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buyersmarket2aaa2.JPG (7729 bytes)
Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu June 14 2012 23:19:18

Should PayPal Encourage Delayed Payments on eBay Purchases?

 By: Ina Steiner
Sponsored Link
There's an interesting discussion going on in the eBay boards about PayPal's Pay on Delivery service that lets eBay shoppers buy an item, but not have to pay until 14 days later. The original poster explains, "I just purchased some organic seeds on eBay and was offered a new payment option in Paypal - Pay After Delivery!" Despite PayPal testing its Pay on Delivery service for some time, many online sellers are unfamiliar with the program.

As PayPal explains to shoppers on this page, "Pay After Delivery gives you 14 days for your item to be delivered before you pay for your purchase. There's no cost to you - because the money is deducted from your bank account, there's no credit check and no credit card fees."

Sellers are very concerned about the program because they feel the buyers may not be committed to the purchase and it will increase the likelihood of them returning the item to the seller.

There also seems to be some skepticism that eBay would use its payment-holds policy in conjunction with Pay on Delivery - meaning the seller wouldn't get paid until 2 weeks after the transaction - despite eBay's explanation that it pays the seller itself at the time of purchase.



Someone included a screenshot of the "funding source" screen they encountered. It also includes something called PayPal Smart Connect, with which I'm unfamiliar - it says "Shop Now and Pay Later."

What do you think of eBay offering buyers deferred payment options? Will it increase sales, or would the potential for an increase in returns outweigh the advantages?
Comments (45) | Leave Comment | Permalink
Readers Comments

Perminate Link for Should PayPal Encourage Delayed Payments on eBay Purchases?   Should PayPal Encourage Delayed Payments on eBay Purchases?
This user has validated their user name. by: Ming the Merciless
       
Thu Jun 14 23:38:47 2012
To say that this idea is monumentally stupid would be the understatement of the year.

More fraud. More chargebacks. More "rental" returns.

To compel sellers to accept such terms is ILLEGAL!!!!!

do stores allow customers to walk out with merchandise without paying on the spot?

Of course not!!!

Whoever thought up this patently illegal scheme should be drawn and quartered.
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by: Tiffee Jasso This user has validated their user name.
       
Fri Jun 15 00:44:03 2012
Ina can you find out if Paypal and Ebay will allow a seller to opt out of that stupidity?  
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by: Tess This user has validated their user name.
       
Fri Jun 15 01:11:58 2012
All I can say is OMG.  Are they crazy??  Do we pay these crazy fees for 10 crazy people in a room making Hundreds of thousands of dollars to come up with these completely Insane Ideas??
They need to write a book "10 Easy Ways to Destroy Ebay"
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by: Dazzle This user has validated their user name.
       
Fri Jun 15 01:41:17 2012
have you ever seen a company so hell bent on destruction?

love you ming
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This user has validated their user name. by: Marie
       
Fri Jun 15 02:28:15 2012
Now that is just one disaster after another waiting to happen.  Even if Ebay pays the seller right away.  If it comes to them not being able to collect the money from the buyer, do you really think Ebay will allow the seller to keep the money.  Doubtful.  Really who thinks up this stuff?!?!?!
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by: Digmen1 This user has validated their user name.
       Web Site
Fri Jun 15 03:04:00 2012
Just another reason to move to your own website or one of the top alts eg ebid.net or bonanza or ecrater.

None of them have such insane rules.

Eg ebid has not made any major rule changes in the last 3 years.

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by: bitbybit This user has validated their user name.
       
Fri Jun 15 04:19:00 2012
Just today I purchased a low priced item on eBay before I even saw this posted on EB and was offered the same payment options. First I thought how many people would pay right now when they might as well pay 14 days later? I was just going to pay immediately but decided to try it more as a test. Now after I agreed to this payment I am wondering if the seller's money is being placed on hold even though it states the seller is paid upfront. This seller had a low number of feedbacks and the item was only a few bucks.  

Wanted to mention that part of the screen shot is cut off.  ''After June 27 you can still report a problem. With Paypal purchase protection, you have up to 45 days from the date of the original purchase to file a dispute...''

I think a lot of buyers are going to use this and it is going to backfire big time.

Let me make clear, the item I purchased will be paid for and I won't be returning it.

My concern is whether this is going to be presented to ALL buyers and through ALL sellers. Will this create more seller holds? Is this being done so eBay, like Amazon, will pay its sellers directly instead of through Paypal (like in Germany)?    
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This user has validated their user name. by: Anonymous Annie
       
Fri Jun 15 05:45:13 2012
This is a mistake. When buyers see this message, they will immediately interpret the meaning to be: ''NO NEED TO READ THIS ITEM'S DESCRIPTION. WE'LL SEND IT TO YOU 'ON-APPROVAL' FOR YOU TO INSPECT.''

It is a way to remove and eliminate ANY sense of prudence or responsibility on the part of the buyer. eBay is catering to the bottom feeders.

I'm so glad that my transition away from eBay is nearly complete.

By the end of this year, I won't have to put up with this crap anymore... and YOU won't have put up with my run-on rants about eBay. ;-)

(Well... maybe. We'll see.)

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by: RCL This user has validated their user name.
       
Fri Jun 15 05:51:32 2012
I have stopped buying at eBay but as a seller, every week something eBay unilaterally implements messes up my small business. This payment option clarifies that every sale on eBay is conditional. No finality, even after 14 days given the ''Buyer Takes All'' protection plan. I can see ''ideators'' at eBay struggling to come up with a way to require immediate payment AND give the seller a 14 day cooling off/back out period in which to pay.
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by: RCL This user has validated their user name.
       
Fri Jun 15 05:58:36 2012
PS I may be wrong, as things change so fast at eBay, but Smart Connect used to be just an eBay-Paypal credit card basically with about a 24% interest rate.  
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by: go-figure This user has validated their user name.
       
Fri Jun 15 06:09:31 2012
I can see it now, scam artists all over the planet are licking their chops! A brand new way to steal thousands of dollars of goods that I won't ever have to pay for.

All that I need to do is to stock a bank account. Build up a little buying history and then go for the KILL!!!!!

I can readily buy about $50,000 worth of goods on PP's new credit plan, empty out my bank account and be gone with the goods!
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This user has validated their user name. by: basset
       
Fri Jun 15 07:55:09 2012

Buy & Try BEFORE you pay? Really!!!!!  What is eBay's motivation?

The 14 day period is interesting - if this is designed to push sellers to accept returns, eBay could easily make 14 day returns mandatory, so I don't see that as a motivation. Especially given their ''buyer protection'' policies which allow money back long after 14 days pass.

If the buyer does not pay & wants to return it (sounds like they might get to keep it?), it looks like it will encourage claims (see third bullet of the screen shot) & possibly low FB / DSR's against the seller? This would likely knock any sellers that still get the discount out of the ring. Even sellers like myself that have deliberately walked away from the discount but retain TRS might lose that designation - but really, how much weight does TRS by itself have these days. And again, eBay could just discontinue that discount or even the TRS designation at any point on its own. So knocking people off the discount is probably not a motivation.

Unless I'm missing something,  it looks like a very desperate attempt to give a short term boost to sales. No other retailer in their right mind offers this. At least none I can think of. It seems like a blind, mindless, desperate action. Why is this not considered theft? Offering goods to a buying party who delays paying the middleman (eBay/PayPal)  who has the power to rescind payment from the selling party if the buyer makes an unhappy noise BEFORE they pay. I don't even see a return scenario in the plan - so seller may not even get their item back?

Say I go to any B&M store, walk out with the goods & in passing say - you'll get your money in 14 days, IF I like the merchandise - well I think I'd find myself in the back seat of a Police cruiser in short order. No?  

Holy Crap - If only I didn't have that pesky conscience making me want to be an honest person - this would be a potential gold mine!

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This user has validated their user name. by: Ric
       
Fri Jun 15 09:09:13 2012
Basset asks " Buy & Try BEFORE you pay? Really!!!!!  What is eBay's motivation?"

The motivation is simple. eBay wants to once again artificially boost GMV by allowing buyers to order items, count the items as sold, and then return them before payment is due.

This new try to possibly buy but more likely return program is designed to boost eBay's reported GMV figures with misleading revenue statistics.

This scheme is designed to artificially boost reported GMV figures just like eBay's push for sellers to offer free shipping. Since free shipping is nothing more than a seller including the shipping costs in the selling price of an item, eBay gets to count the shipping portion of the transaction as Gross Merchandise Volume.  eBay knows this is slight of hand accounting, but since Wall Street Analysts are too ignorant to see through the charade, eBay benefits.

Returned merchandise does not reduce reported GMV. eBay will get to utilize these non sale transactions to make their numbers appear better than they are to Wall Street and persuading analysts to report that sales are "growing' at eBay ponce again.

Additional benefits for eBay will come when the items are returned, eBay will realize commission revenue on return shipping labels printed through eBay or PayPal, eBay realizes additional revenue when sellers issue refunds for the returned goods, and later, eBay realizes additional fees generated when sellers re list the returned items.

Bottom line, eBay wants to see the same items sell over and over and over again with their latest try and maybe buy scheme. eBay wants buy and try to be used by buyers to complete purchases of items they otherwise would not purchase knowing that they will not even have to pay for the item for 14 days unless they decide to keep it.



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This user has validated their user name. by: Ed Gadfly
       
Fri Jun 15 09:27:36 2012
Doesn't give a person much time.

Maybe with the quick shipping you can get the item in 4 days.

Then list it on Craigslist, Amazon or even eBay for a week and if you can't sell it for more, just send the item back.

Reselling from eBa'al is easier than ever!

Thanks John!
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by: Moonwishes This user has validated their user name.
       Web Site
Fri Jun 15 10:09:49 2012
One thing I didn't see anyone mention, is why ebay would NEED to do this in the first place other than the discussion about the GMV? At PP you can either use your cash, checking account, or credit card. Now I'm pretty sure most people are using credit cards for all their purchases everywhere so why would PP be different? A credit card can give you, depending on your billing cycle, up to 6 weeks to pay so why does ebay need the 14 day nonsense? Obviously it isn't for the buyer or sellers convenience as that is already taken care of by using credit cards. Ebay and the idiot team have figured out a new way to feather their nests with this not needed add on.
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by: 10 year seller This user has validated their user name.
       
Fri Jun 15 10:10:27 2012
JD said he wants more ''wallet'' from the sellers. That is the business plan.
Not true growth in the form of commissions from sales.
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by: Ed This user has validated their user name.
       
Fri Jun 15 10:24:11 2012
We we can see ebay cares little about the sellers if they want us to be in agreement with this new policy. This could be good if ebay buys the items from us and they want to be responsible for the inventory after the return.

1. This gives a buyer time to shop for a better deal while he is still able to use the product and pay nothing. If he finds another item he buys the item and returns it to the seller with the higher price with no risk. Who pays for the return shipping? PayPal or do they open a case Item as described to pass this cost off to the seller.

2. This will increase returns because many people do not know how to manage money and then will not be able to pay.

3. Does the sellers have to agree with this policy.

4. What is ebay plan to prevent fraud.

I think ebay is going to try to use this plan in the same way they came up with charging fees on shipping to stop shipping over charge. There are much better ways to find out what sellers are honest and what sellers are not with out hurting all sellers.
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by: JohnGermaine This user has validated their user name.
       
Fri Jun 15 10:40:22 2012
LOL  LOL  Sounds like the ''Prom Dress'' scam.  Use it and send it back??

Lordy, what will those morons come up with next!!
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This user has validated their user name. by: Bad Hair Day
       
Fri Jun 15 11:20:13 2012
Lately everything eBay does screams ''WE'RE DESPERATE''! Is this the impression they want to convey to potential new & existing customers? Possibly sales are down because Buyers are ALSO getting fed up with all their nonsense!
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by: pace306 This user has validated their user name.
       
Fri Jun 15 11:20:18 2012
LMAO - OBVIOUS plan to get more control over the mechanics of the sale, and to finnish off the sellers and thier return policies - the ones they dont like.

Sellers who agreed the new 14 day policy BS, were/are allowed to add additional terms to the return, semi-enforcable ones - ie restocking fees. When I complained bitterly to eBay about thier new (ie use/abuse/return policy) I was told ''Dont worry, you can always add additional verbage (conditions - items must be returned complete etc) AND restocking fees.

I then asked - wouldnt that open me to retaliatory negative feedbacks? To which I was told ''STFU - its part of business, you should learn that customers expect an easy no hassle return policy''.

Well, my non defective returns have gone up from 1 a month to about 10, and NO ONE likes (DUH) or even wants to put up with the restocking fees. Oh yeh - and I got a negative and a few low DSRs from it too! (thank you eBay!)

The 14 day issue is part of the integration of eBay and Paypal payments and the terms will swallow us all alive. Payments ala eBay Germany are comming here soon! eBays $2 lawyers are busy looking over state finance agreements as we speak to see if they are legal to do here. Of course since we all ''agree'' to it , it doesnt really matter ... (logging into eBay and actively using the site constitutes an automatic agreement that you will agree and comply to eBays TOS) which has been changed without your knowledge and can contain ANYTHING they want! THAT is thier out. (of course I cant tell you how legal that REALLY is)

Once you send out items with out being paid and hope to get ur funds from eBay - THEY have control over the refund process - you dont.

They now will control what you can list, how you can list it, what payments to accept, what terms you have for returns and when you will get payed. I NEVER KNEW EBAY WAS MY BUSINESS PARTNER! I never asked for it either!

If they want to float a customers purchase for 14 days - no problem - as long as I get my funds that moment and NOT 14 days later.

I dont trust eBay, I know them to be fraudsters, liers, cheaters, scam artists, criminial accomplisess and more - theres no need to give them any more power then they already have.
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