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Thu Apr 14 2011 16:09:30

PayPal Survey Points to Interest in Escrow Service

By: Ina Steiner

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A reader forwarded a screenshot of a survey PayPal is conducting that asked, "Which of the following improvements would motivate you to use PayPal more often?" The reader cited one of the options - "Pay After Delivery, i.e. PayPal withdraws the payment after you confirm that the product has been received and is in good order," and said he was concerned about the possibility of PayPal changing its model to an escrow service:

"What is really scary for sellers is the next to last question, which appears that PayPal may be considering becoming more of an escrow service for all sellers and holding payments until items are delivered. As worded, they make it sound like they would not take the payment from the buyer until the item is received. Knowing PayPal, I would not be surprised if they are using that wording now, and will change later to a flow where the payment is made at point of sale, and PayPal holds the funds until the item is delivered."

As we reported in December, PayPal is already testing a Pay after Delivery service that allows its top buyers to pay for items after delivery.

In addition, as part of its Spring 2011 seller announcement, eBay announced an escrow-like service - see the section called, "Escrow Payment-Holds (Beware Cash-Flow Issues)" in our Cheat Sheet guide to the Spring announcements.

The last option also looks interesting: "Automatic payment of eBay purchases using PayPal after I have bought an article or won an auction." That sounds like an "immediate pay" feature but on the buyer side rather than the seller side. Immediate pay cuts down on deadbeats, but would buyers be irked if they forgot they had set their preferences this way?

Let us know what you think, and does it make sense for PayPal to offer an escrow service?  




Comments (29) | Permalink

Readers Comments

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: A. Nonymous

Thu Apr 14 17:12:20 2011

If I actually SOLD anything on eBay I would be delighted to use Paypal more. (LISTING is not SELLING).

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

This user has validated their user name. by: Anonymous Annie

Thu Apr 14 17:14:15 2011

I'd only use such a ''service'' if it were FREE for me, and the escrow charges were the responsibility of the buyer.

Businesses who offer a traditional ''COD'' shipment, where the money is collected by the USPS carrier, do not typically absorb the additional COD service charge. They pass it along to the buyer.

Considering PayPal's abysmal record of how they handle questionable (or outright fraudulent) claims of ''item not received''... and always in favor of the buyer, I'd have absolutely NO CONFIDENCE in any sort of escrow-type features offered by PayPal.

And now that I think about it, I withdraw my earlier approval... and I'll go on the record by declaring NO! ... I'd not use a PayPal escrow (or escrow-lite) service under ANY CIRCUMSTANCES WHATSOEVER! --- ABSOLUTELY NOT! NEVER! Not even if it *was* free, and not even if it earned me a ''rebate'' or ''cash-back'' reward. FORGET IT!

It's just another gimmick and an unnecessary risk to the merchant! It's just another weak link to be exploited by thieves and scammers.

TAKE A HIKE, PAYPAL! You're certainly not my favorite way to get paid. You're definitely not ''trusted'' or ''most loved''.

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: STOP IMPOSING YOUR FAILED INNOVATION ON US JD

Thu Apr 14 17:46:57 2011

PLEASE every seller, if they ever make it so these buyers can pay after we ship their item quit immediately !

I am just bout done with eBay, hopefully I will be earning my living elsehwere, own website etc.

Donahoe can shove eBay and Pay Pal !

This confirms 100% small to medium sellers are to take a hike soon, if not the noose will just keep getting tighter, Donahoe wants the large and largest of merchants, enough of the small and mediums, we ARE expendable

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Delores Dunlop

Thu Apr 14 17:50:22 2011

@Ina -- ''Immediate pay cuts down on deadbeats, but would buyers be irked if they forgot they had set their preferences this way?''

This would be a concern for me as well. We all know that many buyers aren't the most diligent in the most basic responsibilities (such as reading the item description or keeping their contact info up to date) so it's a safe bet that there were be an uncomfortable portion of those who would also forget how they had configured their PayPal account OR who didn't completely understand the meaning and implications of configuring their PayPal account for ''auto-pay'' or ''auto-withdrawal''.

Doubtlessly, these buyers would express their displeasure and frustration by taking it out on the seller's feedback rating or the seller's DSR's.

Would it eliminate (or reduce) late payers? --- Probably.

Would it save me time in having to remind people that they had won, or that their payment is overdue? --- Definitely.

Are the risks (to my DSR's and feedback) worth the reward of prompt payment with fewer reminders? --- Not a chance!

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Susan
Web Site

Thu Apr 14 18:08:40 2011

Wonderful, after coaching customers how to use paypal- customers who don't even read click here to return to shop, now I won't get paid unless they decide to go back to paypal to say they have to paypal now.
I don't see the incentive for buyers to go back to acknowledge receipt especially if they don't, they don't have to pay.
I would just like them to get rid of the Buy Now, Pay Later banner after I've clicked not interested everytime I see it

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: RDR

Thu Apr 14 20:52:38 2011

Is it just me, or could this be a sign of desperation?

Where are the questions about them not using paid shills, or freezing and seizing accounts of orgs like wikileaks or bloggers who's area of interest they disagree with?
Or whether they intend to ever operate legally with respect to the various  money-transmitter licenses?

Have things like that had a negative impact upon good ol' pp?

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Kevin

Thu Apr 14 21:12:33 2011

I hear alot of bad things about paypal and how much people hate it....to be honest, I've never really had a problem with paypal but if they went to this model I would not use it.  

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

This user has validated their user name. by: Philip Cohen

Thu Apr 14 21:45:11 2011

Just about every thing that these headless turkeys have ever decided to try in the past couple of years has reeked of desperation.

Still, the first quarter financials due on the 19th might throw some light on how the eBafia Don’s grand three-year "turn around" plan has turned out; or, maybe, like Mao, another three year plan will be announced as required for the chief headless turkey to finally complete his interment of the eBay marketplace six foot under.

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: mickeyfinn This user has validated their user name.

Thu Apr 14 21:53:32 2011

@Susan: "I don't see the incentive for buyers to go back to acknowledge receipt especially if they don't, they don't have to pay."

Making life TOO easy for buyers to scam - even those who would not actively do so.

"I forgot" will become the golden phrase that falls from the lips of buyers and lay before the sellers like a carpet of autumn leaves - which PayPal will expect them to traverse ... without crunching a single one.

"... there is much for you to learn, young grasshopper."

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Patricia This user has validated their user name.

Thu Apr 14 21:53:36 2011

Its a foolish time to aggravate sellers even more what with Visa and American Express breathing down their necks!....but then we never could credit Ebay/Paypal with brains!

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Ming The Merciless

Fri Apr 15 00:16:34 2011

The most important thing to keep uppermost in our minds is the fact that PreyPal is a financial predator.

From the usurious interest rates Bilk Me Later charges to this pay after delivery seller scam, PreyPal is another branch of the biggest small business killer in the country.

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Brent Adkins

Fri Apr 15 07:21:08 2011

Depending on the details of the policies is where this could get ugly.

All ready paypal acts as an escrow service in the sense that it does hold me from gaining access to money for a product that is going to be delivered.  That money is held from my access to make sure the payment is not disputed before I withdraw it.  I see this as a way to relieve stress or concern with BUYERS by saying its an escrow service but it actually works in the same way that it does now.  I cannot see any system involved that relies on the honesty of the person receiving the shipment and THEN paying for it without having a deposited amount of money on hold.  

I do believe that they want paypal to be a large success and widely used for internet services but changing what they have now would be a large mistake.  From what I can tell, this company is prone to making many mistakes so I can be wrong but usually a company doing research doesn't want to change something completely, just offer a different line to control.  

Any system that waits on the item to be shipped before they pay for it is WAY to open for scams and lost shipping costs.  It would change the window shopping to order everything you think you wanna buy, look at it, and when it gets there, decide if you want the person who mailed the product get any money.

I must have been wrong in thinking it was all ready an escrow service

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Scotty

Fri Apr 15 07:39:46 2011

I could use a new lawn mower for the summer.  At the end of the summer, I don't think it performed as it should have....so I am not paying for it nor returning it (or better yet, I am returning it and the seller can pay the return freight).
Next summer I think I will ''buy'' another lawm mower to ''test'' it out as well....
There's nothing we can do folks....these guys are nuts.

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Scotty

Fri Apr 15 08:04:46 2011

One last thought on this subject, as a shareholder, I move to impose the same rule on the paycheck of Ding-dong-hole and his cronies.  Let's see how long this would last if they were subject to the same rules.
Note to Board of Directors:
I would like to return the management of Ebay from whence they came as they are ''significantly not as described''.  I will therefore not be paying my ''fees'' as the product delivered is not what I thought I bought.

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: STOP IMPOSING YOUR FAILED INNOVATION ON US JD

Fri Apr 15 10:15:57 2011

Hey Scotty, your right ! Also I think I will just tell my Sister to buy her best wedding gown she can on eBay, use it for the pics and wedding, then decide it was not as nice as you thought it would be, don't pay for it, keep it if sellers does not pay for you to return it

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: STOP IMPOSING YOUR FAILED INNOVATION ON US JD

Fri Apr 15 10:21:58 2011

I said it once, I will say it again, selling on eBay is over for the small and medium sellers

The market is dead, the economy, and Phillip Cohen is right about JD putting the site six foot under

I am sad to say, I realize my career is over with a capital O

My next strategy is my own website
Amazon is not doing good for me

eCrater has produced some sales, but not enough per year to keep me afloat

So a part time real job, my own website, and other venues like eCrater should free me from eVilbay soon

I am done stressing, I don't care what John Donahoe implements very soon hopefully, as I will be free from this abuse

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: ZZTopshlf

Fri Apr 15 14:47:31 2011

This is just another way for Ebay to make money. They will make loads of cash off of the interest racking up with all this money sitting in ''so called'' escrow without having to pay us any of it. WHAT A GREAT SCHEME THIS IS!

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Joe Average

Fri Apr 15 15:21:28 2011

Buyers love free shipping, so Paypal should deduct what they feel is a reasonable shipping charge from the seller and credit it to the buyer.

Buyers love remorse, so if for any reason they are not completely eternally happy, ie the color doesnt exactly match what they saw on their screen, or the fashion trend has changed, new tech. is on the way, they should be given credit with free return shipping (again, because they love free shipping.)

The customer is always right, and on eBay, apparently, that is the buyer, even though the seller is paying the fees. Lets all get with the program and go with the flow.

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

by: Here Again

Fri Apr 15 19:21:09 2011

This escrow idea may just be the straw that sends me off to get my own merchant account.  That way I won't need PayPal at all.  My customers can use their credit cards and I don't have to put up with this PayPal insanity.

Of course, I'll still offer my customers other payment options like Google, etc.  Just not PayPal.

And I have a gut feeling that I may actually get more sales by avoiding PayPal as long as there is an easy credit card option for my customers.

Another great business idea from eBay/PayPal.  Duh!

PayPal Survey Points to Interest in Escrow Service   PayPal Survey Points to Interest in Escrow Service

This user has validated their user name. by: Philip Cohen

Fri Apr 15 20:41:58 2011

Notice of [PayPal] Policy Updates

“PayPal recently posted a new Policy Update. You can view this Policy Update by logging in to your PayPal account. To log in to your account, go to https://www.paypal.com.au and enter your member log in information. Once you are logged in, look at the Notifications section on the top right side of the page for the latest Policy Updates.

“The entire User Agreement has been revised. A copy of the revised User Agreement is contained in Schedule A, below. In particular, the PayPal Buyer Protection Policy and Buyer Complaint Policy has been revised with material changes to the Buyer Protection Policy and removal of the Buyer Complaint Policy. The revised PayPal Buyer Protection Policy contains material changes for sellers and buyers.”

I’m far too old to try to explore all 27 pages of this rabbit warren; maybe auctionbytes will so kind as to summarize it for all we simple peasants.  

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