Browsing the news this morning, I noticed that an article of interest on PayPal was deleted from the original source at SeekingAlpha. Before it dissappears from CACHEd pages, I thought it was worth preserving. Although this is a free country, where freedom of speach is paramount pillar, some speech has more freedom than other, especially if you speak against a corporation with billions of dollars worth of influence over something as fragile as freedom of speech.
Here is an belated Christmas present for those who value this freedom.
Paypal Ruins Christmas for eBay Customers
by: Dinah Balk December 25, 2008 | about stocks: EBAY
Dinah Balk
This could happen to you. I recently read a very sad story posted on eBay’s (EBAY) Paypal discussion board. It’s about a fantastic mom (eBay id: seasonalstuff) who sold holiday decorations to earn Xmas money for her family. Unfortunately all her hard work was for nothing because the Paypal Grinch froze her account two weeks before Santa’s arrival.
What did this seller do wrong? She sold too many Xmas decorations. Then she was selected for an “account review” by the Paypal Grinch because her sales triggered Paypal’s built in false positives. She also refused to give Paypal her SSN and driver’s license number out of fear of identify theft on the advice of her attorney. I don’t blame her. I wouldn’t give Paypal my SSN or license number either because all members’ personal information is shared with eBay’s entire corporate structure, subcontractors, and God knows who else, which is really scary when you think about it .
Now multiply this situation by thousands of sellers whose funds have been held or charged back for ridiculous reasons such as: 1) false positives; 2) less than 100 feedback; 3) sold too many items; 4) etc. etc. etc. and a pattern begins to emerge.
I doubt if Donahoe ever asked himself the following questions before he added the mandatory use of Paypal to eBay’s user agreement.
What buyer will tolerate shipping delays due to a seller’s funds being held?
What seller wants their funds to be held for up to 180 days for no good reason?
What seller wants charge backs if they have a no refund policy or when a buyer experiences remorse or neglects to read an item description?
John’s mandatory Paypal policy is why Xmas Mom’s children may not have Xmas this year. Other sellers are reporting the same thing. I’m sure family members are helping out but it’s sad to think eBay’s new CEO could not have foreseen this occurring. Perhaps he didn’t care.
Here’s Xmas Mom’s story, in her own words:
Due to circumstances beyond my control I am going to have to cancel some orders and give full refunds and end all listings tonight. Paypal has decided that after over 300 completed transactions and NO problems, they need to freeze my account for a minimum of 21 days. Over the last few months I’ve sold here on eBay to save money for Christmas, times are tough as many of you know and this is a great way to earn some extra money.
It was explained to me that my account was picked to be reviewed for the simple reason that I have sold a lot of items in the past 30 days. (It is Christmas time and I do sell holiday decorations!) Anyway, this is the only reason, not because of disputes or complaints or anything else. I was told that although my account is verified by my bank account and credit card they want more personal info, my supplier’s name and address and tracking numbers for items that were shipped through Paypal!
I was also told that since they are “reviewing” my account it will remain frozen for 21 days, if I do not agree to their terms then my account will be closed and they’ll release my balance in 180 days. Here is my problem, I’m already verified. They want a copy of my SS# and drivers license too? That’s just asking for identity theft! Supplier info? I already gave it to them 3 times over the phone (all of my supplier purchases were through Paypal). Tracking numbers? I ship through Paypal! They have them! Even if I give them my personal info they are still holding my funds for 21 days!
90 percent of my current balance is for transactions that have already been delivered, days, weeks and months ago! I feel horrible having to cancel these transactions and refund some of you.
The problem is they have frozen my shipping funds and all of my Christmas money. I don’t have much cash. I can’t pay for the remaining shipping out of pocket without completely ruining Christmas for my kids. I hope you can find it in your hearts to understand. I will be leaving eBay. After I get through this mess I’m moving my inventory over to Amazon (AMZN). Those of you who are sellers too…you may want to consider it too some day. I pray that it doesn’t take something like this. I wish everyone the best and I hope your Holidays are wonderful. My apologies again.
This article has 26 comments:
» eBay +++ 31 Comments Dec 25 04:56 AM This is a real beauty — “I don’t blame her. I wouldn’t give Paypal my SSN or license number either because all members’ personal information is shared with eBay’s entire corporate structure, subcontractors, and God knows who else, which is really scary when you think about it .”
Dinah Balk you have got to be kidding? To say something like this without knowing a anything about how eBay handles it’s information is deformation of character with no basis. Watch out you Donahoe may freeze everything you have. LOL
There is no better way to pay on the internet than Paypal. I had an Account since they were bought by eBay use it frequently and have never once had an issue. I use it off eBay whenever it’s offered. Can’t how many times I’ve found something that I wanted to purchase and saw that they didn’t offer Paypal and didn’t feel like getting up to search for my Credit Card and just thought I’d come back to it latter and never purchased it. With Paypal I just log in and I’m done, no long CC # to punch in, just too easy. If I were a Seller that conversion acceleration alone is worth the fee.
That 21 days is nothing, it’s keeping everybody safe including her. If her business can’t weather that than it’s time to find a new business…
Watching the Wheels 65 Comments Dec 25 05:45 AM Ebay+++, Don’t you think that it might be a bit wiser to withhold commentary UNTIL You sell on Ebay ?
You stated that you have a Paypal account, so it would be a fairly easy thing to click a few buttons and list an item or 2 on Ebay. It would be interesting to study how willing you would really be to ship an item to an unknown person without having the money in your hand.
You might want to read through the actual Paypal contractual segments before you attempt this so you can fully appreciate these wondrous protections.
I had planned to sell on Ebay because venues offer an incredibly low cost opportunity to start a business.After watching the sweeping policy shifts that began in January of 2008, I decided that there were NO PROTECTIONS in place for the seller.
I sell on a different venue and I do utilize Paypal because of the brand recognition and increase in sales that I will receive due to their service. Fortunately I have only encountered one minor problem. I did not appreciate attempting to resolve this problem via an outsourced call center because the phone rep didn’t understand a single thing that I was attempting to convey. I did not appreciate the amoount of time it took to track down the TOLL NUMBER to be able ot speak with a rep whose primary language was the same as mine. I don’t appreciate the cost of this phone call, but on the plus side, by being willing to incur said cost, I have also provide myself with better documentation.
During the time frame that I was dealing with a glitch I attempting all the online possible solutions and got nowhere. The supposed online help’s transcripts are comical.If you repost and leave your address, I’ll send you copies.
Have you reached your spending limit yet? Are you really comfortable giving Paypal access to a bank account?
I fail to see the sence of the 21 day hold. In order to sell, there has to be some sort of bank account attached to the Paypal in order to actually get your money. If there is the necessity of refunding money, Paypal can freeze said account making the 21 day hold completely unnecessary. I f Paypal or Ebay choose to extend credit to an individual, that’s fine. I choose not to.
Hirorir 1 Comment Dec 25 06:20 AM Sorry to hear about this, Paypal can be a real annoyance sometimes; it’s also real cruddy that you had to be hit down on Christmas season too.
I’d advise you to go hardcore on this and file complaints on them for holding your funds for these 21 days (with intention to use on Holiday Season) with improper reasoning (if possible lead to sue). Your SSN should NOT be asked by Paypal, regardless of the reviewer. I believe Paypal should have a “don’t ask, don’t tell” policy? After all, they have all the information they’ll ever need right in their storage.
lucky lenny 33 Comments Dec 25 06:29 AM To combat fraud, to hold funds for a a month or so to make sure the seller isn’t a fraud, makes sense to me. I’m in agreement with Paypal on this one.
fairytrixy 5 Comments Dec 25 06:43 AM HoHoHo ebay+++
Next time you post it might be wise to do so prior to having a cocktail:)
Cheers!
eBuyer Feedback 3 Comments Dec 25 06:48 AM I had basically the same thing happen to me last year. I had a lot of listings going on (featured plus) with immediate PayPal payment required. eBay wouldn’t close the listings and refund my fees even though it was their fault my listings couldn’t sell. They told me it was my problem and I needed to contact PayPal. They even had the nerve to hang up on me in the middle of the conversation.
I had a customer from Russia that had paid the day before. I normally use Stamps.com and Endicia to do my postage but those wouldn’t work for their address. USPS Click-n-ship wouldn’t work either. That only left PayPal shipping. But since my account was limited I was expressly forbidden from printing postage through them.
PayPal took several days to clear up the block but by then my listings were all ruined and I lost several customers. I guess I trusted them with my personal information (that’s the only thing I trust eBay/PayPal with) and that is what led to the different outcome for me.
I was very lucky that I avoided a wave of negative feedback and chargebacks in the middle of that ordeal. I know how eBay users are and if they strongly suspect a scam they’ll rush their trading partner right out of business and then eBay uses those negs and chargebacks to justify kicking you off and holding your money indefinitely (which also leads to even more chargebacks).
Funny thing is one week they were congratulating me on becoming a gold powerseller. The next week they told me I was selling too much and almost trashed my 5 year old business.
Paul Price 176 Comments Dec 25 06:52 AM The vendor states she “had to give refunds” as her payments were being held up.
Why her account had been credited when the buyers paid. She could ship normally and her funds (if they were actually held up by PayPal) would have been released after 21 days.
We have no evidence that her story is even accurate. Anybody can say anything. Perhaps this whole episode was planted by someone short EBAY stock?
Regardless of that, I don’t see how cancelling transactions was necessary or what it accomplished. The buyers get the merchandise- the seller got paid.
If she didn’t like PayPal she could arrange for other forms of payment that she thinks are more acceptable to her.
Paul Price 176 Comments Dec 25 06:58 AM Every single article from this author’s name is a critical piece on EBAY.
She does not appear to have any intent here on Seeking Alpha other than to create ill-will towards EBAY and/or to hurt the stock.
Dinah Balk is not a stock analyst- she is working for the shorts on EBAY.
redbaron 169 Comments Dec 25 07:20 AM Paul, you need to try to sell on eBay first, before commenting on this situation. If you really have an interest here, why not go ahead and give it a try? You likely have some merchandise laying around, and the software is easy to use. Selling would for sure give you a different perspective on the situation, and would certainly add some credibility to your comments.
Without some personal experience, your thoughts have no substance or credibility. Ebay and PayPal are changing the rules to their advantage, during the holiday seasonal selling climax, and putting their customers (sellers are the only ones paying fees here) at risk of financial ruin. You are making assumptions here on a situation about which you know nothing.
You are correct about one thing, however, Dinah Balk is not a stock analyst, and that to me makes her very much more credible.
Dinah Balk 157 Comments Dec 25 08:37 AM Good morning everyone -
Got lots of Xmas stuff to do. Will be stopping by later when I have more time.
Merry Xmas!
arlin 18 Comments Dec 25 09:42 AM Dear Dinah
Manty thanks for your informative reports throughout the year.
Merry Christmas.
Paul Price 176 Comments Dec 25 11:03 AM redbaron,
I do sell through Ebay and use PayPal regularly with zero problems.
fatseal 5 Comments Dec 25 11:33 AM Do you not know that there is no other form of payment on ebay? It’s paypal or a merchant account.
Dinah Balk 157 Comments Dec 25 11:34 AM Here is Paypal’s Privacy Policy just in case anyone is interested.
You must log into your Paypal account. Go to the bottom of the home page and click on Legal Agreements. On the next page, underneath Agreements For All Users, click on Privacy Policy.
Please note that eBay’s corporate family is substantially larger than what was stated. My website has a complete listing of the entire corporate family.
How we share personal information with other parties
We may share your personal information with:
Members of the eBay Inc. corporate family — like eBay, Shopping.com or Skype — to provide joint content and services (like registration, transactions and customer support), to help detect and prevent potentially illegal acts and violations of our policies, and to guide decisions about their products, services and communications. Members of our corporate family will use this information to send you marketing communications only if you have requested their services.
Service providers under contract who help with parts of our business operations; (fraud prevention, bill collection, marketing, technology services). Our contracts dictate that these service providers only use your information in connection with the services they perform for us and not for their own benefit.
Financial institutions that we partner with to jointly create and offer a product such as the PayPal Plus credit card where we share information with GE Money Bank to determine whether you should receive pre-approved offers for the PayPal Plus credit card. These financial institutions may only use this information to market PayPal-related products, unless you have given consent for other uses.
Credit bureaus to report outstanding negative balance accounts, as allowed by law.
Companies that we plan to merge with or be acquired by. (Should such a combination occur, we will require that the new combined entity follow this privacy policy with respect to your personal information. If your personal information could be used contrary to this policy, you will receive prior notice.)
Law enforcement, government officials, or other third parties when
we are compelled to do so by a subpoena, court order or similar legal procedure
we need to do so to comply with law
we believe in good faith that the disclosure of personal information is necessary to prevent physical harm or financial loss, to report suspected illegal activity, or to investigate violations of our User Agreement.
Other third parties with your consent or direction to do so.
fatseal 5 Comments Dec 25 11:36 AM The seller got paid, but she left all her money in paypal( there is a very long thread on the boards about it) and all her paypal money ($1600) was frozen. She has no money to even pay for shipping. Glad you can take having $1600.00 frozen in your account. Most people can’t.
ezduzit 30 Comments Dec 25 12:05 PM any person who comments about a “short” attacking e-bay, on this site, is off the deep end in his (her) thinking. the stock price has its own mind.
as far as the other posted comments, when you can’t get in touch with customer service, without jumping through hoops, that’s a serious problem. it shows a lack of respect and consideration towards people who work for a living.
bigger companies than e-bay have bitten the bullet because of flawed company management and poor customer relations. Reply | Link to Comment +10 RicRoe 4 Comments Dec 25 12:22 PM eBay’s problems are self inflicted. The more eBay has done in the name of bringing business back to their site, the more they have alienated current users that were once infatuated with the market place as both buyers and sellers.
eBay started to seriously slide when John Donahoe as CEO came out in front of changes which gutted the core of the marketplace and referred to any member that spoke out against the changes as ‘noise’. His arrogant ‘noise’ label insulted the very customers he was trying to keep.
Led by an executive team that has barely used the marketplace, eBay is now headed for obscurity because they do not ‘get’ it anymore.
eBay, unlike Amazon, does not own inventory, and relies on sellers to provide merchandise to the site. This said, it is hard to understand why eBay executives have instituted so many anti seller policies over the past year.
Further proof of how out of sync eBay leadership is, they fail to understand that sellers are buyers as well. Alienating sellers diminishes their interest in purchasing from the site or doing business in any way with a company that is viewed as seller unfriendly.
eBay’s increased fees across the board and forcing sellers to accept PayPal to entitle them to an even larger slice of sellers profits, has not improved the company’s fortunes, but has motivated sellers to take their business elsewhere.
eBay has become a ship without a rudder, adrift in a marketplace they have lost control of.
eBay execs fail to understand that word of mouth is essential to the success of their marketplace. With sellers having nothing positive to say, buyers are going elsewhere.
Until eBay is led by a team of executives with vision and experience in what makes eBay tick, eBay is destined to become the next Internet bubble to burst.
Buyers and sellers alike have lost trust and confidence in current leadership over the series of poorly implemented policies, feedback changes, imposition of the failed DSR system, constant technical glitches, search that is horrible, forced PayPal etc…
eBay is now beyond reversing failed policy and system changes. eBay now has to replace the entire core of enthusiastic members which they have managed to chase in addition to changing the failed policies and defective systems.
The simplest solution would be for eBay to simply get out of being in the marketplace business since it is obvious they have no clue as to what it takes to make and keep a marketplace relevant and successful.
John Donahoe, Lorrie Norrington and company will go down in history as the executives that managed to screw up a free lunch.
They are not the team that will lead eBay out of the disaster they created, they are the team that turned a marketplace with millions of happy members into a poor imitation of its competition with customers who have nothing good to say about the new experience.
This is unlikely to change until the book smart MBA’s are removed, and replaced by a team of executives that know and understand what the eBay marketplace is.
The fix would be for Mr Omidyer to get back to work, and restore the core principles upon which eBay was founded. He had the right ideas and the company became a worldwide multi billion dollar success under those principles.
eBay’s only chance to restore itself to that level of success will be when the existing leadership is tossed and replaced with a team that ‘gets’ eBay.
steve577 9 Comments Dec 25 12:51 PM This article is SO typical of sellers with bad attitudes that enjoy criticizing
ebay for the wonderful changes that made it a better, safer place for
buyers. As to the specifics of this article, anybody that doesn’t trust
paypal doesn’t deserve PayPal’s trust.
o.c.d.collectibles 34 Comments Dec 25 01:12 PM I was banned from posting on the discussion boards after 10 years here, never has this EVER happened to me. I have the best documentation, because legally, I understand (from being a Nurse!!), which policies and procedures are, that place me at risk. To have me suppressed when I state my opinion in non-confrontative ways, is a form of suppressing freedom of speech on a public forum. I’ve been given a “7 day sanction” so that I can “spend more time” reading and digesting ebay’s board posting policies.
After 10 good 100% 4.9 rated years, I just disconnected my reports subscription and deactivated the credit card associated with my account.
Not only will I not allow ebay to treat me this way as a customer, but I will make it my business to let every stock and financial site that I can register on, know what is going on amongst ebay’s most loyal and longest law abiding citizens and their unscrupulous tactics in censorship.
Censoring the ability to mention the names of other sites to sell on is not advertising. If it WAS advertising, I would be making an income doing that. At this point in time, I have NOTHING posted to sell on any site AT ALL. I sell “live” in antique booths. I do not need online sales to make my life complete. I used to enjoy them, and the socialzation I had from ebay selling. Now that THAT is gone, I have nothing to lose letting the world know of ebay’s censorship rules amongst their discussion boards.
I will not let up until I see the desired effect, you guys can all count on it!
So far, I have already described the ridiculous changes and the re-design of the site, with all of it’s glitches, malfunctions, and breakages. Now I will be focusing on something else….abuse of it’s oldest and most loyal, “high grade” sellers, who simply voice their opinions.
riversniper 2 Comments Dec 25 01:23 PM Never get verified, If you do then open a separate bank account that is not connected to your personal banking or checking account. Trust me on this riversniper
o.c.d.collectibles 34 Comments Dec 25 01:43 PM I have no need to sell on a site that treats me with so much indignity. After all the income provided for them,over the many years I was there, and so many happy customers, they will not get another dime from me now.
My rating is excellent. I left the site SIMPLY because of the WAY they treat their honest sellers.
They are selectively “deaf, dumb and blind” to their registered racketeers who really ARE swindling the new buyers on their site with poor service. They manipulate the bad ratings of these large retailers who get a free ride, listing on their site, just to make the seller still look good. There have been detections of this practice going on, and it is highly fraught with favoritism not based on ebay’s own policies. Ebay is scamming every OTHER fee paying member/seller due to this issue, and it won’t be long before someone exposes this publicly.
Paypal only practices the exploitive practices on ebay. They would not be doing that on anyone else’s site
There is something really wrong on this site, they deserve a SEC investigation.
Dinah, thank you for posting invaluable information to the public. They deserve to read the truth about this company before they decide to invest.
I wouldn’t invest unless I knew the CEO team was being fired.
eBay +++ 31 Comments Dec 25 02:06 PM I have sold on eBay whenever it’s time to clean out the garage and I have only offered Paypal. They are linked to my Acccount, no problems, not once. Would not think of Selling any other way.
o.c.d.collectibles 34 Comments Dec 25 02:20 PM The cheerleaders are no more than investors in ebay stock who have lost their shirts after investing when the stock was in the 20’s and 30’s. Sorry guys, you made a big mistake buying stock in this company so late in the game, OR maybe too early! If the imbeciles who run this company, finally leave, THEN you should buy some more stock! Wait till it hits $5 a share. It will. Maybe by then, the Board of Directors will wake up and hire some qualified leaders.
Patricia013 62 Comments Dec 25 02:21 PM How very strange…..I’ve had a Paypal shopping cart on my own website for years now. Never had a chargeback, never had funds held and don’t forget there is no feedback or DSR’s to consider. I would like to know why Paypal turns into a different animal when an Ebay transaction is concerned? Then they hold funds and act like thiefs in plain english. I think we all know Ebay is making money off the float of all those held funds. They have found yet one more way to skin a seller! Ebay, you go far beyong “its only business” and into a realm of sleaziness the depths of which I have never seen before!!! If, as a seller, they held my funds then they would have one angry buyer on their hands. Nothing ever leaves here that isn’t paid for with the funds in my account where they belong! If that means gathering a neg…so be it. If that means having my account closed…so be it! That would be the final straw for me.
Philip Cohen 11 Comments Dec 25 02:45 PM eBay is knowingly facilitating fraud on buyers
Can anyone explain to me why users in Australia, the UK, Ireland and the Philippines, have the absolutely anonymous alias (”Bidder N”) while New Zealand (and the rest of the world) has the effectively bidder-specific alias (”a***b (N)”)?
The material difference between these two forms of anonymous alias is, in the case of the “a***b (N)” alias, at a given point in time when viewed in conjunction with the accompanying feedback count, it is effectively bidder-specific: experienced buyers can still check a seller’s other auctions to watch out for at least any instances of blatant shill bidding; and with the absolutely anonymous alias (”Bidder N”), buyers have got absolutely no chance of detecting even the most blatant of shill bidding by an unscrupulous seller.
And, please, don’t try to tell me that the new “Bidder History†page enables buyers to spot a shill bidder: that is simply one more blatantly nonsensical and disingenuous eBay claim. Nor does eBay have any “sophisticated software†for the detection of shill bidding: they still rely primarily on user reports: trouble is, users can no longer report, because users can no longer detect! And, eBay’s excuse for introducing such anonymous aliases, to stop fraudulent second chance offers, is pathetic and undoubtedly disingenuous.
Further, in the US, eBay initially introduced the absolutely anonymous alias (”Bidder N”) and then retreated therefrom to the effectively bidder-specific alias (”a***b (N)”). Strangely, the opposite has been the case in the UK where eBay went from “a***b (N)” to “Bidder N”! (Does anyone in this organisation actually know what is going on?)
The application of the absolutely anonymous alias, “Bidder N”, would appear to serve only one purpose and that is to obscure any blatant shill bidding, that would otherwise be obvious, so that buyers can’t detect it, can’t then report it, and eBay does not have to waste any of their valuable resources pretending to do anything about it.
Whether intentional or not, eBay’s application of the absolutely anonymous alias (”Bidder N”) is effectively an “aiding and abetting†of fraud on buyers. What is our governmental consumer affairs regulators doing about this reprehensible behaviour by eBay?
Lengthy, detailed comments on this matter commence at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6499794#6499794
User 325862 1 Comment Dec 25 03:09 PM I have been using eBay and PayPal. Once someone tried to cheat me on ebay and paypal helped me their buyer protection. this is true and it happened earlier this year. i am an occassional seller on eBay too.
there is so much anti-ebay and paypal being posted. maybe your stories are true, only god knows. I dont want to just antogonize someone, atleast on christmas day (for god’s sake). I see the same set of people posting junk about companies time and again in various forums.
I dont have any issues on ebay or paypal. if someone’s account is locked, either they have been alerted on fraud for anti-money laundering or some other genuine reason.
why would anyone just freeze anyone’s account, especially your customers? use commonsense.
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