serve to drive very active buyers to other venues, and alienate sellers who will lose as much as 10% of their volume.

The company, like its marketplace is a train wreck, nothing short of new leadership with goals of restoring eBay to its previous values will save this company from itself now.

Comments by ricroe : Sunday, October 05, 2008 at 11:55 PM

This has nothing to do with this quarter. This policy has been in place since May, which is the reason I don't sell on eBay any more. They are doing it as you were told in certain categories, for sellers who have less than 100 feedback or have been on the site for less than six months. You can also be held if you meet those requirements but haven't sold a certain amount in the previous 30 days, or if your Buyer Satisfaction Rating is too low. Basically, they're trying to do it to everyone they can. Like ricroe said, it's probably to pump up their bottom line. But the end result is to make people give up in disgust and go elsewhere. I did.

Comments by brenda : Monday, October 06, 2008 at 06:46 AM

I just got caught on this and my seller policy changed as follows

If you pay via paypal, the item will not be shipped till positive feedback is sent prior to recieving it. Paypal will not release your funds to me till I recieve positive feedback and I will not ship any item that is not paid for in advance. Please read and be aware if you pay with paypal I require positive feedback before I ship the item.

Comments by puglisiconsulting : Friday, October 24, 2008 at 07:25 PM

I wish I had seen this sooner. I'm having the same issues - 2 pairs of skis sold 3 weeks ago without a problem. Suddenly this week, 2 pairs of skis sold and holds are placed on the release of funds. I'm not a power-seller and never will be (though my feedback is 100% positive) - and it is exactly us who can least afford to wait for payment. I appreciated reading the note from puglisiconsulting and have added that note to the last item I will ever sell through ebay/paypal. From now on it's Craigslist and other payment options. Here is an article you may not have seen:
http://consumerist.com/361642/what-can-you-do-if-paypal-holds-your-funds-for-21-days-gamble-with-it-in-their-money-market-fund

It's tough to keep up with all the schemes to grab our money. A business book I had to read some years ago was entitled ;Winners don't cheat; This is an ethic I've embraced, but as you get closer to the financial services sector, I find few kindred spirits.

Comments by Mike : Wednesday, January 07, 2009 at 01:56 PM

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