eBay.com.au Payment Policy Questioned

PayPal-only requirement outrages Australian sellers.

by Auctiva.com staff writer
- Apr 28, 2008

Australia's fair trade agency is looking at whether eBay went too far by requiring all items be paid for using either PayPal, which eBay owns, or cash in-person.

The controversial policy is slated to take effect June 17. An earlier mandate that all sellers at least offer PayPal as an option becomes effective May 21.

eBay—which acquired PayPal in 2002—claims the vast majority of its members already use the electronic payment service and says PayPal is more secure than direct deposits, personal checks or money orders. However, critics claim restricting transactions to PayPal amounts to restraint of trade.

The new policy deals another blow to many online sellers who were already outraged over recent changes to eBay's feedback system, prohibiting sellers from leaving negative or neutral reviews for buyers.

But it's not the first time eBay has moved to limit payment options within its global e-commerce venue. A number of recent policy changes affect the way members can pay for goods—changes eBay says are aimed at reducing the incidence of fraud.

In 2006, eBay famously banned the use of Google Checkout, claiming the service was not proven to be safe.

Last year eBay began requiring all new sellers in the U.S. to offer PayPal as an option. As of March 17, the policy was expanded to sellers with fewer than 100 feedback points; greater than 5 percent customer dissatisfaction; or those listing items in categories that have higher rates of buyer complaints, such as gift certificates, video games, cell phones, computers and consumer electronics.

Similar restrictions are in place in the U.K. As of March 25, sellers must offer PayPal as an option if they have fewer than 100 feedback points, regardless of what percent is positive. Also, anyone selling items in certain high-risk categories (e.g., health and beauty, consumer electronics, jewelry, etc.) must offer PayPal as an option. The rule will expand to all sellers—regardless of status or category—starting May 1.

eBay earlier instituted a PayPal-only rule for U.K. sellers of specific items, including video game consoles, MP3 players, software, cell phone lots and industrial supplies.

The PayPal-only policy in Australia is the most far-reaching to date. eBay has asked Australia's Competition and Consumer Commission (ACCC) for immunity from the Trade Practices Act, citing increased security and buyer satisfaction within its e-commerce community.

The ACCC has posted eBay's notification of exclusive dealing and a call for submissions on its public registers. The deadline to submit a complaint is Friday, May 2.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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