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Wed Sept 4 2013 14:21:51

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

By: Julia Wilkinson

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I chuckled to myself the last couple days, because I noticed the low-priced items I recently sold on eBay were paid for lickety-split. Funny how that works. But the meatier recent sales were just festering.  Have you noticed this phenomenon with your own listings - that buyers take longer to pay for higher-priced items? One of my bigger-ticket item sold for several hundreds of dollars, so as you may imagine that one is on my mind.

I know eBay has a whole system of reminders, case opens, etc. for slow-paying or non-paying buyers. And that when you list something with Buy It Now (BIN), you can require immediate payment from buyers. But today, with my three slow payers, it got me wondering, why is there even a system where a high bidder in an auction does not pay right after winning?

It doesn't work this way in any offline auction houses I've attended, and it certainly doesn't work that way at retail stores. (Unless you are going to make a case for layaway, which I find an odd relic of the past, but maybe I'm wrong).

Could it be time to simply require all buyers to pay right away? What are the downsides to this; would there be fewer sales, for example, from people on vacation? But if they're on vacation, why can't they pay via the same technology they used to bid?

Just a modest proposal.

Do you experience slow-paying bidders often, and are they usually on your more expensive items? Should there be at least an option for immediate payment with auction listings? Post a comment here!




Comments (54) | Permalink

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Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Rexford

Wed Sep 4 14:55:50 2013

I am still amazed that, in the year 2013, eBay sellers still have to deal with deadbeat buyers.  All bids should be backed up with a credit card, and that card should be charged the minute that the bidder wins the auction.

What is doubly baffling to me is why a non-paying bidder can come back to bid again on a separate auction after not paying for another and receiving a strike.  He/she can also leave negative feedback for the transaction if he/she doesn't pay.

Not only is the way the system is set up unfair to the sellers, it is unfair to the bidders who didn't win the auction.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

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

Wed Sep 4 14:57:55 2013

OP, I beg to differ; at traditional actions, an absentee bidder is not required to pay immediately, nor could they possibly do so in such circumstances, until they are notified that they have won; and, all bids on an eBay auction are effectively "absentee bids" ...

“The band continued to play on, even as the bow dipped lower and lower.”—The Titanic/eBay Story ...
Still, the executive lifeboats have all been well provisioned ... http://bit.ly/YvxFEg

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Basset

Wed Sep 4 15:02:54 2013

The only time I don't pay right away is if I'm watching another of the sellers items. At that point, I email the seller to let them know I may be a combined shipping candidate.


Most of my folks pay pretty quickly. Probably close to  95% of them pay ASAP. The others usually contact me about wanting more time to shop my store. Fortunately, it is pretty rare for me to have to open a NPB case.  

When I do have one, it is equally likely over an inexpensive item as an expensive one.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: juliawww

Wed Sep 4 15:25:14 2013

Philip, thanks for filling in that blank. Aha. Absentee bids...I guess that explains it. Although in the age of the Internet, does that mean we're buying everything in absentia? LOL. And at traditional auction houses, one does of course have the option to be there in person.

I just wonder..what if eBay added an option..not a requirement, mind you..an option, for sellers to make bidders pay immediately after winning? Maybe that's a moot point if everyone would then use that option. Would their sales go down? I wonder.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: juliawww

Wed Sep 4 15:26:46 2013

Hi Basset...I agree w/ you...I try to pay asap as well. A few times I may have been caught up in something and paid 2-3 days later. Also, the lion's share of all my buyers pay promptly. Not necessarily right away, but promptly.  

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

by: Duchess This user has validated their user name.

Wed Sep 4 17:06:34 2013

Requiring immediate payment for auctions is simply not a viable solution. Bidders are not always aware they have won an item -- some may not have 24/7 access to the internet, there are worldwide time zones to consider, and some may not have a credit card to place on file.  

To prevent fraud, buyers need to be able to control when and how payments is made -- whether by debit/credit cards, Paypal or in person for local pick-ups.  Personally, I am likely to use several different methods of payment and several different ship-to addresses.  I take advantage of discounted combined shipping in some cases, too.  No one -- and I mean NO ONE -- gets to automatically debit any of my funding sources without my personal intervention!  Can you imagine the potential for fraud if someone hacks an eBay account and starts buying?  Yikes!

Recently, a repeat customer in Germany won an auction; within hours she e-mailed to apologize for the bid -- she already owned the item and needed to cancel.  A few minutes later, I sent the cancellation request, she accepted and we were done.  No hassle with refunding an "automatic" payment and messing up anyone's finances.

In addition, immediate payment for each item certainly would discourage multiple purchases and prevent combined discounted shipping. That's a real bummer for both buyer and seller.  I don't use the IPR for BIN's when I sell, and I try to avoid sellers who do unless the item is of singular interest.

As a buyer, I pay fairly quickly, within 24 hours unless I have made other arrangements with a seller.
As a seller, I allow up to 4 days for payment.  Now that eBay allows filing a UID at 48 hours instead of 4 days, proper and reasonable restraints are already in place.  My buyers often pay within minutes (BIN or auction) and some wait until the next morning or sometimes as long as 2 days.  I have not had an NPB in more than a year, and filing a UID nudged a couple of them into paying right after they received the notice.  The 2 others got the strikes they deserved.




Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Ric

Wed Sep 4 20:13:49 2013

eBay could easily end the issue of non paying bidders but they choose not to.

Why does eBay drag their heels on this long festering issue?

Because every auction that closes with bids is counted by eBay as sold and thus grows eBay's GMV - even when no payment is made.

eBay could qualify every bid that is placed simply by pre-authorizing every maximum bid against the bidders PayPal account to assure sufficient funds exist in the account to cover the maximum bid.  Bidders would then receive a confirmation screen which would authorize payment up to the maximum bid amount there by authorizing the automatic payment in the event they are the winning bidder. The system would then complete the payment automatically when the auction closes.

This process would be a win-win-lose.... It is a win for sellers who would receive payments at the close of bidding. No more waiting, no more Unpaid Items to file for.

Buyers win too because now that their item has been paid when the auction closes, they will receive their item faster.

The loser is eBay... Why? Because with no more Unpaid Items inflating eBay's reported GMV, the company would have to find a new and different way to pull the wool over they eyes of Wall Street analysts every quarter. That new way might actually be harder to pull off and eBay might be exposed for the years of inflated GMV they have been reporting.

So, come on eBay, the solution is right here in black and white, and is simple to implement. The ball is in your court...what are you waiting for?

End the issue of non paying bidders if you dare!

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: iheartjacksparrow

Wed Sep 4 21:41:17 2013

I've always thought that Rexford's idea (immediately charging a buyer's credit card on an auction win) would be the ideal way to put an end to NPBs. Now that PayPal is the predominate way to pay on eBay, everyone should have a PayPal account that can be charged for purchases. Absent a plan such as that, then people should be suspended after they fail to pay for a second time.  

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Ming the Merciless

Wed Sep 4 23:41:54 2013

I have very few non paying buyers.

I give them 7 days to pay but most pay immediately.

If asked, I will offer fee free layaways on more expensive items and have only had one buyer in many years of selling default.

The only downside is the multiple 30 cent fees PreyPal collects if the buyer won't agree to money orders.

Layaways are better for the buyer than Bill Me Later which is precisely why ebafia moves us closer and closer to immediate pay.

Some of big boxes (K-Mart comes to mind) revived their long defunct layaway program last Christmas and others are following suit with variations.

While I have NPBs, what I do have is an increase in returns which ebay promotes and encourages to bolster their phony GMV report to Wall Street and to coerce sellers into managed returns -- another ebafia revenue generator at sellers' expense.


Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Marie

Thu Sep 5 10:17:48 2013

@juliawww

".....what if eBay added an option..not a requirement, mind you..an option, for sellers to make bidders pay immediately after winning?..."  This option is there for BIN or GTC listings. Just not for auctions or Best Offer type transactions.

************************

Requiring IP on auctions on the surface sounds like a great idea.  But this isn't a simple problem and the solution would not be simple.  It is far more complex for many sellers.  

For items that lend themselves to a buyer that buys multiple auctions, this is a real issue.  Or a buyer that wants to shop your auctions for a few days so they can combine the shipping.  These types of buyers would really lose out if IPR was in place.

EBay's combine shipping rules that a seller can fill out are not sophisticated enough to allow some seller to code effectively for the types of items they sell.  Ebay prefers one size fits all rules and it just does not work for this subject at all.

If IPR were forced upon us for all listings, both Ebay and sellers would lose.  We would lose some very valuable customers which like to combine shipping.  

It would work great for those that mostly sell one off items, but not so much for sellers that sell multiple items to one buyer.

I am not a fan of posting negative FB on buyers that don't pay.  There can be many reasons why a buyer doesn't pay.  Sometimes life just gets in the way.  They aren't out there to hurt anyone, just something happened and we of course may never know what that may have been.  But I do firmly agree that Ebay could step up and do more about this problem.  

A thought to consider.  I'm not saying this is the best option, just a thought to share.

First strike = Account limitations and blocked from setting up an additional account.

Second strike within a 6 month period = Temporary suspension  and blocked from setting up an additional account.

Third strike within a 6 month period = Loss of account and blocked from setting up an additional account.

While all transactions that have no payment associated with them, whether it is through non payment or mutual cancellation does increase the GMV that Ebay reports.  However it is important remember that GMV does not equal Ebay sales.  It is a number that they report to boost how much sales the Ebay site has hosted for individual sellers.  EBay's sales figures comes from fees and advertising [not considering other companies they own].

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Ric

Thu Sep 5 11:58:41 2013

Marie claims:  If IPR were forced upon us for all listings, both Ebay and sellers would lose.  We would lose some very valuable customers which like to combine shipping.  

I do not see the downside Marie speaks of.

eBay is not going to see a drop off in sales, actually they would realize a savings in Customer Service costs with IPR since UPI cases would virtually disappear.

Sellers will come out ahead as well as they will not have to follow up on UPI"s and since they would be paid with a pre-authorized payment, they will be able to ship items out to buyers so much sooner than they would if they had to wait for payment.

As to combined shipping, there may be a little more work for those sellers who do not include shipping in the starting price of their auctions.

When a buyer wins multiple auctions listed with calculated shipping, the seller would simply issue a partial refund when the order is packed and shipping costs are determined.

This is a small amount of additional work given that the seller is selling multiple items.

The only problem for sellers is deciding if they are going to deduct FVF on shipping from the combined shipping partial refund they will need to issue.

Another benefit for eBay that pre-authorized auction payments would create is that average balances in PayPal accounts might trend upward, and we know how much the company enjoys having money sitting in accounts.

As Marie points out, sometimes life gets in the way. Pre-authorized payments would go a long way towards keeping a buyers eBay auctions from piling on to the list as the payment would automatically be taken care of.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

by: ebay refugee camp This user has validated their user name.

Thu Sep 5 12:00:04 2013

Ebay gets their fees when an item sells, no matter if it is paid for or not. The definition of the term sold and sells are in question here.
Does the item need to paid for in order to be be a legal sale or item sold?
I think it does.
If a buyer does not pay I wait 5 to 7 days before I file. Most of my buyers pay immediately and I would be afraid that I might anger someone if I require immediate payment because of the current bad buyer plague on ebay. I say no until ebay cleans up their current attack on small sellers.
I have been waiting for a lawsuit to be filed on whether ebay can charge fees for a sold item that is not paid for. I cannot believe that is not being challenged. I have had buyers who did not pay that I did not file a npb because of communication and questions the buyer sent before the item was purchased, a experienced retailer can smell trouble right away.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Marie

Thu Sep 5 12:36:10 2013

@ Ric

Because something doesn't affect you does not make it any less of an issue, it just means it doesn't affect you.

If my sales drops off and other sellers sales drop off, you can bet Ebay sales are suffering too.  There are some things that just will not sell well on Ebay unless a buyer can combine them.  It is wonderful this doesn't affect you, but it doesn't make it any less a potential problem for others.

You are absolutely correct that UID cases would virtually disappear, so would some sellers.  Good sellers.  Sellers that have volume sales or sales that are meaningful to EBay's bottom line.

There are items that do not work well having free shipping.  For some products it is terrific, not so much for others.  

Refunding a buyer can work for some cases, but there are many buyers that will not want to pay it up front to later be refunded.  I have buyers that overpay for shipping from time to time.  I always refund them.  Some buyers, important buyers will be put off by the up front cost and go elsewhere.

I'm not sure why you feel you can speak for all sellers "The only problem for sellers is deciding if they are going to deduct FVF on shipping from the combined shipping partial refund they will need to issue."  It most certainly is not the only problem.  The loss of customers is an issue and it would happen.  Many Buyers are extremely S&H sensitive.  Those buyers would not like this process at all.

@ebay refugee camp

"Ebay gets their fees when an item sells, no matter if it is paid for or not."  If the item doesn't get paid for, Ebay only gets it temporarily.  It is refunded back to the seller IF the seller files the UID and closes it for non payment when appropriate.

I think it is doubtful that a court would even accept a lawsuit for the FVF paid to Ebay in a situation of an non paying buyer.  The seller has the ability to get that back if they file the UID and then close it for non payment when appropriate.  So if the seller chooses not to file the UID, it is then their choice and that seller has decided they don't care about the FVF.  IMHO a court would most likely say if the seller didn't care about it when they could have gotten it back, why should the court system care now.

"Does the item need to paid for in order to be be a legal sale or item sold?"  Yes it is a sale.  It is then written off by what is called a Bad Debt.  

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

by: Mr. Me This user has validated their user name.

Thu Sep 5 12:56:38 2013

In a fair marketplace (not ebarf) The SELLER should be able to determine payment terms ... a RECIPROCAL feedback system would warn sellers about deadbeat buyers , and DBR (detailed buyer ratings) would rate buyers on payment speediness and frivolous cases filed.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: juliawww

Thu Sep 5 13:06:41 2013

A reader just sent me this note, fyi, but asked not to be named as they don't generally comment on blogs:

''I wouldn't worry too much if the bidder/buyer has a decent feedback score. The main reason this tends to happen more with higher value items is the use of a bidding service such as eSnipe. When combined with a holiday like Labor Day, and especially when you have a holiday that becomes a 3-day weekend, you may see even more delays. This also isn't even figuring in the early bird bidders who might have bid a high proxy and don't get around to signing in or checking their email for a number of days after the listing ends.''

Bidders of higher value items in general are also much, much more likely to use a bidding service such as eSnipe so they aren't sitting right at their computer when the bids take place. I've caught flak from sellers for this myself because some sellers assume that a bidder is sitting at their computer when the final bids are placed. Combine this with a holiday like labor day (some people are going to take the rest of the week as vacation time, so possibly even 11 days of being out of town) and you are going to see more delays.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Ric

Thu Sep 5 13:41:53 2013

@ Marie

I believe that buyers would be willing to accept a tradeoff and would not see pre-authorized auction bids as something that would be an obstacle to placing a bid.

I am a buyer as well as a seller on eBay. If pre-authorized payment was part of the auction process, it would not deter me from bidding. Personally, I would welcome not having to monitor ended auctions to complete payment and would not see pre-authorized payment as a turn off at all.

While eBay has done it's best to kill off the auction format, I do agree with them that the large majority of buyers purchase with BIN because they want the transaction completed as quickly as possible.

I believe that pre-authorization of bids for the purpose of automatic payments would add some of the 'instant gratification' factor many buyers seem to be looking for.

Personally, I do not list many auctions because I do not want the high maintenance and payment pain points associated with the existing auction payment process.  If however, I knew that every bid was guaranteed to be paid upon auction completion, I would certainly revisit and use the auction format on eBay.

You seem to disagree that pre-authorization would work - fine.

To overcome that obstacle, eBay could offer the pre-authorization format for auctions as a seller listing option exactly the same way they allow sellers to select immediate payment required for BIN. In that way, sellers such as yourself would be free to experiment and see if it negatively impacts bids on your listings.

By the way, on my BIN listings, I require immediate payment on all items and my sales have grown despite the fact that many sellers are reporting hard times on eBay. After making the change, I retained my Powerseller and TRS status and my DSR scores have not suffered.

I accommodate buyers when they purchase multiple items with a refund for for excess shipping costs on combined orders or multiple BIN purchases. I have yet to have a buyer complain about upfront costs when they purchase multiple items and they are certainly pleased when excess shipping costs are refunded.




Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Marie

Thu Sep 5 15:40:29 2013

@ric

We will just have to agree to disagree on that one as I know that some of my buyers would not.  Many operate on budgets and have a certain amount set aside to come by and shop.  

I have no problem agreeing that for me personally I would not take issue with a pre-authorization of payment.  But not all buyers have the same needs or ability to do that.  

I list several hundred auctions a month to go along with about 2500 GTC listings. Of those around 2,000 require immediate payment.  For the others it doesn't work well on so I do not require it.  Different categories and/or different products may have different needs. So I have a pretty good understanding of both sides.  Auctions are just different than BINs and GTC.  They can't be treated the same because they aren't the same.  

Some poster keep comparing this problem to Amazon and how Amazon handled things but that isn't a fair comparison.  Amazon doesn't run auctions.  So there is no comparison.  If someone want to compare them to the BINs and GTC listings on Ebay, then that is fair.  And on Ebay you can do just as Amazon does, require immediate payment.  It is an option on Ebay and for me personally I want it to stay an option.  I do not want it to be forced as I have listings that it works for and some it doesn't.  It is my business and I feel I have the right to decide if it is good for my business or not.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Ric

Thu Sep 5 15:57:12 2013

@ Marie... what is there to disagree about?

This is not a one size fits all suggestion, and not something recommended to be mandatory for all sellers.

I am not suggesting (as you seem to believe) that this would work for all sellers which is why the suggestion is proposed as an OPTION.

If eBay were to offer the OPTION, you would then be free to CHOOSE if you wanted to use it in your auction listings or not - just like adding IPR to BIN listings.










Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: Marie

Thu Sep 5 18:26:16 2013

@ric

My BAD, I misunderstood.  I'm all into options.  Sorry about that.

Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?   Slow-Paying Buyers: Should All eBay Buyers Pay Immediately?

This user has validated their user name. by: iheartjacksparrow

Thu Sep 5 22:11:39 2013

Ric says: "Personally, I would welcome not having to monitor ended auctions to complete payment and would not see pre-authorized payment as a turn off at all."

I totally agree with that. When I win an auction, I prefer to pay immediately. Today I remembered that I was bidding on an auction that was ending at some point, and upon checking discovered I had won. I quickly sent payment. But it would have been so much easier just to let my account pay what I owed utomatically.

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