eBay Moves Closer To Forcing Users To Use PayPal

from the it's-good-to-be-the-king dept

Wed, Sep 24th 2008 6:09am — Mike Masnick

You may recall earlier this year that eBay experimented with requiring customers to use eBay-owned PayPal for payments on eBay auctions down in Australia. However, public backlash, combined with government threats convinced eBay to hold off for the time being. However, folks over at Slashdot are noting that eBay has now changed its terms of service in the US to push more people towards using PayPal. Specifically it's no longer allowing checks or money orders for payments on most items, saying that electronic payments, merchant accounts or direct payment for in-person exchanges are the only options. However, as the Slashdot post notes, in the electronic payment space, eBay then blatantly says it will not allow Google or Amazon's payment programs to operate on eBay because they compete with eBay.

While eBay may be allowed to do this, it definitely seems like a good way to shoot itself in the foot. If customers don't want to use PayPal, they're simply going to bypass eBay entirely, and use an alternative. That not only cuts eBay out of the transaction, but also the listing fee. eBay tries to position this as being about making the experience better for both buyers and sellers, but that's clearly untrue. Instead, it seems like eBay is afraid to compete on the merits with its payment solution, knowing that many, many users are increasingly fed up with PayPal. Yet, rather than fix PayPal, the company's response is to ban the competition.

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Filed Under: competition, electronic payments, paypal
Companies: ebay, paypal

38 Comments

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Improbus, 24 Sep 2008 @ 6:30am

Alternatives
Ok people, give me some alternatives. I have NO love for eBay and especially not for PayPal.
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Fungo Knubb, 24 Sep 2008 @ 6:32am

eBay's Swan Song
A while back, eBay banned any negative feedback for buyers, even though some certainly deserve it, thus making their feedback system totally worthless. Now they want to force folks to use PayPal, which will drive a bunch of sellers to other auction venues, me included.

I'll be the one to decide which form of payment I'll accept, NOT eBay. Bu-bye eBay - It was pretty nice while it lasted, but like all good things, it will eventually get screwed up and trashed.
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hegemon13, 24 Sep 2008 @ 6:59am

Re: eBay's Swan Song
I don't know what the answer is, but their feedback system was already worthless. The retaliation by sellers for negative feedback had a chilling effect that allowed exploitative sellers to operate for far too long.

I once bought a AMD processor from an ebay store. It was supposedly brand new in the box. It came rubber-banded between two pieces of cardboard, had thermal paste residue on the top, and had two bent pins. I got my money back through Paypal, but when I complained to the seller, he sent a vicious, profanity-laden email calling me a liar and threatening negative feedback and a non-paying bidder report if I "lied" and left negative feedback for him. So, in the interest of protecting my own ability to buy and sell on ebay, I left no feedback at all.

Effectively, what the new rules do is make the system useful for buyers to learn about sellers, but not useful in the other direction. I guess that's better than useless for both sides. Also, if a buyer has positive feedback, it means that someone was impressed enough that they took the time to leave it, so it has limited use.
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koresho, 24 Sep 2008 @ 7:02am

Craigslist
Craigslist is far better anyway. After getting almost scammed 3 times through eBay (thankfully I stuck to my guns) and not finding what I want to buy, I turned to Craigslist. My experience with that service has been buying a Blackberry, buying a motorcycle, and selling a computer and car. Both buying times I found what I needed after minutes of looking, on quick email, and I had arranged a meet with the seller.
As for selling, I got phone calls within a couple hours of listing both items.
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BinaryWorld, 24 Sep 2008 @ 7:05am

eBay Has Lost 'it'
There is no 'moving closer' about it. They have pretty much required all sellers to accept only PayPal (even for local pickup items) plus they won't allow sellers to specify what type of electronic payments (via PayPal of course) to accept. So not only do sellers have to pay the eBay listing fees, but they also have to pay any PayPal fees when a buyer wants to pay with a credit card rather than a debit card.

eBay is not what it once was. It has completely lost touch with users and no longer provides the type of service people expect.
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BinaryWorld, 24 Sep 2008 @ 7:06am

Re: Alternatives
Craigslist.
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hegemon13, 24 Sep 2008 @ 7:08am

The modern ebay is worthless
Ebay used to be a great place for individuals to buy and sell items. It was the place where you could find anything, and usually get a good deal. Sellers were primarily individuals, and bidding was frenzied (and addictive). Unfortunately, it has now been overtaken buy eBay Stores and Buy-it-now auctions, and the whole sense of community is gone. It feels the same as when a local market gets replaced by Wal-Mart. Everything that made eBay unique and attractive is fading away.
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Avatar28, 24 Sep 2008 @ 7:10am

illegal tying?
Would this not fall under the category of illegal tying; using a monopoly in one area (online auctions)to force use of another product or service?
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Avatar28, 24 Sep 2008 @ 7:21am

double dipping
Another point. Not only do they pretty much require use of PayPal they also basically require you to have a business account. So not only do you pay the listing fee and final value fees you now ALSO have to pay a few more percentage points to PayPal for ANY transaction, credit card or otherwise.

I have a few items I was wanting to sell on there but I refuse to go through all that and upgrade to a business paypal account for just a few items. So I will either just give the things away, sell them in a yard sale or otherwise dispose of them. *shrug*
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Mr. Magoo, 24 Sep 2008 @ 8:09am

People are really mad about this - go read some of the comments on ebay's Paypal forum: ( http://forums.ebay.com/db2/forum.jspa?forumID=97).

Paypal almost always sides with the buyer when disputes arise, especially if a seller doesn't go exactly by Paypal's onerous terms of service. They have also recently enacted additional 'buyer protections' such as holding money for 21 days on certain transactions.

eBay is also going to allow payments to a seller's own merchant account, but no small seller has one of those, and they will allow payments through a competing service, Propay, but Propay's fees are even more than Paypal's.

eBay's excuse for doing this is that they have seen too many transactions gone bad with paper payments, but they ignore all the bad experiences people of had with Paypal over the years.
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James, 24 Sep 2008 @ 8:13am

Irrelevant
Pfft who cares.. Ebay became irrelevant a long, long time ago when they went from trying to be a flea market/garage sale listing board where joe and jane schmoe would just sell things they are trying to get rid of, or didn't need, to offering "online stores" for items most people don't want.

Why would I buy from some online purveyor who could be ANYBODY when I can buy from another site that has a name, reputation and a customer base to protect vs. just putting some crap up on Ebay and paying a few listing fees?

Craigslist is much better.
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Mandocello Pumpkins, 24 Sep 2008 @ 8:23am

PayPal is such a rotten scam
They've screwed around with this service for so long. It's a broken system. The automatic opening page with the ad for their credit cards is soooo annoying. Their huge fees are insulting and off-putting.

To hell with them.
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kelly, 24 Sep 2008 @ 8:24am

Ebay/Craigslist
I would still rather use Ebay over Craigslist for smaller items, as it gets more exposure. Craislist gets me nothing but scammers all the time, and you have to weed through thos to get to a real person, given it is a free service. At least with EBAY and PAYPAL you are dealing with a service on the other end that if it all goes sour on the other end you have the ability to recoup your moneies easier, as I had to in the past. As to feedback, they have finally stopped allowing sellers to leave any negative feedback for buyers, about time! I had that same issue, got an item from someone, was broken on arrival, they refused to work with me, I posted a negative feedback and they kicked back the same, which lowered my rating.
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Fungo Knubb, 24 Sep 2008 @ 8:32am

RE: Irrelevant
As folks discover new buying/selling/auction venues, due to eBay's/PayPal's ham-fisted tactics, I predict that eBay will either go belly up, or change their tune back to what made eBay desirable in the first place. The problem with eBay returning to what made them desirable in the first place is that most folks won't believe it. ... fool me once shame on you, fool me twice shame on me.

Like most winning formulas, those in charge just can't seem to leave it alone. It will eventually swirl around the toilet of history, and eventually become so irrelevant that it will disappear.

So long, eBay ... it was good while it lasted.
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Balthazar, 24 Sep 2008 @ 8:34am

Re:
eBay simply lies or distorts the truth so that it matches their plans. eBay has no idea how many transactions went bad with paper payments, because they're not part of the paper payment process. Any statement made by eBay regarding paper payments is completely bogus.

Clearly, the only REAL reason for this change is to put more money in the eBay/Paypal coffers. This is quite simply about GREED.
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Duane, 24 Sep 2008 @ 8:41am

I'm with that guy
I'd like to know some other place to buy stuff. I go to eBay for stuff like cheap data cables for my cell phone or cheap cell phones to replace the ones I unsuccessfully modded. Or cheap Chinese knock-offs of things, like my 2 GB "Shiffle."

I'm not a big fan of eBay, but so far it's been pretty convenient to just pop in, sort by Buy It Now, and get what I need. I'm always happy to avoid folks who are obviously losing site of the customer, but I have to have some place to get my cheap crap too.
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John V, 24 Sep 2008 @ 9:03am

Re: The modern ebay is worthless
I agree - it used to be fun looking for stuff on Ebay..... now it's just another on line store with the "Buy it Now" clause.... No thanks.... I stick with Amazon and Craiglist
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Shawn, 24 Sep 2008 @ 9:29am

Ebay/Paypal
I have been using Ioffer.com for a couple of years. They are pretty good and I do a nice business there. They also help transfer all your stuff from Ebay to their site. The staff is pretty good about getting back to you with answers/help. They also seem to be making smart changes to their site. You also get a store for FREE.

I also have started using a new site some. Its called neolock.com. It is small and was started by former Ebayers who were fed up with all the Ebay BS. There are several more sites like this that were started by former Ebayers to give people more options. If we all start using them instead of Ebay, then either Ebay will get a clue or become obsolete.
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Tony, 24 Sep 2008 @ 9:47am

Re: Alternatives
Building an auction site like eBay is relatively easy (I've done it - as have many others). Marketing it so that it can be a viable alternative to eBay is another matter entirely.

The biggest problem is - until you reach a certain threshold of users, the service is pretty much worthless, and it's hard to get that many users if you don't have any users to begin with...
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Justin, 24 Sep 2008 @ 10:20am

Amazon
Amazon, doesn't use paypal. Most places will at least accept it, they lost my business because I couldn't pay with paypal. I can see the same happening to ebay.
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Steve R. (profile), 24 Sep 2008 @ 10:35am

What is Ebay Evolving Into?
The original intent with Ebay was simply to connect a buyer and seller. Under this limited model, how the buyer and seller interacted would be considered irrelevant.

With the introduction of new services such as PayPal and the current change in the terms of service to require the use of PayPal, Ebay is becoming a type of "middle man". In a sense they are now defining how the buyer and seller are to conduct their business in a manner that allows Ebay to exact "toll-both" style revenues.

I stopped using Ebay several years ago. PayPal sucks. Though I use Amazon.com, I am nervous since they have "adopted" some of Ebay's onerous strategies to generate greater revenues. I would like to see Amazon.com return to its more "pure" original state.
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Juan Y., 24 Sep 2008 @ 11:06am

Their loss
I have not bought from e-bay after a short but significant list of mishaps with sellers...I guess this does it, I'm gonna turn to other websites and leave e-bay for good.

Thanks for the advice, I may try my hand at Craiglist

Cool beans...
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Danny Brown, 24 Sep 2008 @ 3:33pm

Umm... eBay IS Craigslist
While I agree with everyone's sentiments here regarding eBay's hardhead approach to this, if it's a protest against eBay that people wish to do, then going to Craigslist isn't the answer. Considering that eBay owns 25% of Craigslist...
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DarkEula, 25 Sep 2008 @ 10:05am

Isn't that anti-competitive tying.
Isn't that tying the purchase of one good to the purchase of another? It doesn't just seem hardheaded. It seems illegal.
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Steve R. (profile), 25 Sep 2008 @ 12:07pm

A scary Concept
Over at MarketWatch "Can Meg Whitman turn around California? Commentary: Former eBay CEO shows signs of interest in governor's chair".

The first order of business if elected? Everyone in California or doing business in California will be forced to use PayPal.
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grinningevild, 25 Sep 2008 @ 4:51pm

something in between
I totally agree with the idea that e-bay has lost it's roots - no longer individual sellers, but now more catering to whole-sellers, is has become just another big store. Unfortunately, craigslist is just too much anarchy. I almost wish there was at least a small fee to post on craigslist just to weed out some of the spam and crap there. And then I'm limited to local transactions just because I wouldn't trust anyone on craigslist to mail me anything. With the gas prices as they are, really sucks to drive across town to find something isn't as advertised as well. I'd really like something with a little more regulation than craigslist, but little less than e-bay and hopefully less mass sellers as well.
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Erv Server, 26 Sep 2008 @ 5:52am

I love Ebay and I love Paypal. Yes there are some things about them both I do not like. Not a perfect world
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Brandon Crotts, 26 Sep 2008 @ 4:06pm

ProPay
My name is Brandon Crotts, the product manager at ProPay. I think everyone is forgetting that Paypal isn't the only payment option; there's ProPay. We are really excited about being selected as another payment option and we hope that we will be a highlight in the changes that eBay has been making. For more information, check us out at ProPay.com.
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ColoradoJimH, 10 Oct 2008 @ 11:48am

Solid Invalid Tickets
Stubhub sold me invalid tickets belonging, to James Manfredonia of NYC, to the September 18th Yankees game. I have asked several times for an answer: Did they or the owner of the tickets commit fraud? I am still waiting for their reply, despite several requests for an answer. Oh - they did send me a $200 credit. The cost of my trip exceeded $4k. I do plan to submit a complaint to the NY Attorney General's office. I hope this will work; I have my doubts. I see StubHub (an EBAY Co) donated to the AG's political campaign fund. I am open to joining a class action, if others want to do the same.
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NYM Arts, 19 Oct 2008 @ 6:54am

CALLING ALL EBAYERS > NEW HOME HERE>
Okay Folks Here It is. The math has been Done. This is what we Need to do if we are to, Once Again, become Prosperous.

From Chris Fain President, CEO OnlineAuction.com, OLA.com October 18, 2008 :

"Lets roll....Tell everyone to head to OLA.com and become Founding Members this should drive enough traffic our way and build up enough revenue for us to have a substantial advertising budget. For instance if everyone kicks in their $196.00 and we have One Million Founding Members I will spend no less than (90%) $176,400,000 dollars promoting all OLA Members products ! ...Tell everyone on the boards to get over here!!!....Lets do it."

This is NOT a generic statement. It is a Direct Communication to me from Chris.

This refers to the All Important TELEVISION Advertising.
Email EVERYONE who Ever Sold on Ebay and is Looking for a Brand Shiny New Home !
Email EVERYONE looking to Turn Back the Clock to the "Good Ole Days" of Auction FUN ! ! !
Remember : THE ACTION FOLLOWS US
LET'S BRING IT !

OLA > No Hassles, No Rediculous Fees, No Big Brother Crap.
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Martin Fox, 21 Oct 2008 @ 10:45am

Re: Ebay & Paypal.The two most fraud ridden entities on the net!
Just a few facts regarding what used to be an on-line auction site called eBay. We are 9+ year vets on eBay and have watched with interest and disgust as eBay rapidly sinks into the abyss.

1.Ebay has the worst CS system in the world.
2.Paypal has the 2nd.worst CS in the world.
3.Paypal is ridden with fraud, every minute and eBay does nothing to address it.
4.Ebay ditto.
5.Paypal is a bona fide criminal entity.Thats why there are at least 3 if not more HUGE websites devoted to exposing Paypal.
6.Ebay currently violates at least 3 anti trust laws.
8.Paypal ditto, maybe more.
9.Members lose ALL of their credit card consumer rights when they join Paypal.
10.When eBay fees coupled with Paypal fees exceed 15%,( which is coming )sellers may as well use brick & mortar auction companies again. At least they, unlike eBay will be real auction companies.

All true,all on the record tis a sad situation indeed...
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murgalJime, 23 Oct 2008 @ 12:40pm

propay is NOT an option!!!!
What happen to Brandon Crotts deceitful LINE, "I think everyone is forgetting that Paypal isn't the only payment option"???

Propay is ONLY available to higher level powersellers!!!

FORCED Paypal IS the only optin ebay is giving the majority of selles, no matter how they try to spin their twisted, ugly ebay web!

Search the internet for "Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO", the only REAL answer to ebay's problems.
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oltexgal, 2 Nov 2008 @ 7:29pm

Re: Re: Ebay & Paypal.The two most fraud ridden entities on the net!
I, too, am an eBay vet.... been at it for over 10 years. Over the past year the changes in eBay have been astonishing... starting with the gutting of feedback. Golly! At that time, I'd left over 11,000 feedbacks, only 5 of which were negative.. richly deserved, and necessary to warn others. Then the fee hikes, forced PayPal payments, and the heavy handed push for fixed price listings with free shipping.

It's become despotic under "Dunnowho" took over. He's adopted policies that interfere with small private business which flourished in the early days. It was a grand adventure for both sellers and buyers. Now, it's like living in some totalitarian, third world, country, with what amounts to staggering taxation. Most of us operate on razor thin margins. It has to be illegal to specify what method of payment a private business can accept. A commercial landlord can specify how the rent can be paid, but has no voice into the transactions of the tenants business. eBay fees amount to rent for use of the platform, no more. I should be able to accept a pound of chocolate for an item, as long as I pay the appropriate fee, and am square with the IRS.

Seems like there should be some racketeering violation. Who oversees eBay? the FTC? As to PayPal... It is functioning pretty much as a bank, with no FDIC membership. I read that the Australian government backed eBay down, when they tried to impose PayPal only payment. I hate government intervention, but this screams for regulation.

Ebay stock has been trending down, and has pretty much fallen out of bed. The sell throughs according to medved, http://www.medved.net/cgi-bin/cal.exe?SIND, have been flat for the year, with the much ballyhooed BIN's tanking, and regular sales up a bit. Why are the eBay stockholders not screaming for Dumbahew's head? Until there is change at the top, or successful lawsuit, there will be no improvement.

I continue to sell on eBay, because that's where my customers are, but there is no joy... it's become a grim struggle.
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DAVES DONE WITH PAYPAL, 1 Mar 2009 @ 5:35am

EBAY FORCES USE OF PAYPAL
I JUST LOVE WATCHING THE DEATH OF EBAY. I'VE BEEN SELLING AND BUYING ON EBAY SINCE 2002. I'VE SOLD ABOUT 1200 ITEMS AND BOUGHT TWICE THAT. WHEN I STARTED AS A SELLER I HAD OPTIONS OF BEING PAID WHICH INCLUDED WESTERN UNION, MONEY ORDERS, CASH, PERSONAL CHEQUES, BIDPAY AND PAYPAL. NOTHING GOT SHIPPED UNTIL I HAD THE MONEY. WORKED GREAT FOR BOTH PARTIES.

OVER A YEAR AGO I STARTED NOTICING EBAY BEGINNING TO STRONG ARM ITS WAY WITH SELLERS WITH PAYMENT OPTIONS. THEN I SAWS EBAY BUYING PAYPAL AND PUSHING IT UP FRONT AS A PAYMENT OPTION. NOW ITS THE ONLY METHOD USED BY EBAY.

THE LAST STRAW FOR ME WAS WHEN I SOLD A $400. ANTIQUE CLOCK TO A GUY IN AUSTRALIA. HE PAID WITH PAYPAL. IT TOOK OVER 7 WEEKS FOR DELIVERY, USING CANADA POST EXPIDITED WITH A TRACKING NUMBER. AFTER 2 WEEKS FROM THE SALE, THE BUYER FILED A NON DELIVERY COMPLAINT WITH PAYPAL, AND THE FUNDS WERE HELD, THEN RETURNED TO THE BUYER. I CONTACTED CANADA POST AND THE AUSTRALIAN POSTAL SERVICE AND TRACKED THE DELIVERY RIGHT TO THE GUYS HOUSE. THE BUYER EVEN ADMITTING GETTING THE CLOCK DELIVERED. DOCUMENTS WERE FAXED TO PAYPAL, PHONE CALLS MADE, PAYPAL "INVESIGATED" THE MATTER.
NOTHING!. THE GUY GOT THE CLOCK, GOT HIS MONEY BACK, AND I GOT NOTHING BUT MY PAYPAL ACCOUNT FROZEN, CALLS FROM A COLLECTION AGENCY AND ONE BIG HEADACHE.

WATCHING EBAY NOW, AND IT'S PAYPAL RULES IS THE ONLY PAYBACK I HAVE. GREED, POOR MANAGEMENT, LOUSY PUBLIC RELATIONS, AND A WONDERFUL ABILITY TO DRIVE IT'S SELF NOSE-FIRST INTO THE GROUND, IS MY PAYBACK.

OH WAIT, THATS LIKE A LOT OF OTHER U.S. BASED COMPANIES IN THE NEWS THESE DAYS.

NEXT, A BAILOUT CRY FROM EBAY, BECAUSE WE WOULND'T WANT THESE IDIOT OWNERS AND MORONIC STAFF TO LOSE THEIR JOBS?

GIVE ME A BREAK.
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Alan Searchwell, 11 Jun 2009 @ 10:43am

Ebay's strong arm tactics
I like to pay for my auctions with cashier's checks. Safe for the seller, safe for me since the other party to the transaction won't even know where my account is but there's still a paper trail. I use feedback to asses the sellers and trust my instincts. I've not had a bad experience yet. I have noticed that it is increasingly hard to find sellers that take anything other than paypal. I hope a worthy competitor to ebay steps up to the plate soon. Google.... anybody?
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Henrietta Red Ink Diary, 12 Jun 2009 @ 3:36pm

Re: Re: eBay's Swan Song
"if a buyer has positive feedback, it means that someone was impressed enough that they took the time to leave it"

No, the seller left the meaningless feedback because if they did not the buyer would not only neg them but probably savage their DSRs which would result in account limitation, loss of all fee discounts, demotion in search (eBay's term) and all sorts of other lovely consequences.

Alternatives? In auction field none. Fixed price eCrater, Bonanzle.

Alternative payment processors, Google Checkout if you are in the USA. All the others are run on the predeposit system like MoneyBookers and RME.
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Henrietta Red Ink Diary, 12 Jun 2009 @ 3:41pm

Re: illegal tying?
Yes it does, are you going to pony up the thousands it would cost to fight it in court?

However the more folk complain vigorously to their elected representatives and the FTC the better chance somebody might start enforcing the statute.

A primer including links found at http://200westmain.com/redinkdiary/?p=180
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Jon, 2 Feb 2010 @ 6:30am

Fed up with Ebay
I am also fed up of using both ebay and paypal, I do not like the way they work! They both give me the creeps, it is very hard to get in touch with them when things go wrong! I do have things I want to sell from time to time, so I have simply put my own website up. I will simply advertise my things there instead!
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