PCI compliance is another animal entirely and I can assure you that PayPal is indeed compliant.

That type of thing was happening all the time. An account like yours would get phished, the scammer would post expensive items on the account without ever planning on shipping a thing. Buyer’s would send payment in some fashion (usually money orders or phished paypal accounts) and they would never receive a thing. Then when the buyer files disputes eBay and PayPal come after you, at which point you say I haven’t even bee signed into that account for 2 years, and now you’re upset, the buyer(s) are upset, eBay and PayPal are upset…everybody loses.

With this simple “escrow-like” (I do find it funny they can’t call it escrow) policy that problem (and this is just one example) is completely solved. If the buyer never receives anything there’s no way for the “seller” to get away with the money.

Besides the scammers, some sellers were simply dishonest. Selling items with false conditions or trying to claim false shipping insurance claims. Things like that annoy buyers. When buyers are upset they stop buying. eBay has LOADS of data that they were analyzing that represented this very well. Quite simply, they were losing buyers. If you lose buyers (low demand) the prices of all your items are going to drop and your market is going to dry up. So, not only do the new policies help buyers and sellers alike, it makes perfect business sense on the part of eBay/PayPal.

As for the comment about PayPal enjoying their interest on your money, that’s simply not true. The money is in YOUR account and if you’re setup as a money market YOU earn that interest. Now, maybe with their overall balance they are getting some interest too, but it’s not like they’re screwing you out of your interest. While that money is pending you earn interest on it. Once it’s cleared you can withdraw it to your actual bank account. However, if you’re transferring out of PayPal as soon as possible then the interest really isn’t all that big of a deal to you is it.

I’m quite sure PayPal is enjoying the extra interest they earn while “protecting” the buyer.

I agree that the little people are what helped make eBay grow so huge and it is a shame things have turned more towards power sellers than the “little guy”. It’s kind of inevitable, though. Those high end sellers may be few, but they represent a large majority of the traffic that gets pushed through eBay. If buyer’s can’t even trust your high-end seller accounts there’s no way they’ll trust low feedback sellers. eBay was losing buyers, simple as that. As such, in my opinion (and obviously in the opinion of eBay/PayPal) it WAS broken and that’s why they fixed it.

As for the new policy, they actually did give plenty of fair warning about the policies. If you keep up with eBay’s community updates at all or sign up for their email updates you should have seen it. If I remember correctly we knew at least 6 mos in advance that this policy was going to occur. They don’t normally give exact dates, but they’ll tell you things based on quarter’s of the year. If I remember correctly it was early in the year that they announced the 4th quarter would bring this change. It could have been the other way around, though, I don’t remember for sure.

As for the phishing emails, I think you underestimate the magnitude of that problem. I’ve mentioned in the article as well in many comments about examples of how 1 bad transaction can cause 10, 15, 20, or more eBay and PayPal accounts to get suspended while they try and track down the actual fraudster and the original funds. This pisses off a whole lot of people, of course. I have clients that fell into this trap in both directions. Sometimes, somebody in the office was the sucker who accidentally filled out the phishing email. Sometimes, they simply sold or bought something from somebody else who was the sucker. Other times it was because they sold to somebody who sold to somebody else, who sold to somebody else that made the mistake. The further down the line the more people get screwed.

That whole problem happened because the seller had access to the money before the merchandise was delivered, and as such, they could easily post and sell things without any intention of ever delivering it. The holding policy eliminates this problem and I can confirm that based on the dramatic decrease of fraudulent and disputed transactions that my power-seller clients have noticed ever since this policy was put into place.

I hope I didn’t sound too argumentative. I appreciate your feedback and conversation!

You stated: “In fact, if you have a problem with this policy they’d rather not have you around anyway.”

That is not necessarily true. Where do you think all that money in the market is coming from? I hope you don’t think that all eBays profits are coming from a few power sellers. Companies like eBay always want my money. eBay grew before there were power sellers.

You stated: “That’s part of the point. If it’s really that big a problem for you not to spend money before the buyer has his item then you probably shouldn’t be selling on eBay to begin with.”

Not a problem to me, I just think it’s a unnecessary policy. Plus it’s very unprofessional to put out a new policy without alarming the community on the new policy change. I would rather eBay give us the reason they are doing this because up to this point it’s all he said she said info. This can all be fixed it eBay or paypal make tracking numbers when shipping items a requirement.

You stated: “It was implemented because of people unknowingly giving away their passwords to fraudsters who would then run a muck with a completely open system to do it on. There are SO many people out there and SO many phishing emails getting sent that 1 slip-up by somebody out of thousands of emails can cause huge problems for a long daisy-chain of buyers and sellers”

Sir this new policy does not shovel this problem. eBay needs to be more professional and give a reason for these actions.

That’s great that you’re doing well with Amazon. By all means, keep at it. I learned a long time ago not to worry about things I can’t control. eBay and PayPal are the way they are, but the fact is, they’re extremely valuable tools. You might consider that my opinion, but I think it’s more than that. If you actually sit down as a business man with a product to sell and look at the numbers all signs point to using eBay as one of many tools (one of the better tools) for getting noticed on the web. In order to use them you have to follow their rules. Simple as that. I just find it mind-boggling that people are willing to throw away profit just because they don’t like this one policy.

Literally, people are throwing away items or giving them away instead of selling them now simply to prove a point. eBay doesn’t care if you don’t sell your stuff anywhere. In fact, if you have a problem with this policy they’d rather not have you around anyway. That’s part of the point. If it’s really that big a problem for you not to spend money before the buyer has his item then you probably shouldn’t be selling on eBay to begin with. It’s bad for buyers.

Anyway, that’s all this article was ever meant to be. You probably wouldn’t believe it based on most of the comments here, but I have received many thank you’s for shedding light on some of the simple things you can do to get your money as fast as possible. Any business with a consistent cycle of sales won’t even notice this policy because it’ll just become part of the cash-flow system on a monthly basis. If you’re not a big business and you only have 60 feedback over 3+ years then you shouldn’t be trusted the same as a seller with 100k feedback over 1 year.

On that note, I don’t mean trusted to send the item. I mean trusted that you haven’t been phished and it’s not really you “selling” me that item, but somebody else posing as you who has no intention what-so-ever of shipping it. I think that’s the biggest misconception about all of this. Many of the comments I see are about how they think eBay is calling sellers guilty of some crime or blaming them for intentionally doing harm. I don’t feel that’s why this policy was implemented. It was implemented because of people unknowingly giving away their passwords to fraudsters who would then run a muck with a completely open system to do it on. There are SO many people out there and SO many phishing emails getting sent that 1 slip-up by somebody out of thousands of emails can cause huge problems for a long daisy-chain of buyers and sellers.

This response turned into a lot more than I intended, so I apologize. You’re right, though, it’s all just more of my own opinion.

The point you’re trying to make here actually helps make my own point. Your buyer has not even so much as received the item yet, much less do you know whether or not they’re happy with it. If you go spend that money on groceries or rent or whatever, and then something goes wrong with the order that would require a refund…what are you gonna do? Tell the buyer, sorry, I spent that money already…?? Ask him to wait until you have funds from other sources that you can refund him with? That’s not fair to the buyer at all. This is exactly the type of situation that causes so many problems and why the holding policy was introduced. If sellers were responsible enough to NOT SPEND THE MONEY UNTIL THE BUYER IS HAPPY, or in the very least has the item in hand, the holding policy might not have been as necessary (although actual fraudsters would still be trying to take advantage of it).

Your Wal-Mart example makes no sense here. You’re comparing a retail store where you walk in, purchase the goods, and take it home right away. You, the buyer, have your item in hand and you’re obviously happy with its out-right condition or you wouldn’t have purchased it to begin with. As a buyer on eBay you don’t have that luxury of seeing, touching, examining the exact item. You have to wait to get it in the mail before.

Let me ask you this…how much do you BUY on eBay? Have you ever been in the situation where the item you purchased was shipped incorrectly or was damaged in a way that shipping insurance wouldn’t cover or anything like that at all? How would you feel if even after submitting a dispute through PayPal, they side with you, even the seller agrees he should refund you, but he says “sorry, I paid rent with that money, it’s gone.” Oh man you’d be pissed. You’d be posting about eBay sucks, PayPal sucks, that seller sucks, etc. Everybody sucks just because the seller wasn’t responsible.

As I mentioned to a previous poster, you’re actually a perfect target for fraudsters with the fact that you’re a long-standing account with low number of feedback at 100%. If somebody were to phish your account (maybe that would never happen to YOU but it happens to LOTS of people with similar account status) they could have a blast selling goods they never intend to ship and with immediate access to the money all of those buyers would be screwed.

No worries at all, though, I’m not being fooled by anybody. I’ve got 10+ years experience selling on eBay with sellers that do roughly $500k/mo in sales. I know what works and what doesn’t. Believe me when I tell you that these sellers have seen fraud and problems with eBay sales drop dramatically with the introduction of this new payment holding policy. I’m actually surprised to hear that PayPal told you if you got to 100 feedback the problem would stop. That’s simply incorrect. It may not happen as much, especially if you’re actively selling items (61 over 3.5 years isn’t very active).

If you decide not to sell on eBay anymore that’s your decision to make. People will product to sell understand that eBay is in invaluable source of marketing. To drop it because of an escrow policy just doesn’t make good business sense. Those same people doing roughly $500k/mo in sales on eBay would go out of business if they didn’t sell on eBay. The competition for search-engine-optimization is simply too steep for many people to compete with and get their sites noticed outside of eBay, especially for new sellers. It can take months, even with PERFECT search engine optimization, to see your site at the top of search engines. Put that same product in an eBay store, though, and you’re at the top in a day or two.

So again, if you don’t want to sell on eBay because of this small, completely manageable change in payment policy, then that’s perfectly fine. But for those of us who want to continue selling our products and turning a profit, following the guidelines in this article will go a long way in relieving some of the headaches this policy may create.