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Wed Apr 30 2008 11:28:54

eBay Changes PayPal Echeck Blocking Policy

By: Ina Steiner

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eBay will soon prohibit sellers from blocking echeck payments funded through PayPal. An echeck is an electronic funds transfer that withdraws money directly from the sender's bank account. According to the PayPal website, "It's just like writing a check, only it is done electronically." Beginning May 7, eBay sellers will no longer be able to block echecks.

Most odd about the policy change is that, as far as I can see, eBay has not yet announced it other than mentioning it in this one discussion thread.

Sellers have been inclined to block echeck payments because it takes days for payment to show up in their account - so buyers don't like it either, because it takes longer for them to get their items!

According to the PayPal website, it takes up to 4 business days for electronic funds transfers to complete and for the funds to become available to recipients when using a US bank account, up to 8 days for Canadian bank accounts, up to 9 days for UK bank accounts, and 7-8 days for Australian bank accounts. The recipient (seller)'s balance does not reflect echeck payments until the funds transfer is complete.

In the latest Town Hall meeting, an eBay buyer wanted to know why it was suddenly taking a long time for PayPal payments to go through, whereas in the past, payment was instantaneous. The moderator said it was likely because his balance had gotten low and PayPal was sending echeck payments, which take longer. I found it surprising the buyer had no idea that this was going on! (Town Hall meeting transcript from April 17 not yet available.)

According to a thread on an eBay discussion board, eBay will be changing the messaging that buyers see when making payments. Monroe told a PayPal moderator that they had allowed sellers to block eChecks because "sellers and buyers alike expressed their concern that eCheck payments lead to shipping delays, general confusion around the experience, and ultimately negative feedback." He continued:

Soon, however, we will be implementing improvements to the eCheck experience designed to alleviate exactly those concerns. The changes being made will improve buyer expectations with regards to shipping dates. The changes will provide improved messaging during the eCheck payment flow, in the transaction details for both buyers and sellers, and in our email communications. These changes will provide buyers with a better understanding of the process and will clearly call buyers' and sellers' attention to the eCheck clearing date.

This is significant. With sellers being rated on shipping delivery times, this could add another friction point between buyers and sellers that could lead to lower DSR ratings, which influence how listings are ranked in search results on eBay. While Monroe said eBay would make changes to improve buyer expectations about echecks and delivery times, it's pretty likely buyers are going to make sellers accountable for shipping delays, no matter the reason.

It's interesting to note how PayPal funds eBay transactions - in this order: Balance; Instant Transfer from bank account; PayPal Credit; Credit card or debit card; and eCheck. ("If you don't want to use your Balance, you can withdraw it before making a payment.").

PayPal users may change their default preferences, but, PayPal "will use your Balance before your Preferred Funding Source, unless you choose PayPal Credit or eCheck."

It is also interesting to note that PayPal's User Agreement still states, "eCheck is the only Funding Source that eBay Sellers are allowed to block."

Some clarity on echecks from eBay would be welcome.




Comments (31) | Permalink

Readers Comments

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: barbcity

Wed Apr 30 12:14:17 2008

Something else has changed on PayPal in the last day or so.... at least for me. The e-mail notice of payment from PayPal no longer lists the buyers name and address (which is often different then what they have listed on eBay). This has caused a problem for my business as my auction management program could pick out this information and insert it into my invoice. For the three PayPal payments I received last night and today the information has not been included on the PayPal e-mail... I have to go into my PayPal account and then cut and paste this information into my invoices... very time consuming. Amazon stopped including names and addresses in e-mails a while ago but at least they notified me ahead of time. I have had no communication from PayPal on this that I can find.... has anyone else noticed this change (no more name and address on payment notice e-mail) or is this unique to me?

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: mimiluvspappy13

Wed Apr 30 12:25:14 2008

I agree that eBay should have come out with an announcement about this when they changed their policy wording. Paypal does have an update to the user agreement with an effective date of May 7,2008 which shows what the new wording will be. The wording about blocking echecks will be removed.

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Jack

Wed Apr 30 13:07:11 2008

@Barbcity,

I also received a Paypal email without an address, yet I received emails after that and they all included the address. 4/27, 2 emails, one without address. 4/28, 3 emails, all with address.

Glitch?

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

This user has validated their user name. by: Ina

Wed Apr 30 13:10:36 2008

eBay JUST announced the missing-address glitch on the System Announcement Board:

"Some PayPal payment notification emails are currently missing the shipping address of the buyer. You can still reference the buyer's address through the Details link of that transaction in either the Recent Activity or Account History section of your PayPal account

We apologize for any inconvenience this has caused and are working to resolve this issue as soon as possible."

http://www2.ebay.com/aw/core/200804300948221.html

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Fruity

Wed Apr 30 13:39:08 2008

That's not all they changed. They are now for the checkout system moved stuff around so the buyer can't readily see the money order option. but when you do click on it, it has this big section that tells you why you SHOULDNT, like you are unsafe. What a bunch of crap

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Bob H.

Wed Apr 30 15:55:39 2008

Been selling for 3 years now and probably average 8-10 eChecks per month. Each buyer receives an email from me thanking them for their order and stating that their item will be shipped as soon as the eCheck clears the banks, and that it usually takes 4 business days for that to happen. When it clears, I send them a message stating that it cleared and their item is now being shippped.

Have NEVER received a negative FB remark from an eCheck paying buyer. If eBay ALSO tells them that in a new message, that's an extra bonus for me.

But, I will still keep sending my own email message thanking the buyer for payment and stating when the item will ship.  

In some ways, I'd rather they pay by eCheck than use a credit card. One less way for the buyer to try a chargeback. The important thing is DON'T SHIP until that eCheck clears!

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: tekgems

Wed Apr 30 17:12:53 2008

If eBay & Paypal are making eCheck a requirement, then I hope Paypal gives a guarantee to sellers that the eCheck is instantly good. If the eCheck is cancelled or bad, Paypal eats the charge. If you're going to force sellers to accept it, let Paypal take the risk and I'll be happy to ship your order immediately!

Just in time drop shippers are gonna hate this.

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Walter

Wed Apr 30 17:35:47 2008

Much like Bob H., we send each buyer who pays with an echeck an email the day that payment is made explaining that the MOP they've used causes a delay, and we take the extra step of telling them why this may have happened (expired CC is often the cause).  We also tell them how to fix it and offer the option of rejecting the echeck payment and letting them pay again once they've updated their paypal account with the new CC info.  Buyers rarely chose this option, but we get a good number of thank you emails for explaining it to them.  (We're careful in our emails not to alienate those who pay with echeck by choice - we're perfectly fine with echecks.)

I complained to my paypal rep ad nauseum about the lack of notification paypal provides to buyers in this scenario.  Buyers have no clue that the MOP that's been used causes a delay in order processing.  So much time and money wasted on trying to 'Improve the Buyer Experience' and yet they understand so little about the buying process in the first place.

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Tim

Wed Apr 30 18:00:04 2008

With the new DSR and eBay emphasis on shipping FAST communicated to the buyer, I have been upset for quite some time that eBay/PayPal would not clearly communicate with e-Check users that this would mean a delay in shipping.

I have done two things: 1) I quote PayPal in my 'payment received' e-mail to the buyer.  I can not tell you how many have expressed true surprise - and a couple have changed payment methods! And 2) I have started to ship before the darn thing clears.  What can I do... eBay sets up the expectations and then PayPal sets me up for a poor DSR.  It's the One-Two Punch.  I decided that I don't wait for a paper check to clear, why should I wait on a PP e-Check to clear?  However, I do not appreciate eBay/PayPal putting me between a rock and a hard place.

I will appreciate the new wording - but will believe it when I see it... after all, PayPal can't even seem to be able to send me the address I must ship to!

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: tj

Wed Apr 30 21:21:22 2008

We all know very few buyers read ANYTHING..this is going to hit DSR, I’ve had echecks take 14+ days to clear with buyers asking where’s my item after 5 days ...that’s with INTERNATIONAL shipping ?????...Paypal should guarantee all payments….after all that’s what we pay the fees for & why all Paypal customers have to sign up with personal financial details ?????
eCheck is a totally incorrect name as the payment has been made to Paypal by various means  usually credit card or bank deposit…so it’s down to Paypal to verify all the payments , not just  keep sellers waiting in limbo and then get the “payment not cleared” email 4 weeks down the line

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Julie

Wed Apr 30 22:46:15 2008

I got my first echeck last week b/c blocking them has been disabled.
It cleared, I got a message from ebay to ship, & I did.
Last night I got a message that the payment was "under review" & the payment has been yanked from my account.
What a complete pile of s***

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Andrew

Thu May 1 05:45:51 2008

They're doing this to reduce their processing costs.

ACH (eCheck) costs them < $0.10USD.

Credit Card cost them something greater than $0.10 + 1% (highly variable with all sorts of conditionals.)

The big difference is eChecks are flat rate for them, whereas Credit Cards have a percentage cost.  So eChecks are much cheaper to process.  There are also huge differences in reversal costs for them, with eChecks again being much cheaper.

Lastly, there's no way to do an instant eCheck transaction because the US ACH system is in the Dark Ages and doesn't support even account number verification let alone something like real-time balance information.  (Credit cards clearly do both of these.)  It can be provided as a service, but it's really more like buying an insurance policy that a particular eCheck won't bounce.  Costs for those services vary, in my experience, they make credit card processing charges look cheap...

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: jsicolts

Thu May 1 07:33:04 2008

That's it. We are done with sleezebay. Our Half.com store is closed & we are closing our ebay store. BOYCOTT.

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: BFD

Fri May 2 10:05:58 2008

Keep boycotting and keep leaving eBay. My sales just keep going up and up as the competition gives up. Exactly what eBay wants you to do! They want the whiners gone!

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: LW

Fri May 2 10:55:06 2008

I explain the payment by e-check shipping delay in all of my auctions, under my payment terms paragraph. Upon receipt of PayPal's notice of payment by e-check, I also send an email reminding the buyer of the delay in shipping.   Never had a problem or negative FB about this.  Hundreds of e-checks over the past couple of years.

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Ann

Fri May 2 16:23:34 2008

The REAL problem with PayPal's new policy change going into effect on the 7th is that if there is an item not as described complaint by the buyer, the buyer is told to ship the item back to PayPal or a ''third party'', NOT the seller. Then the money is reversed back to the buyer (including the shipping, which the seller has already spent on the buyer's behalf and at their request! (which is a whole other issue!!))

The seller will NOT receive the item back and will NOT receive the money either. It is theft! by PayPal! Sellers are being shafted and having their items stolen by PayPal, simply because a buyer filed a complaint, which is often wrong. And there is no appeal process either. PayPal will tell you to report the buyer (!) to your local police department, who will just LAUGH at you and not even take the complaint, because as interstate commerce it is out of their jurisdiction and PayPal knows this.

Ina, I think you should have someone check the legality of this!! Any lawyers out there? Depending on the value, this could be considered GRAND LARCENY!

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Julianna

Fri May 2 23:56:54 2008

Ann...Same thing happened to me, too.  I bought a framed print that arrived damaged.  Paypal said to mail it to them.  I replied, "Huh??  The glass is broken and the frame is chipped!"  They still wanted it.  So, I mailed it to them...broken glass pieces and all!

What would Paypal do with all the Item Not As Described garbage they are getting from disgruntled buyers?  

Sure makes me wonder if Paypal has an Ebay selling account! LOL

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: dimes

Sat May 3 03:48:01 2008

Did paypal by any chance ask you to ship it to ''their'' Dallas address?

That address happens to belong to a company called Liquidity Services, which runs a website called liquidation.com.

http://www.liquidation.com/

That site is used as a product source by many people who then resell the items on eBay.

There is a long thread on the paypal board about why paypal asks for potentially counterfeit goods on which it pays SNAD claims to be sent to a place where they will be resold.

Many posts ask paypal employees to comment on how it differentiates the returned counterfeits from simply returned or damaged merchandise.  

The only employee post is #251 of a 254-post thread, in which the employee claimed to be ''gathering all the facts''.  That was back on April 16th.  

http://tinyurl.com/3r8cvv

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Gaz

Sat May 3 06:40:23 2008

I find those last few posts about PayPal having goods sent to them as very interesting.

I live and sell from Thailand with a UK PayPal and eBay account, but my bank is in the UK and that's the "registered" address PayPal use for instructing returns.

Thisa is particularly annoying because not only do we have to refund the expensive "half way around the planet" outbound shipping to the customer, we then have to pay it again to have the goods sent back to Thailand from the UK "bank-correspondence" address.

PayPal continually ignore our terms of sale, and UK laws that state returns must be sent to the sellers Operations address.

Since Rajiv left PayPal, and JD took over at eBay, it seems to me that both sites have gone to hell in a handbag, and are projecting "invulnerability syndrome".  But then, so did Enron.

Gaz

eBay Changes PayPal Echeck Blocking Policy   eBay Changes PayPal Echeck Blocking Policy

by: Julianna

Sun May 4 01:31:20 2008

Interesting, Dimes.  No word from the pinks since mid-April on that thread.  Typical.  

For the record, being counterfeit was not an issue for my situation.  During the dispute, seller would not refund for damages (the typical "when it leaves my hands, it's no longer my fault" refrain), so Paypal asked item be sent to THEM, not to seller, which I found very odd.  I got my refund, but I always wondered what happened to the pile of broken glass and chipped wood frame they made me ship to them.

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