eBay Says “No” To Checks
Posted in Patch Collecting by John E. Pannell on August 23rd, 2008 at 9:49 am eBay recently announced a new requirement for sellers on their site, ending the option for their sellers to accept checks or money orders. The policy states:
Paper payments end this October
Beginning late October 2008, all items listed on eBay.com must be paid for using one of the following approved payment options:
- Direct credit or debit card payment via a merchant credit card account
- PayPal
- ProPay
- Payment on pick-up
Paper payment methods such as checks and money orders will no longer be accepted on eBay.com…
There are some exceptions for a few categories.
However, for most folks who buy and sell Scouting memorabilia this will mean that the seller will be required to accept PayPal. Of course, they will also be required to pay eBay the fees levied by PayPal in addition to the fees for selling on eBay. For low priced lots this is a significant increase in the cost of doing business on eBay. I fully expect to see small eBay sellers increase their “shipping and handling” fees to cover this increased cost of doing business.
This is being marketed as a way to improve the experience of both both sellers and buyers. It is being touted as a safer and more efficient way of selling on their site. In my opinion it is nothing more than simply a way for a company to increase their revenues without explicitly raising their prices.
in the FAQ for this policy change eBay states the seller must not accept prohibited payment methods (eg. checks or money orders) even if the customer wishes to make payment that way. Online payment is a requirement even if the customer does not feel safe doing so. Online payments are required even if the customer does not have a bank account. In this last case, eBay suggests the buyer obtain a prepaid credit card.
This is being done for the benefit of eBay users, so we are told, even if they do not want this “benefit”. This is the power an monopolist can wield.
Will there be a rush to sell Scouting items on eBay during September and early October? Could this lead to more folks selling their merchandise via their own websites or set price lists? Could the dealers remaining in the hobby use this as an opportunity to increase their consignments, namely from disgruntled collectors who don’t want to deal with being required to accept PayPal?
Several years ago, someone tried to run a site dedicated to selling Scouting material, via online auctions. Unfortunately that never attracted the critical mass necessary to succeed. Maybe now might be the time to give this another chance?
John:
This had been rumored for quite some time, as this was the policy for eBay Australia for a few months, until the Australian government put the kibosh on it, and it was eventually adjusted, to force sellers to offer Paypal as an option for puchases.
(http://www.australianit.news.com.au/story/0,24897,23515926-15306,00.html, http://www.theregister.co.uk/2008/07/02/ebay_australia_paypal_battle/, http://en.wikinews.org/wiki/EBay_Australia’s_PayPal_only_policy_blocked, http://www.theregister.co.uk/2008/07/04/ebay_australia_paypal/)
eBay UK has instituted a similar policy, requiring sellers to offer Paypal. (http://www.tamebay.com/2008/05/ebay-uk-sellers-must-offer-paypal-from-3rd-june.html)
I would expect a similar “clarification” to the new policy, prior to the implementation in October.
This may help give rise to sites like Wigix.com, which looks like it was set up along the same structure as eBay, with a few differences (BSA listings on eBay: 10,128. BSA listings on Wigix: 0).
Robert Mathis
Well I can see their point in a way cause in this day and age less and less people have physical checks anymore. There are banks that when you open a checking account that actually ask you if you plan on getting real checks or not. Most people open checking accounts now and only use the debit card that comes with the account. Besides why use a check which can take up to 2 weeks to clear when you can use Paypal or something and have the money the same day?.
The problem with forcing the use of PayPal is that it opens the seller to fraud. There is a loophole large enough to fly the Hindenburg through with room for the Graf Spee, Akron, and Macon to be side by side.
It works this way:
Buyer purchases a patch and pays with PayPal.
Seller puts patch in envelope and drops it in the mail.
Buyer receives patch, BUT claims patch was not received, and states as much to PayPal.
PayPal contacts Seller, stating Buyer did not receive patch, and does Seller have *proof* (insurance receipt, delivery confirmation) that the patch was shipped. Because Seller does not have the required proof, PayPal deducts money from Seller’s account and refund’s Buyer’s money.
Buyer has just gotten his patch for free, and Seller is out both money and patch.
I believe it was that noted CA patch collector, Russell Cates, who said it best, when he once told the Dark Lord Norrington - “In the immortal words of my generation, ‘UP YOURSSSSSSSSSSSSSSSSSSSSSSSSSS!!!’”
I think that PRETTY much sums up MOST collector’s attitudes towards FLEA-Bay these days…
Bob McCanless >:-(
Pittsburgh
Companies like eBay pay real close attention to growth and new business/users. Either enough buyers/sellers protest or go elsewhere, or make a big stink with the media, as corps don’t like bad press either.
Barring that, niche auctions sites may have to sprout up and take over. Hey John, how hard would it be to get some capital investment, software and equipment, and set one up just for scouting and OA collectibles? (remove tongue from cheek)
-Rob
What’s going on: the collectibles market is large, but finite, and was quick to adopt eBay. So the growth potential for that market on eBay is low because of saturation–maybe not near-zero, but too low to keep Wall Street happy if collectibles are driving eBay’s profits.
eBay’s target is Amazon: you know how Amazon offers results “from other sellers”, or under the “more buying choices” heading? That service–offering a “storefront” so retailers can sell stuff in a place where people are already searching–is pretty profitable, and is where eBay sees its future. But to stand a chance in that market, eBay feels they need to have greater control over the sellers–they need to brand the experience as an “eBay” transaction and are getting away from the founding notion that “eBay just sets up a completely private transaction between two individuals”). They’d also rather have fewer sellers with more items each (and more expensive items) than have lots of sellers with a handful of items.
This does leave an opportunity, but not–realistically–for a niche target like “Scouting collectables”. Attic cleaners, estate sellers, and general purpose antique dealers are not apt to search out targeted sites for each category of collectable item they come across.
The real opportunity is for someone with an established presence (for the sake of discussion call them the “Amazin’ Web Store”) to decide to actively go after eBay in this market: create the “Amazin’ Collectibles” website within their existing store, make it easy for small and individual sellers to be Amazin’ sellers of collectibles, and add an auction mechanism. (If they really want to grab sellers, use a feature like Oak Tree used to have where the auction doesn’t end immediately if people are still actively bidding–I’m sure that would provide enough potential extra profit to draw sellers to Amazin’ and away from eBay.)
But it’s got to be a big enough player for the network effect to kick in at once (as niche auction sites have found, both buyer and seller prefer the site where “everyone else is” for obvious reasons). And while structured categories are important, and buyers don’t go too far afield from their particular collectible interest, an eBay competitor needs to have a broad enough spread of collectibles to be a one-stop option for general-interest antique and junk dealers.
With all of the concerns going around since the announcements of changes at eBay, we are trying to get some valid information out there about our company ProPay. ProPay will be a new payment option in October. Right now we only offer a merchant account but at the end of September we will be announcing a new special account for our eBay customers. ProPay will charge a small yearly fee, but will provide several services and we will help our customers fight against fraud. We are excited for these changes and encourage you to keep watch for upcoming news.