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PayPal Sends Notice of Changes to eBay Sellers

eBay announced on Friday that the separation with PayPal will be completed by July 17th, and over the weekend, PayPal sent an email to customers to let them know what they could expect after it becomes an independent company, and reminding them of new policies taking effect this week.

“The only change you should experience is that you’ll now contact eBay and PayPal separately regarding your respective accounts,” PayPal wrote in its letter. However, it also said, “One major change that will happen after separation is buyers will now have the opportunity to raise a claim with PayPal after they have opened a claim with eBay. They can do this before a decision has been made by eBay or if they are not happy with a decision made on an eBay claim.”

An eBay seller who received the email on Sunday said, “If sellers were not compelled to leave the eBay venue and dump PayPal as a payment service provider in the past, it is highly likely that this recent round of PayPal policy changes will cause some to pause and reconsider their options.”

In reading a FAQ included in the email, it becomes clear what one of those concerns is about: “Does this mean the buyer will be able to lose a case on eBay, and then come to us to file a separate claim where our buyer protection rules are more apt to find in the buyer’s favor? (ie, eBay will make decisions based on the return policy spelled out in the listing, PayPal does not).”

The answer to the question: “PayPal will adjudicate according to PayPal policies. Since buyers have always had the ability to file a claim on either platform, sellers should follow the most stringent requirements.”

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After the two companies separate, PayPal sellers have to contact eBay if they have questions related to eBay, and buyers will be able to file claims against both companies. However, certain ways eBay and PayPal work together are not changing – for example, in a FAQ about whether eBay performance would continue to trigger PayPal holds, PayPal said, “these holds will still continue as they are today.”

PayPal had already notified customers in May about changes to its policies taking effect on July 1st. The new PayPal User Agreement does include a provision stating that there will be no double recovery for buyers:

No Double Recovery. You may not file a Dispute/Claim, or receive a recovery, for a purchase under PayPal Purchase Protection if you have already received a recovery for that purchase directly from eBay, the seller, or another third party, or if you have already filed a case for that purchase with eBay, the seller, or another third party.

The full PayPal letter, which included FAQs, follows:

PayPal is starting a new journey as an independent company, and in the second half of 2015, we’ll once again be publicly traded on the NASDAQ with our original stock ticker symbol of PYPL. This is a meaningful symbol for the company because it represents our commitment to the spirit of the original vision that sparked the launch of PayPal 17 years ago.

We also have a commitment to the important people who have helped us on this journey: you, our customers. You’ve trusted us to help you grow your business, so we want to ensure you’re aware of a few upcoming updates to our processes and services as we separate from eBay. To help you understand these changes, we’ve outlined two of the most common questions below, and captured the rest of our frequently asked questions in this message.

Once PayPal is an independent company, buyers will have the opportunity to raise a claim with PayPal after they’ve opened a claim with eBay. They can do this before a decision has been made by eBay or if they aren’t satisfied with a decision made on an eBay claim. This is similar to what happens with a chargeback today. If this occurs, we’ll follow our normal claims process and will reach out to you for additional information regarding the claim. If a decision was not yet made by eBay, the claim will close out and continue on PayPal. A buyer won’t be able to go to eBay to file a claim if they first came to PayPal.

Also, our purchase protection is now being extended to intangible items and services. You should be prepared to provide “compelling evidence” that you provided the intangible or virtual item or service, should a buyer dispute a transaction. Compelling evidence includes any evidence available to prove the buyer received the goods or services, or benefitted from the transaction. Examples include proof the buyer accessed your site or downloaded a file, and/or relevant portions of terms and conditions to which the buyer agreed. Although Purchase Protection will now extend coverage to buyers for intangible items, Seller Protection won’t apply to intangible items. However, having proper proof of delivery can help a seller win a buyer’s purchase protection claim.

For more information on these issues and many more, please refer to our frequently asked questions below and at PayPal.com.

As an independent PayPal, we’ll be singularly focused on continuing our vision to be the open platform for digital commerce. That focus will allow us to accelerate our innovation so that we can deliver even better experiences to you and your customers ­ whether in store, online, or on mobile.

We know that your trust and partnership has gotten us to where we are today and look forward to a bright future together.

FAQ

Why are eBay and PayPal separating? 
Creating two standalone businesses best positions eBay and PayPal to capitalize on their respective growth opportunities in the rapidly changing global commerce and payments landscape, and it’s the best path for allowing us to focus on becoming an even better payments partner to our merchant customers.

What does this mean for me? 
The only change you should experience is that you’ll now contact eBay and PayPal separately regarding your respective accounts.

When will this be happening?
The companies plan to separate in Q3 2015.

How do I get support from PayPal if I need help? 
Please continue to contact PayPal as you always have. If you have any questions, you can click the Contact link once you are logged into your PayPal account for the phone number and hours of operation.

How do I get support from eBay if I get help? 
For eBay-related questions, please contact eBay.

Do I need to do anything to prepare for this change?
No. The separation of eBay and PayPal will have minimal impact to your experience with us.

If there is an eBay dispute on my transaction, will this payment be held in PayPal?
Our process in this area won’t change. PayPal and eBay each have buyer protection programs and in certain circumstances, we hold payments while the disputes are resolved.

Are there any PayPal protection policy changes after the eBay and PayPal separation? 
You can find the latest PayPal protection policy here:
One major change that will happen after separation is buyers will now have the opportunity to raise a claim with PayPal after they have opened a claim with eBay. They can do this before a decision has been made by eBay or if they are not happy with a decision made on an eBay claim.

This is similar to what happens with a chargeback today. If this occurs, we’ll follow our normal claims process and will reach out to you for additional information regarding the claim. If a decision was not yet made by eBay, the claim will close out and continue on PayPal. A buyer won’t be able to go to eBay to file a claim if they first came to PayPal.

Does this mean the buyer will be able to lose a case on eBay, and then come to us to file a separate claim where our buyer protection rules are more apt to find in the buyer’s favor? (ie, eBay will make decisions based on the return policy spelled out in the listing, PayPal does not). 
PayPal will adjudicate according to PayPal policies. Since buyers have always had the ability to file a claim on either platform, sellers should follow the most stringent requirements.

Changes to micropayment fees: will accounts be grandfathered in? 
Accounts that are currently under micro pricing are not changing at this time.

If my eBay account gets limited, will this affect my PayPal account? 
No, there is nothing that exists today that places limitations automatically between our two companies as we have different processes that determine limitations. Should you have this experience where both accounts are limited, you will need to work with each respective company to resolve the issue.

Can you clarify your policy on purchase protection being extended to intangibles? 
Proof of delivery for intangible or virtual items or services is documentation satisfactory to PayPal that the item or service was provided to the buyer such as proof of download including the date of fulfillment.

Will my eBay behavior (eBay performance) still trigger my PayPal hold, such as Ship to Fund or New Seller Holds? 
These holds will still continue as they are today.

Will PayPal still be a payment method on eBay to send and receive money? 
Yes, you will still be able to use PayPal as a payment method on eBay to send and receive money after the companies separate.

What shall I do if I have questions on eBay? Can I still contact PayPal? 
For eBay-related questions, please contact eBay.

The new PayPal User Agreement can be found here.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.