12 ms·

The only logical conclusion that can be made from eBay's and Paypal's policies is that they no longer want small sellers to use them. They want professional se

The only logical conclusion that can be made from eBay's and Paypal's policies is that they no longer want small sellers to use them. They want professional sellers to sell from their site, people who are used to dealing with chargebacks, etc, and can foot the bill when it comes to chargebacks/fraud. They want to facilitate BUYING from regular people, but make SELLING by regular people very difficult. There is no other explanation for getting rid of buyer reputation and providing no protection to sellers. They only want people who don't care about buyer reputation, and have deep enough pockets and the expectation that chargebacks and fraud will occur. If they deal with these larger customers, this increases their selling volume (and fees) and decreases their support costs.

tlogan 14y ago
Of course. If you look their website now and their SEC filings, it is clear that eBay is not any more "garage sales on internet with auctions". It is more like discount store. Are there any of YC companies building "garage sales on internet"?
- angryasian 14y ago
  just wondering how would you expect or how do other companies currently avoid fraud. The costs associated or added with constantly investigating fraud would almost seem like a deterrent in making a system useful.
  - steve8918 14y ago
    If you look at Paypal's 10-K, they assume an automatic writeoff 4% of their revenues due to losses from chargebacks.
    - hkmurakami 14y ago
      Almost seems like Paypal is making an effort to transfer that cost from their books to sellers.
  - tlogan 14y ago
    I really don't know. For example, as MVP they could actually manually verify accounts (verify Facebook login, friends on that account, etc.). Also, at the beginning, maybe to allow only people in same city to do transaction. I know it is hard, but somebody much smarter than me could do it.
  - joonix 14y ago
    Chargebacks are a part of doing business any time you accept credit cards, whether paypal is your merchant provider or not. The problem here is Visa/MC/Amex etc. Since you almost have to accept credit card payments these days, you're stuck with their terms. Since the banks all provide credit through these card providers, there's very little competition. There are numerous ways to virtually eliminate CC fraud but the card providers aren't interested in taking those measures, and neither are the big retailers. They are happy to accept the ~5% loss on chargebacks, because credit card users spend something like 30-40% more per transaction than cash payers. What we need is a competitor that disrupts credit cards altogether, not just merchant processing. Eliminate VISA and MC, who are basically skimming 2.5% off our retail economy. Cards are obsolete anyways. The processing side is obsolete, we don't need terminals that dial into a central processing machine, we can use the internet. The credit side (banks provide the credit line you get on your card, not Visa/MC) will take a bit more work, but we can combine it with the rise in peer to peer lending: you seek a credit line from a crowdlending site, not Chase bank.
    - discountgenius 14y ago
      Bitcoin enables decentralized digital wealth transfers.
      - psionski 14y ago
        No chargebacks, escrow services for dispute handling, deflationary currency. Need I say more :)
        himlion 14y ago
        all features, not bugs :)
        psionski 14y ago
        You know what they say, some people's bugs are other people's features :) Well... actually I think noone says that, but they should start...
  - cmcewen 14y ago
    Shameless plug - trying to help marketplaces with that problem with Credport (https://www.credport.org/ https://www.credport.org/).
  - callmeed 14y ago
    The same way AirBnB does it: verify everything (phone, email) and provide social context ("You and the seller have 2 friends in common on Facebook"). You could go a step further and remove as much anonymity as possible. Of course, there are other ways to stop fraud which you'd want to do as well.
    - angryasian 14y ago
      paypay already has your credit card and banking information. I think its more about having staff investigating it. For example in this type of story it may be clear, but otherwise its your word vs theirs type situations. With volume of sales, and probably the number of transactions, I imagine its not cheap.
    - mistermann 14y ago
      Facebook has the infrastructure and population coverage to facilitate provide this service. They could charge for "Verified by Facebook" services. Hell, they could replace eBay and PayPal while they're at it, not to mention AirBnB, CraigsList, etc. They're stumbling around looking for a business model as it is, I don't know why they don't get into this. Sure, easier said than done maybe, but if anyone can do it, it is Facebook. Becoming the one site that has the single largest repository of known internet identities within it is the hard part.
      - bicknergseng 14y ago
        I've said the same thing for a couple of years. Their Oodle marketplace is anemic, despite having the ability to combat fraud issues in a way eBay, Craigslist, etc will never be able to. So bizarre to me they don't move into in a serious way. ecommerce
  - floppydisk 14y ago
    In the instance of online auction marketplaces, you could create an escrow system where the seller ships the good to the auctioneer's warehouse (with some practical limitations) who verifies condition and that the good is legitimate (not stolen). Buyers pay money to the escrow company (e.g. Ebay) who ships the goods and send the money to the seller. Any chargebacks go against the escrow company who also happened to have validated the good and can use TOS/Legal Agreements to fight the chargeback on grounds of item quality. In this situation, they could also probably finagle a decent relationship with the CC processors to streamline the process and weed out fraud. Is that workable? Quite possibly. Is it probable? Probably not. Edit: Spelling
- Simucal 14y ago
  Yardsale meets your description and is YC backed.
  - _delirium 14y ago
    Yardsale does meet the description of "garage sale on the internet", but in the Craigslist sense more than the old-eBay sense: it's for selling stuff locally, not for selling worldwide and then shipping it. For some things that works fine, but for long-tail items with niche popularity I found the old ebay quite useful, because you could reach a non-geographically-constrained audience, increasing the odds that someone somewhere would want your obscure thing. Nowadays I sell niche music and books on Amazon Marketplace, admittedly, so one chunk of that market is spoken for by a strong incumbent.
    - ryguytilidie 14y ago
      "Yardsale does meet the description of "garage sale on the internet"" How do you figure?
- deleted 14y ago
  [deleted]
NickM 14y ago
There is no other explanation for getting rid of buyer reputation and providing no protection to sellers. I disagree. Back in the old days when I used to use eBay before they removed buyer feedback, it was considered unwise to ever leave a seller negative feedback because they might turn around and leave you negative feedback in retaliation. By removing buyer feedback, it allows buyers to leave unbiased seller feedback without fear of retribution. One could argue that seller feedback is much more important than buyer feedback because the buyer has to pay first and then trust that the seller will ship them the item as described in a timely fashion. Ideally, the worst thing a buyer should be able to do is not pay, in which case the seller just has to start over and re-list the item in a new auction. It seems like the problem here isn't a lack of buyer feedback so much as a lack of due process for chargebacks, which ends up enabling fraud.
- repiret 14y ago
  I always thought the right solution to this problem was to wait for both parties to submit feedback before revealing the feedback.
  - sp332 14y ago
    A bad seller (or buyer) could avoid negative feedback just by never leaving feedback, meaning the buyer (or seller) would never be able to publish theirs.
    - gacba 14y ago
      oDesk gets around this by having a time limit on when feedback can be left. If one party fails to enter feedback, then it posts the other's feedback anyway. Parties can lobby to have the other person change the feedback, but only if they lobbied party wants to. Seems like a workable system to me and allows each to be honest without consequences like eBay's original system.
      - STRML 14y ago
        That's genius. eBay could really learn from that. Removing buyer feedback entirely is a really big hammer.
repiret 14y ago
Having recently sold an iPhone on eBay and been concerned about problems like this, I wish eBay would allow non-professional sellers restrict bids to professional buyers.
- codenerdz 14y ago
  Thousand times this. Their buyer filtering options are laughable. If they were to let me limit sales to people with certain types of addresses, purchases of certain value, a reasonable number of feedback, etc, that would be very helpful in reducing a chance of being defrauded
  - pjzedalis 14y ago
    eBay makes money off the listing fees. They don't care whether you get your item or not.
    - tolos 14y ago
      If you never get your item, you stop buying, so people stop selling, so people stop using ebay ...
  - Al-Khwarizmi 14y ago
    If they allowed that, almost all sellers would do it for security, and then there would be no ways for buyers to get any feedback. In fact, when I was placing my first bids on eBay, some buyers would cancel the auction or retract the bids because they didn't trust me. I understand their position, but how are you supposed to get feedback if sellers won't sell you anything?
    - repiret 14y ago
      Right, which is why they should only allow non-professional/low-volume sellers to make this restriction, that way new users can still buy from pro sellers to get some reputation, or people selling in odd-ball domains where such a restriction overly harm the seller. If you sell, say, more than 500 items a year, you turn into a professional seller and you can't be as restrictive, but you are doing enough business for the occasional scammer to not make a large impact. Of course, I think eBay is harmed relatively little by scammers like the one in the OP; so I can see why they haven't done much to prevent it at risk of loosing real business.
ephibiz 14y ago
To play devil's advocate, how could similar businesses make better decisions? For example, buyer/scammer "A" sends money via credit card payment to seller "B"s paypal/dwolla/freelancer/etc--"C"s account, who then withdraws the money to his bank. Buyer "A" then files and successfully gets a chargeback from the credit card company, who debits company "C". Now C is wrongfully in the red, and they need to make it back somehow. Their only options? Either get it back from B's account or take the hit--which can really hurt smaller companies and startups. What would you do in company C's position? It seems that the real bad guy here is the credit card company, TBH.
- codenerdz 14y ago
  I sort of agree, but again, Paypal is also enabling this to continue by refusing me the chance to bring my case to the credit card company. Short of legal action, they would not let me get the contact info for the buyers credit card company in order for me to deal with them directly.
TerraHertz 14y ago
I agree. The consistency of their changes that always disadvantage small sellers, reveals intent. But I don't agree with your suggestion that eBay-PayPal is doing this just because they are greedy. I think eBay-PayPal is run by people who take the Elite viewpoint - they dislike that the Internet is giving so much freedom and empowerment to the common people. And they want to reverse that. Ebay originally provided a new and wonderful thing - a facility for individuals to trade easily with each other worldwide. I think that eBay has for a few years now been doing their best to destroy this capability, without being too obvious about their intent. Another comment I have, is that eBay's practices are a very good proof of the social evils that result from software method and business practice patents. If others could provide a trading service that competed with eBay, but was sane and helpful to customers, eBay would be out of business so fast they'd wonder what hit them. (And same for PayPal.)
Datonomics 14y ago
Ebay needs a competitor.

tlogan 14y ago

Of course. If you look their website now and their SEC filings, it is clear that eBay is not any more "garage sales on internet with auctions". It is more like discount store. Are there any of YC companies building "garage sales on internet"?

angryasian 14y ago
just wondering how would you expect or how do other companies currently avoid fraud. The costs associated or added with constantly investigating fraud would almost seem like a deterrent in making a system useful.
- steve8918 14y ago
  If you look at Paypal's 10-K, they assume an automatic writeoff 4% of their revenues due to losses from chargebacks.
  - hkmurakami 14y ago
    Almost seems like Paypal is making an effort to transfer that cost from their books to sellers.
- tlogan 14y ago
  I really don't know. For example, as MVP they could actually manually verify accounts (verify Facebook login, friends on that account, etc.). Also, at the beginning, maybe to allow only people in same city to do transaction. I know it is hard, but somebody much smarter than me could do it.
- joonix 14y ago
  Chargebacks are a part of doing business any time you accept credit cards, whether paypal is your merchant provider or not. The problem here is Visa/MC/Amex etc. Since you almost have to accept credit card payments these days, you're stuck with their terms. Since the banks all provide credit through these card providers, there's very little competition. There are numerous ways to virtually eliminate CC fraud but the card providers aren't interested in taking those measures, and neither are the big retailers. They are happy to accept the ~5% loss on chargebacks, because credit card users spend something like 30-40% more per transaction than cash payers. What we need is a competitor that disrupts credit cards altogether, not just merchant processing. Eliminate VISA and MC, who are basically skimming 2.5% off our retail economy. Cards are obsolete anyways. The processing side is obsolete, we don't need terminals that dial into a central processing machine, we can use the internet. The credit side (banks provide the credit line you get on your card, not Visa/MC) will take a bit more work, but we can combine it with the rise in peer to peer lending: you seek a credit line from a crowdlending site, not Chase bank.
  - discountgenius 14y ago
    Bitcoin enables decentralized digital wealth transfers.
    - psionski 14y ago
      No chargebacks, escrow services for dispute handling, deflationary currency. Need I say more :)
      - himlion 14y ago
        all features, not bugs :)
        psionski 14y ago
        You know what they say, some people's bugs are other people's features :) Well... actually I think noone says that, but they should start...
- cmcewen 14y ago
  Shameless plug - trying to help marketplaces with that problem with Credport (https://www.credport.org/ https://www.credport.org/).
- callmeed 14y ago
  The same way AirBnB does it: verify everything (phone, email) and provide social context ("You and the seller have 2 friends in common on Facebook"). You could go a step further and remove as much anonymity as possible. Of course, there are other ways to stop fraud which you'd want to do as well.
  - angryasian 14y ago
    paypay already has your credit card and banking information. I think its more about having staff investigating it. For example in this type of story it may be clear, but otherwise its your word vs theirs type situations. With volume of sales, and probably the number of transactions, I imagine its not cheap.
  - mistermann 14y ago
    Facebook has the infrastructure and population coverage to facilitate provide this service. They could charge for "Verified by Facebook" services. Hell, they could replace eBay and PayPal while they're at it, not to mention AirBnB, CraigsList, etc. They're stumbling around looking for a business model as it is, I don't know why they don't get into this. Sure, easier said than done maybe, but if anyone can do it, it is Facebook. Becoming the one site that has the single largest repository of known internet identities within it is the hard part.
    - bicknergseng 14y ago
      I've said the same thing for a couple of years. Their Oodle marketplace is anemic, despite having the ability to combat fraud issues in a way eBay, Craigslist, etc will never be able to. So bizarre to me they don't move into in a serious way. ecommerce
- floppydisk 14y ago
  In the instance of online auction marketplaces, you could create an escrow system where the seller ships the good to the auctioneer's warehouse (with some practical limitations) who verifies condition and that the good is legitimate (not stolen). Buyers pay money to the escrow company (e.g. Ebay) who ships the goods and send the money to the seller. Any chargebacks go against the escrow company who also happened to have validated the good and can use TOS/Legal Agreements to fight the chargeback on grounds of item quality. In this situation, they could also probably finagle a decent relationship with the CC processors to streamline the process and weed out fraud. Is that workable? Quite possibly. Is it probable? Probably not. Edit: Spelling
Simucal 14y ago
Yardsale meets your description and is YC backed.
- _delirium 14y ago
  Yardsale does meet the description of "garage sale on the internet", but in the Craigslist sense more than the old-eBay sense: it's for selling stuff locally, not for selling worldwide and then shipping it. For some things that works fine, but for long-tail items with niche popularity I found the old ebay quite useful, because you could reach a non-geographically-constrained audience, increasing the odds that someone somewhere would want your obscure thing. Nowadays I sell niche music and books on Amazon Marketplace, admittedly, so one chunk of that market is spoken for by a strong incumbent.
  - ryguytilidie 14y ago
    "Yardsale does meet the description of "garage sale on the internet"" How do you figure?
deleted 14y ago
[deleted]

NickM 14y ago

There is no other explanation for getting rid of buyer reputation and providing no protection to sellers. I disagree. Back in the old days when I used to use eBay before they removed buyer feedback, it was considered unwise to ever leave a seller negative feedback because they might turn around and leave you negative feedback in retaliation. By removing buyer feedback, it allows buyers to leave unbiased seller feedback without fear of retribution. One could argue that seller feedback is much more important than buyer feedback because the buyer has to pay first and then trust that the seller will ship them the item as described in a timely fashion. Ideally, the worst thing a buyer should be able to do is not pay, in which case the seller just has to start over and re-list the item in a new auction. It seems like the problem here isn't a lack of buyer feedback so much as a lack of due process for chargebacks, which ends up enabling fraud.

repiret 14y ago
I always thought the right solution to this problem was to wait for both parties to submit feedback before revealing the feedback.
- sp332 14y ago
  A bad seller (or buyer) could avoid negative feedback just by never leaving feedback, meaning the buyer (or seller) would never be able to publish theirs.
  - gacba 14y ago
    oDesk gets around this by having a time limit on when feedback can be left. If one party fails to enter feedback, then it posts the other's feedback anyway. Parties can lobby to have the other person change the feedback, but only if they lobbied party wants to. Seems like a workable system to me and allows each to be honest without consequences like eBay's original system.
    - STRML 14y ago
      That's genius. eBay could really learn from that. Removing buyer feedback entirely is a really big hammer.

repiret 14y ago

Having recently sold an iPhone on eBay and been concerned about problems like this, I wish eBay would allow non-professional sellers restrict bids to professional buyers.

codenerdz 14y ago
Thousand times this. Their buyer filtering options are laughable. If they were to let me limit sales to people with certain types of addresses, purchases of certain value, a reasonable number of feedback, etc, that would be very helpful in reducing a chance of being defrauded
- pjzedalis 14y ago
  eBay makes money off the listing fees. They don't care whether you get your item or not.
  - tolos 14y ago
    If you never get your item, you stop buying, so people stop selling, so people stop using ebay ...
- Al-Khwarizmi 14y ago
  If they allowed that, almost all sellers would do it for security, and then there would be no ways for buyers to get any feedback. In fact, when I was placing my first bids on eBay, some buyers would cancel the auction or retract the bids because they didn't trust me. I understand their position, but how are you supposed to get feedback if sellers won't sell you anything?
  - repiret 14y ago
    Right, which is why they should only allow non-professional/low-volume sellers to make this restriction, that way new users can still buy from pro sellers to get some reputation, or people selling in odd-ball domains where such a restriction overly harm the seller. If you sell, say, more than 500 items a year, you turn into a professional seller and you can't be as restrictive, but you are doing enough business for the occasional scammer to not make a large impact. Of course, I think eBay is harmed relatively little by scammers like the one in the OP; so I can see why they haven't done much to prevent it at risk of loosing real business.

ephibiz 14y ago

To play devil's advocate, how could similar businesses make better decisions? For example, buyer/scammer "A" sends money via credit card payment to seller "B"s paypal/dwolla/freelancer/etc--"C"s account, who then withdraws the money to his bank. Buyer "A" then files and successfully gets a chargeback from the credit card company, who debits company "C". Now C is wrongfully in the red, and they need to make it back somehow. Their only options? Either get it back from B's account or take the hit--which can really hurt smaller companies and startups. What would you do in company C's position? It seems that the real bad guy here is the credit card company, TBH.

codenerdz 14y ago
I sort of agree, but again, Paypal is also enabling this to continue by refusing me the chance to bring my case to the credit card company. Short of legal action, they would not let me get the contact info for the buyers credit card company in order for me to deal with them directly.

TerraHertz 14y ago

I agree. The consistency of their changes that always disadvantage small sellers, reveals intent. But I don't agree with your suggestion that eBay-PayPal is doing this just because they are greedy. I think eBay-PayPal is run by people who take the Elite viewpoint - they dislike that the Internet is giving so much freedom and empowerment to the common people. And they want to reverse that. Ebay originally provided a new and wonderful thing - a facility for individuals to trade easily with each other worldwide. I think that eBay has for a few years now been doing their best to destroy this capability, without being too obvious about their intent. Another comment I have, is that eBay's practices are a very good proof of the social evils that result from software method and business practice patents. If others could provide a trading service that competed with eBay, but was sane and helpful to customers, eBay would be out of business so fast they'd wonder what hit them. (And same for PayPal.)

Datonomics 14y ago

Ebay needs a competitor.