PayPal and eBay: When cash in the bank isn't what it seems
Over the years I've sold many items on eBay and have been very happy, particularly with the strength of Mac and iPhone prices on the auction site. Recently, though, I've been having second thoughts. Costs are rising and the commission for eBay and PayPal can be a shock. Only this week I sold a 16GB wifi iPad for £362 - a very good price, I thought - but after charges I got only £309. That's a massive 15% snaffled by the two eBay-owned companies. Use my site, use my bank, if you please.
Yet as the cost of doing business rises the pitfalls are getting deeper. A couple of weeks ago a friend sold his iMac on eBay for £900. The buyer was a no-star beginner and didn't pay. After four days of fruitless emails, the £900 appeared in the seller's PayPal account. An hour or so later a man appeared at the door, claiming to be a cab driver sent to collect the computer. Very fortunately my friend decided to re-check his PayPal account and was shocked to see that the money had disappeared. Only by the merest chance did he avoid being the victim of fraud.
How can this happen? Well, if you read the small print on your PayPal payment advice you will see the following gem: "Please be aware that your payment can still be reversed, (e.g. if it is subject to a chargeback), even after you have posted the item to your buyer."
So, really, you can have no confidence in the system. Of course, if you have complied with all the guidelines and sent only to a confirmed addresses (not handed over the goods to a taxi driver) you could be covered by PayPal's insurance. I suspect, though, you would have a protracted period of uncertainty before you saw your money.
In my innocence I thought that the whole benefit of using PayPal was that once the money was in your account you could despatch the goods. It seems, though, that PayPal could reverse the payment on the word of the buyer. Everyone understands that precautions have to be taken, but the whole basis of trust in eBay transactions depends on the seller being sure of the funds before sending the goods. Once this trust is lost, the whole edifice comes crumbling down.
I have no doubt that both eBay and PayPal wage an endless war against fraudsters, but it seems to be all too easy for unscrupulous individuals to open eBay accounts and cause havoc. Apart from attempted fraud there is an increasing incidence of spoiler bidding. This activity involves winning auctions by bidding unrealistic amounts simply to annoy the seller and upset the system. No payment is ever made and the luckless seller has to relist. eBay should be doing more to weed out these unsavoury individuals. And PayPal should be unable to recover deposited cash without the agreement of the account holder.
Incidentally, in the above case, according to PayPal's fraud department, the payment had been sent from the account of an innocent third party whose details had been compromised. Hence the need for a personal collection rather than having the parcel sent to the registered address of the defrauded alleged buyer. However, I believe that if a fraudulent account is used to pay for goods it should not be the seller who suffers: it should be PayPal. That's why we pay them a fee. They should act like credit card companies who usually take full responsibility for fraudulent card use.