Separated Paypal and eBay: What it Means to Sellers

Paypal announced (7/20/2015) that it has completed its separation from eBay after 13 years. While Paypal and its employees are all happy in the NASDAQ stock market, what does it mean to us, Paypal users (sellers in particular)? This should be more relevant to eBay sellers than those who just use Paypal on their e-commerce website.

Unconfirmed Shipping Address

If I remember correctly, one of the most significant changes after eBay acquired Paypal (back in 2002) was that shipping to unconfirmed addresses became protected for all eBay orders. It made me more comfortable shipping international order since almost all international addresses were unconfirmed. Is eBay still offering protection to all unconfirmed shipping addresses?

According to Paypal seller protection requirements (as of 7/21/2015): “If the item was sold through your site, make sure you’re shipping the item to a confirmed address.” Does that imply that confirmed shipping address is not required for eBay sellers protection?

ebay: shipping to unconfirmed addresses

ebay: shipping to unconfirmed addresses

As of today, the answer from an eBay help page to the question “Should I ship to an unconfirmed address?” is: “As long as you ship to the address found on the eBay Order details page or the PayPal Transaction Details page, you are eligible for certain protections under the eBay Money Back Guarantee.” I am not sure though why the Money Back Guarantee is even in the answer, because it is for buyer’s protection. The reason eBay offered protection for unconfirmed addresses was they did not want to lose buyers. (Majority of unconfirmed addresses are still safe.)

Supposedly when Paypal and eBay were one company, buyer info on an eBay order details page should be identical to that on the associated Paypal transaction details page (although the above help page implies otherwise but personally I have not seen any cases with discrepancies ). I haven’t used eBay for a while, but I believe that eBay’s decision on dispute was final. In other words, buyer can file a dispute with either Paypal or eBay, but if eBay ruled in favor of you, you got to keep the money. Things obviously are going to be different now.

Seller Protection

I just checked out the eBay page about seller protection. Other than the mentioning of Paypal protection, there is basically no such thing as eBay protection for sellers. Potentially, buyers can have different addresses on Paypal and eBay. A confirmed address on one site might be unconfirmed on the other. Perhaps address confirmation is never that much of an emphasis for eBay. After all, they are not a payment processor like Paypal. As an auctioneer, it makes sense for eBay to be more interested in money back guarantee for buyers. It seems that their risk of transaction loss has just disappeared by spinning off Paypal. (Their risks more likely come from seller’s arbitration. That’s why they use the Agreement to Arbitration and class action waiver to protect themselves, either from financial loss or reputation damage.)

Interestingly if eBay offers no seller protection (transaction fees being their only risk), and Paypal does not require eBay sellers to ship to confirmed addresses, where does the risk go? eBay sellers, probably?

I once shipped a $1700 laptop computer and the buyer filed an unauthorized dispute immediately after receiving the item. (The transaction occurred on my website and the shipping address was confirmed. Paypal swallowed the loss and flagged each and every transaction of mine for one full year!) If the item were sold on eBay and the address were unconfirmed, now I would probably look to see if the payment is “eligible” for Paypal seller protection. Even if it is “partially eligible,” you will not be protected from unauthorized claims.

Conclusion

It appears that combination of the two companies was better for seller protection because the coverage of unconfirmed shipping address from eBay. It seems from their webpages mentioned above, that either the separation is not 100% complete or they still have lingering feelings for each other.

Regardless of the business decisions of eBay on buying and spinning off Paypal, Paypal and eBay are 2 different companies now and they play different roles. If you sell on eBay, you should have full understanding of how Paypal seller protection works and try to protect yourself from unnecessary risks.

 

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