The Cold Hard Reality of PayPal Payments and eBay

November 16, 2008 by Revenuer

A recent post: “The Keys To Surviving The PayPal 21-Day Hold Policy” on the Brews News, details all of the ways a seller will be subject to the 21 day payment hold policy when accepting payments via PayPal on eBay.

One of the most important segments of the Brews News article should be read and understood by every eBay seller…

In all cases, your buyer satisfaction rating must be greater than 95%. A dissatisfied buyer is one who (a) leaves negative or neutral feedback or (b) files a PayPal dispute / seller non-performance dispute or (c) leaves a 1 or 2 star rating in any of the detailed seller ratings categories. More than 5% buyer dissatisfaction automatically subjects you to the PayPal 21-day hold.

Other than having a buyer satisfaction rating greater than 95% you also either have to

(a) have been an eBay member for more than 6 months and you have 100 feedback or more, or

(b) you will need to have received 20 or more detailed seller ratings in the last 12 months.

eBay sellers who are relatively new (less than 100 feedback or member less than 6 months) or who have had little activity in the last year (fewer than 20 DSRs in the last 12 months) are, therefore, automatically subjected to the PayPal 21-Day hold even if their buyer satisfaction rating is greater than 95%

Reality Check -

These unreasonable and restrictive policies are one of the many reasons why sellers and consultants are having a difficult time recommending the eBay marketing plan to anyone. In the eCommerce world a 95% approval rating in feedback is almost unheard of. Beyond this small technicality is the hard reality also mentioned in the Brews News article. The 21 day Paypal hold eliminates almost all safe options to ship internationally (all but international express mail).

Merchants have considered their options and are realizing the options presented by eBay and Paypal are not the only path to eCommerce and payment processing available. With services like Google checkout or any secure credit card processing option the balance of security is more even than with Paypal and eBay. Stand alone ecommerce websites and other venue options which allow multiple forms of payment are becoming more prevelent and accepted than ever.

With eBay, it is obvious the field of play has been skewed towards PayPal as the main payment processing option. Paper payment options are now eliminated officially on the eBay platform, this additional policy has added to the reasons why it has become less advantageous for new or even established merchants to join the eBay family of merchants.

What do you think of these policies? Is Paypal justified in tying a 21 day hold on payments to a single negative feedback or PayPal dispute filing?

Let us know - Wednesday 1:14

Article by: Scott Pooler

Views Expressed may or may not be shared by John “ColderICE” Lawson - Tune in Wednesday on Talkshoe to find out…

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Filed under: Agents of Revenue, Featured
Tagged: 21 Day Payment Hold, Brews News, eBay, Internetional Shipment Options with Paypal, Payment Processing, PayPal

Comments

2 Responses to “The Cold Hard Reality of PayPal Payments and eBay”

Agent 008 Henrietta on November 16th, 2008 2:44 pm

I think an unforseen consequence for both eBay and PayPal is that owners of stand alone websites, like me, are seriously considering removing PayPal as a payment option.

It is a fact that PayPal’s API ‘does not play well with others’, I have been unable to get Google Checkout installed and running correctly on my site and the zen cart consultant I bespoke told me that PayPal has code conflicts which appear to deliberately cause conflict. Apparently GC has changed code more than once and within days the conflict is back. An amazing co-incidence. I would have to remove PayPal, install GC and then reinstall PayPal, a lot of work and no guarantees.

I have offered PayPal because my customers like it, and I am mindful of the necessity of offering my customers choice, HOWEVER, (a big however,) this is MY site. I am the person who decides what payment options I will offer, not PayPal and I am not happy with this sneaky back door anti competitive garbage.

Google Checkout is easier for buyers, many fewer clicks and 33% savings over PP for me as a seller. eBay and PayPal are free to behave as they wish on their site, on my site they need to shape up or I am going to ship them out.
roo on November 16th, 2008 3:19 pm

Scott,

I tend to agree with your position. Arbitrary 95% numbers (what is wrong with 94% or 96%?) draw a bright line that has no meaning for buyers - the intended beneficiaries of a policy. It only results in dolphins in the tuna net.

That being said, I don’t have feedback on my website that can be used to defeat my own business. I offer reviews, but Paypal doesn’t use them to undermine my own business.

So, can you differentiate in the policy that Paypal would apply to private website owners vs. those who also do business on eBay?

I am curious about whether shutting down your eBay business is a reasonable measure to defend against this policy affecting payments to your website.

_roo