eBay began rolling out managed payments (MP) on Monday, and on Wednesday, it made significant changes to its terms of use for the program, something participants should be sure to scrutinize.
A seller
published screenshots of the terms from September 25, which included a paragraph explaining how to opt out of the program. However, the terms currently on the eBay website do not include that paragraph.
The seller advised colleagues they could use the screenshot taken on Tuesday "as proof that the initial terms to which you agreed allowed you to opt out."*
It calls to mind eBay CEO Devin Wenig's tough tone when discussing managed payments in February: "It will (eventually) be the only way you can transact on eBay. It's not going to be optional. We're not going to hold peoples' hands and beg them to move over. We're basically going to say your eBay account is now your full end-to-end eBay account for all your activities including payments. And that's the way it works on every other marketplace."
The terms, found on
this page, also show "eBay Commerce Inc." is acting as an agent for sellers when it collects payments from buyers rather than acting as the merchant of record.
*** "The contract for sale underlying the purchase of goods is directly concluded between the seller and the buyer."
But once a buyer has paid eBay for a seller's item, that seller cannot go after the buyer if eBay doesn't disburse the seller for that purchase. "In the event that eBay Commerce does not make any such payment to you as described in these Payments Terms of Use, you will have recourse against only eBay Commerce and not against the buyer, as such payment is deemed made by the buyer to you upon receipt by eBay Commerce."
The terms of use spell out that sellers agree that eBay may reduce the amount of settlements "in the amount of obligations owed by you to eBay Commerce or its affiliates, subject to these Payments Terms of Use."
We advise participating sellers to read "Authorization to Pay eBay Commerce" in Section 5 especially carefully. It outlines ways it may collect owed amounts from sellers, including "Retaining such amounts from your current or future settlements."
However, the terms also state, "For clarity, eBay will continue to charge the automatic payment method you placed on file for payment of your monthly invoice."
eBay terms state it anticipates settlements will be settled in sellers' bank accounts approximately two to seven business days after the buyer's transaction and also grants itself permission to place holds on sellers' funds.
eBay advises sellers participating in the initial launch of managed payments that they cannot list items using eBay for Charity, international sites or through International Site Visibility, and the Global Shipping program and eBay Authenticate.
A seller informed us that some categories are off-limits as well, as he learned on Tuesday, though that is not spelled out in the terms. The list the seller forwarded, which we have yet to confirm, included: Coins & Paper Money; Adults Only; Gun Parts; Tobacciana; Breweriana; E-Cigarettes, Vapes & Accs; and Metaphysical.
Under fees, the terms state eBay charges 2.7% percent of the total amount owed to the seller, including shipping, handling, sales tax and other amounts owed and that it will charge a $20 chargeback fee.
The terms reference in passing Form 1099K. Sellers should note that payment processors are obligated to file Form 1099K with the IRS and some state departments of revenue for sellers meeting certain thresholds.
Be sure to read the terms carefully and stay alert for other unannounced changes.
*Update 9/27/18: I came across a
thread this evening started by a panicked seller whose sales have plummeted since being enrolled on Monday, and says they are unable to opt out. That's is very troubling indeed. (Seller was getting 30% of sales internationally, which is not allowed through managed payments, and reports getting emails from buyers asking why they can't pay with PayPal - also not allowed with managed payments.)
At least one of the sellers responding to the thread who also reported a sales drop as a result of being enrolled in managed payments on Monday reported they *were* able to opt out after repeated calls to eBay.
However, the fact that two days after rolling out the program and getting complaints about plummeting sales eBay would change its terms to eliminate the ability to opt out of the program is chilling.
***Update 9/28/18: Readers debated below whether eBay was or will be the merchant of record as it rolls out managed payments. We looked again at the terms of use and are not sure. In January, eBay's CFO said eBay hadn't made a decision and said it might change "depending on the geography in which we operate." We don't see any subsequent reference to the matter, and don't know what the implications are to sellers of eBay being or not being the "merchant of record." (Thanks for raising the question!)
One thing we can say with 100% certainty: certain Wall Street analysts are very interested in the payments transition. We're not sure if eBay executives will update sellers, but we do expect them to address the transition during its next earnings call with analysts in a few weeks.
Sellers: Read Terms of Use for eBay Payments Now
by: Ina 
by: Lightning 
by: The End