New eBay Buyers Who Don’t Pay… Is It Really Their Fault?

Posted on October 14, 2009. Filed under: eBay, Paypal | Tags: , , , , |

 eBay and PayPal, both part of the global portfolio of eBay Inc, are separate companies.  The customer service representatives of those two companies are quick to tell users who call in that eBay and PayPal operate separately especially when they are trying to get the caller to contact the “other” eBay Inc company.  Now, one would think that two separate companies who are part of one global portfolio would be working toward the same goal but that is not true with eBay and Paypal.  

PayPal defines it’s customers as those users who pay the PayPal fees.  PayPal fees are assessed on Business and Personal Premier PayPal accounts.  Personal Paypal holders, unlike Business or Premier account holders, generally pay no fees to PayPal since it is the seller of the merchandise who pays the PayPal fees to process the payment received.  But the PayPal account holder who has a personal PayPal account  is generally only a buyer and not a seller also.  Otherwise, they would have an upgraded (ie Business or Premier) account.

Because PayPal defines its customers as those users who are paying the fees, they provide a toll-free phone number to “paying” customers.  Personal account holders, who are generally only a buyer and not a seller, are not afforded such great service from PayPal.  Now, while that makes sense from a strictly economic standpoint, I suppose, it doesn’t make sense in the overall global portfolio strategy for eBay Inc.  Because PayPal doesn’t earn fees from Personal account holders, PayPal doesn’t provide a toll-free number to those users who are buyers only and when the buyer trying to use PayPal calls in on their own dime, they receive substandard customer service.  Let me give a personal example of this claim.

Over 3 weeks ago I sold some items to a Canadian buyer who was new to eBay.  This new eBay user had zero feedback and had never registered for eBay or PayPal before.  Now, over the past 11+ years I have helped numerous eBay newbies learn the ropes.  I have explained to new PayPal users about the PayPal verification process and what it means to have a confirmed shipping address with PayPal.  This year, however, I have had more new eBay buyers express frustration and disgust than I think I have had in the previous 10 years of selling combined.   

This new Canadian buyer has tried to get his PayPal account verified so that he can use it to pay for his eBay purchase from me.  We have gone back and forth via email and I have attempted to assist him.  Yesterday I asked him to summarize what he has done thusfar and send it to me so that I could take that email and use it to try and get some results for him.

This is the email I received:

Okay, this is what has happened so far…
I signed up for Paypal and it said to wait for a 4 digit confirmation number on my next Visa statement.  Well, I got my statement but with no 4 digit confirmation code so I am thinking that it will show up on my next statement which will not be in until the last week of this month when it usually comes in.
I thought that I would bypass the whole Visa thing and “add” a bank account.  This didn’t work for me either as the name on the account that I tried to add was not even my own name (this showed up and “John” just before you are supposed to press the ‘add’ button).  So, because the name was different and I was not able to “Edit” my information to change the name – there wasn’t even a place to edit and put my correct name – I cancelled the whole adding process. 
Then, I called Paypal customer service and the lady on the line was not helpful.   Apparently, there is a glitch on their “add a bank account” page and the name “John” is supposed to be ignored and I was just supposed to knowingly click the “Add” button.  So, the lady then went through the process of adding a bank account onto my Paypal account (which was ridiculous because that was what I was doing!). 
Also, there is no 1-800 number for Paypal so she made me do this while on the phone.  Then, while still on the phone, she kept asking me to check my online banking to see if the “two small deposit amounts” were deposited into my bank account – these two small deposits are used to confirm my bank account with Paypal.  Well, after waiting and refreshing my banking information online for about 7 minutes, there was still no indication that anything was deposited into my account at all.  She kept reassuring me that it would only take a few minutes for the amounts to show up in my account.  I had remind her that I was calling from BC, Canada and that the clock was ticking and that it was getting to be an expensive phone call.  I asked if it was okay if I hung up and called back when I saw the deposits in my account…
Well, I am still waiting for the amounts to show up in my online banking account. I have just called my bank and THEY said that it usually takes about 3-5 days for the deposits to show up.  Can you imagine if I stayed on the line with the customer service lady?   I spoke with her on Thursday last week. 
That is my Paypal experience.   It is too bad because I have looked long and hard for these [items].  They were put out by [the manufacturer] in 2005, but I haven’t been able to find them anywhere – not even on the [manufacturer’s]  website or any other specialty store – or maybe I haven’t looked hard enough.  
I have never bought anything off of ebay so I am not familiar with their policies yet.
What do you suggest I do?
Thanks for listening and hearing me out (a long winded email, but I am a bit frustrated and I feel sorry that you have had to wait this long) I just don’t understand why the customer service lady just couldn’t take my Visa information from me while I was on the phone, therefore, bypassing the whole 4-digit confirmation code.   I also was not sure why I couldn’t get the spending limit that it seems that people get (up to a maximum of $3,700) prior to confirming their accounts. 
When I signed up, I had no money in my Paypal account. Is that normal?   And how long does it usually take to confirm a Visa account or a bank account that has been added?  Very frustrating. 


 To review and summarize:


1. Here we have a new PayPal user who is trying to pay for items they bought on eBay where they are also a new user.  Already, this buyer is having to struggle with two new systems in order to purchase some items.  This buyer really wants these items that he can’t find elsewhere so he was very determined to go through the process for setting up both an eBay and PayPal account.  What about a new eBay and PayPal user who can easily find the same product elsewhere… would they be as motivated?  It is the unique items sold on eBay that often bring in NEW buyers because it is these folks who are the most motivated to spend the time necessary to sign up for the new eBay and PayPal accounts.  For most people, it is simply not worth the trouble of figuring out the eBay and PayPal system to purchase common items they can obtain elsewhere, even if the item is offered at a better price on eBay. 


2. This new user has tried diligently to pay for the items he purchased from me on eBay.  Along the way, he experienced technical problems trying to get his bank account verified that were no fault of his own.  I confirmed that the technical problem he described with the name “John” popping up in the process is indeed a known problem.  Imagine how little trust this new user has in the PayPal system if somebody else’s information comes up on his secure screen when he is trying to input his banking information.  Buyer’s lack of “trust” when purchasing on eBay is partly due to their lack of trust of the eBay system and the PayPal system but eBay Inc. only puts the trust issue blame on the sellers’ shoulders.  Creating divisive seller groups with the new Top Seller program isn’t going to solve the “trust issue” on eBay especially as long as potential buyers still don’t trust the eBay marketplace and the PayPal payment system.


3. Because this new PayPal user is a “buyer only”, he had to call long-distance on his own dime because PayPal had a technical problem.  And this PayPal user called long-distance only to receive substandard customer service.  The PayPal customer service agent should have known that the small deposits would not show up right away in the caller’s online bank account.  It is painfully obvious that the PayPal customer service agent was poorly trained and lacked even the basic reading skills to look up the information in the PayPal manuals.  eBay Inc. has been downgrading the level of customer service they are providing but the cost savings from having poorer quality and less expensive customer service will lead to lower sales for eBay sellers and, thus, lower revenue for the eBay marketplace.


4. eBay community members have always been the ones to help new users.  Sellers such as myself have helped thousands of new eBay buyers learn the ropes.  Does anyone think for a minute that an eBay Diamond Powerseller is going to take the time to try and help a new eBay buyer who is experiencing problems?  The past few years eBay has significantly increased the fees for small sellers and have put so many stumbling blocks in our way that there really is not time anymore for us to help all the new buyers who are asking for our assistance.  Every week I simply direct eBay newbies to eBay for help and I know that 99% of them fall through the cracks.  I just took pity on this poor newbie because he was so very kind and apologetic and, well honestly, I just felt really bad for him and he caught me in the right moment.  When I was making really good money on eBay years ago, I could afford to give of my time to help new eBay buyers learn the system.  eBay has squeezed so much money from me with their fee increases and made selling on eBay such a time-consuming process that I simply cannot afford the time to educate new buyers like I have done in the past.  And it is painfully obvious that eBay and PayPal are not going to step up to the plate and make their registration processes and buying / payment processes easy to understand.  And eBay Inc. is actually cutting the budget for customer service agents so there is no one left who is knowledgeable who can and will help new eBay buyers.

So, how do I plan on solving this problem for my customer?  Because, let’s face it, this is MY customer.  Right now this buyer trusts me and he believes in me and is completely disgusted with eBay and PayPal.  What is so ironic is that eBay spends an enormous amount of time and energy preventing sellers like me from “encouraging” off-eBay sales.  There are long lists of things that sellers cannot do because eBay doesn’t want to lose “their” buyers to us sellers.  I have a little newsflash, though.  The buyers who come to eBay do so because there are sellers on the platform offering something that the buyer wants.  Most buyers don’t wake up in the morning and say “I think I’ll visit eBay today and see what I might like to buy”. 

And lest you think that this buyer in my article is unique, I assure you that he is not.  I have another email received yesterday from a buyer who is so angry and confused that she swears she will never use PayPal again.  She even called and left a voicemail message for me over the weekend because she is so confused about PayPal and is getting nowhere with them.  And for every email and phone call that I receive from buyers who communicate with me to tell me about the problems they are having and why they can’t pay, I’m sure there are half a dozen more eBay buyers who simply give up and just walk away without even bothering to send me an email.

The new eBay members who do come to the eBay site determined to buy the unique items I am offering… well, they’ll open a dialogue with me (the seller) when eBay and Paypal drop the ball.  And, at that point, it doesn’t take much effort to turn a buyer who finds my item on eBay into a buyer who will purchase from me directly on my own website.  Because, at this point, if I have to spend my time educating a new buyer about how to buy online then I might as well spend my time teaching them how to purchase from me where it is the most advantageous for me.  And that definitely isn’t on eBay. 

As I have recommended so many times, perhaps eBay should spend less time putting up the barbed wire fences around the platform to keep sellers from leaving with the buyers.  Instead, eBay should spend more time making the eBay venue a better place for sellers so that sellers simply have less desire to take the buyers elsewhere.  Just a thought.

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5 Responses to “New eBay Buyers Who Don’t Pay… Is It Really Their Fault?”

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Seems like a good argument for having a merchant account.

Magisterrex, actually we do have a merchant account but we choose not to offer it to our eBay customers anymore.

When you offer to take credit cards on eBay, you have to make that same offer to ALL eBay buyers. We did that previously and suffered over a $3,000 loss because of fraudulent activity on the credit card.

The ONLY trouble we have EVER had with credit cards was on eBay. Never any trouble on our website where we can choose to cancel the transaction if it is too risky. We don’t have that “luxury” with eBay. Therefore, we use PayPal only on eBay.

Good essay, Brews.

Back in the day, I held buyers hands all the time to make sales. And it worked…

Now, I deliberately block all buyers who do not have a Paypal account AND I require immediate payment.

Do I lose tons of business? Yes. Probably at least 18% based on my year over year numbers. But as you wrote, with ebay’s take rate so high now, I can longer quantify the customer service.

I honestly think we will see ebay requiring immediate payment in the future just like Amazon. That’s what my spies tell me anyway…


That customer I would have told to send an International Postal Money Order it is a lot easier for them and it saves a lot of time. If eBay can’t make it simple for the buyer then what are we supposed to do?
It is already bad enough that the site is incredibly slow to load but then to sit and waste our time trying to help these people it is not feasible any more. If they really want the item they will send a Postal Money Order.
Too many newbies get on and think they can buy all they want to buy but PayPal puts a restriction on their spending. PayPal hates people that pay with a credit card because they loose too much compared to doing an ACH for a LOT less change.
About 1/3rd of our customers use our merchant account, 15% use a money order and I would say that more than half use a credit card with PayPal. PayPal will give personal account people with a credit card a hassle all of the time. It was not that way back in ’01 or so when eBay took over PayPal. Everything was all smiles and joy. Half of our customers were paying with cash or a money order.

As had been said before, greed is what is killing eBay and after 10+ years we are looking to greener pastures instead of the pile of manure that eBay has become.


[…] the item(s) and then “pay for” the item(s).  Many first time buyers experience trouble getting Paypal to work at all.  And inexperienced eBay shoppers often try to circumvent the PayPal system because it is […]

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