As we write this in mid April 2008, eBay UK have started to implement a new PayPal policy.
Almost all sellers are now forced to accept PayPal to list almost anything in almost any category.
We think it's unfair to force one payment method and system onto all sellers, whether they wish to accept it or not.
We believe it may be illegal under UK or EU competition law. If it isn't, it should be.
Judging by the thousands of postings by ripped-off and dissatisfied eBay members, both buyers and sellers, PayPal is not safe.
The State of New York certainly don't think it's safe. In 2004, we noticed:
Department of Law 120 Broadway New York, NY 10271 Department of Law The State Capitol Albany, NY 12224
For More Information: 518-473-5525 For Immediate Release March 8, 2004
PAYPAL TO CLARIFY DISCLOSURES RELATED TO RIGHTS FOR UNDELIVERED GOODS"
We doubt whether anything has changed.
One major problem is that the crooks know all the scams and loopholes, so innocent buyers and sellers lose out almost every time.
eBay state that the reason for the change is that buyers are happier:-
Buyers have told us that they prefer to use PayPal to pay for their eBay purchases. Not only does it offer instant payment, but it offers free protection up to £500. Statistically, we’ve seen that PayPal transactions result in significantly lower rates of fraud and other bad buyer experiences. This keeps buyers coming back to eBay and ensures better sales for our sellers.
In August 2007 we started to require sellers listing in several specific categories to offer PayPal as a payment option, whilst in other categories we made it the only payment method allowed (see announcement). As a result, we’ve seen a significant fall in the rate of fraud and other bad experiences in these categories.
Why do eBay announcements always remind me of Big Brother from George Orwell's 1984?
In actual fact, we strongly believe the truth is purely that eBay will make more money.
Now, when we attempt to relist our item:
2008 Spink Coins of England Standard Catalogue - Colour
at our usual starting price of £0.99, we are told:
"To list this item, you need to accept PayPal as a payment method."
Cost / Benefit Analysis
This item often sells for about £20 against a retail price of £25. We don't like to discount it openly for a number of reasons, including annoying the publisher, although naturally we have no price maintenance agreement with them.
We also probably subsidise the postage at £3 in the UK, let alone our labour cost in packing, and doing all the other administration in processing each order, which we reckon costs us about £2 per order.
At £20, the current eBay selling fees are about £1.75, and at £25, they would be over £2 per sale.
Accepting PayPal would push up these costs by as much as another £1.25 which we feel us unacceptable. eBay (who own PayPal) would make over £3 on each book.
The books cost us £12.50 each buying 100 per time, plus shipping costs. If we get left with any at the end of the year, we lose money on them.
Sometimes they only sell for £15, or less, so we lose money on those as well.
On a goodish day, we probably made £2 to £3 on each sale. Under the new scheme, we would make only about half of this, but eBay would make £3, £4, or more.
We wish to say sorry to all those customers who would have been able to buy this excellent book from us, but we we do not intend to continue offering via eBay in future.
Similar considerations apply to many more of the items we have been offering, mainly via our "Shop Inventory" items.
At one time, we used to run over 250 listings, we recently ran it down to under 100. From May, it will be down to a token presence of 1 or 2 items only.
It may be wishful thinking on our part, or perhaps vanity, but we hope at least a few eBay members might miss our offerings.
Don't worry too much, we will still maintain a permanent presence on eBay.
One any single day, we can usually identify at least 15 eBay listings where sellers are using our high quality copyright images of Krugerrand, sovereigns, gold proof coins, pound coins, and other items, mainly coins, to sell their own coin in competition with us. Some days, there are many more than 15. On one record day, we reported over 100 items infringing our copyright, and eBay removed them, although sometimes they are very slow, and fail to respond at all.
Is PayPal Good for Buyers?
While we are sure there are many buyers who prefer to pay using PayPal, these are presumably the lucky ones who have not yet been the victim of a scam. What these buyers may not have realised is that PayPal is deeply unpopular with many sellers for a number of reasons, and forcing it on sellers will inevitably mean many of the best, and most competitive sellers will either increase their prices, or leave eBay, in which case it will not benefit the majority of buyers either. Choice is usually a good thing, dictatorship is usually bad.
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About the Author
Lawrence Chard is a director of Chard Coins of Blackpool, England, and has over 42 years experience in numismatic and bullion coins.
Chard have maintained a dealing service for both collectors and investors in bullion and numismatic coins. During the period from 1965 to 1971, we were one of only a small number of dealers who were granted a dealers licence.
All our images and text are copyright.