EcommerceBytes-NewsFlash, Number 3054 - April 30, 2013     2 of 5

Some Sellers Object to Tophatter PayPal Integration

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Tophatter is a live-auction marketplace that launched in January 2012 and has a small but enthusiastic group of buyers and sellers. These days the site is experiencing growing pains as it launches policies to help it manage disputes between buyers and sellers.

Earlier this year, Tophatter imposed a requirement that sellers use tracking when shipping orders. A European seller said Tophatter's requirement would be too costly for packages sent internationally.

Last week, Tophatter said it was integrating with PayPal and announced a new requirement that users grant it a set of permissions on PayPal.

In the announcement, Tophatter said deeper integration with PayPal "should dramatically improve our customer support so that we can better handle disputes & refunds directly on Tophatter (instead of referring both buyers & sellers to PayPal). In addition, we can also ensure that transactional information is consistent between PayPal & Tophatter." The auction site originally gave sellers until May 1st to review and agree to the permissions but extended the deadline until May 6th.

There was objection from some sellers who did not want to give Tophatter control over whether to refund buyers in the case of a dispute. Some others believed Tophatter would gain access to their PayPal password and would be able to view all transactions and conduct new transactions on their behalf.

Tophatter Chief Operating Officer Andrew Blachman told EcommerceBytes that by granting permissions, sellers would not be giving Tophatter their PayPal passwords, nor would the company be able to view non-TopHatter transactions in a person's PayPal account. He said he didn't know why there was confusion about passwords and said, "We're using a PayPal API, and users are directed to PayPal to grant this permission. They can also revoke these permissions through PayPal if they like."

Tophatter will not be able to access funds in a buyer's PayPal account through the integration, but it will be able to set up a billing relationship with sellers whereby it periodically processes payments for fees owed to Tophatter.

Blachman also said, "We will only process refunds on behalf of a seller if a seller cannot provide proof of tracking for an item not received claim, or if the seller doesn't respond to the dispute resolution process. This exceeds the protections sellers have through PayPal, which also remain in effect (should the buyer go straight to PayPal for a claim for example)."

He said users could revoke permissions at any time. "Any user can revoke access through their PayPal account by choosing Profile > API Access and then choosing Manage API Permissions."

Tophatter published a guide as a result of seller feedback that also explains its dispute resolution process, which covers two primary buyer complaints: items not received and items significantly not as described.

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About the author:

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.


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