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A short time ago I wrote about the Ebay “safe payments” policy which forces new sellers to accept Paypal, predicting that it is only the first in a series of steps to force Ebayers to use Paypal - an Ebay owned online payments company. Now Ebay has taken the next step - scrapping the Ebay buyer protection and only giving buyer protection for payments through Paypal.

In a release on 9 May 2007 Ebay Australia announced the new system. While stating that “Buyer protection is important because of the confidence it builds among buyers when transacting on eBay.” the announcement warned that “the eBay Standard Purchase Protection Program on ebay.com.au will be discontinued from Thursday 7 June 2007. Items listed from Thursday 7 June 2007 will no longer be eligible for buyer protection unless paid for with PayPal.

Without a doubt - Paypal is a very convenient payment system, but it is not problem free. Horror stories abound about sellers losing money to fraudulent buyers and finding that the Paypal seller protection is not much more than a bundle of red tape and fine print.

Paypal’s notorious inability to protect Ebay sellers (ie the people who actually pay its fees) is not the only reason why forcing Paypal use is a bad idea. Ebay sellers are charged a fee for receiving payment through Paypal, in addition to the very considerable listing and final value fees charged by Ebay. As fees rise, so do the sale prices, making Ebay a less attractive place to grab a bargain.

These considerations do not seem to concern Ebay, which is happy to abuse its market power to get two bites of the cherry - first from the Ebay fees and then from Paypal fees.

Its behaviour smacks strongly of third line forcing - which is a breach of the Trade Practices Act. That is, unless Ebay got an exemption allowing it to abuse its control of the worlds most popular market place and payment service.

Buyers are advised that the standard buyer protection program will end on 7 June 2007. As always, for a safe and pleasant shopping experience, it is best to rely on seller reputation and self-protection (such as asking for COD shipping if a seller doesn’t have much of a feedback). Paypal protection has not been great for sellers, it is not clear if it it will be any better for buyers - but as with everything in life, looking after yourself is the best way to stay safe.

Happy Ebaying

Ebay jewelry buyers are advised to watch out for a disturbing and dishonest practice by some sellers - failing to state in their listing that the stones in their jewelry are not genuine.

A number of sellers on Ebay list cz, crystal and simulated gemstone jewellery in categories for natural gemstones. They either fail to include a description of the stones or fail to state whether the stones are genuine or not. Hints that the stones are crystal or glass may be found by reading between the lines, but the trap for the buyer is set.

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Ebay can be a great place to buy jewellery at below retail price, but you do have to be careful to avoid being burnt. Fortunately, taking a few simple precautions is all that is necessary to ensure a great shopping experience.

1. Know what you are buying

If you don’t know enough about what you are buying, you are more likely to fall victim to one of the misleading sales tactics described below or you may not understand enough of the description to choose exactly what you are after. You don’t need to become a jewellery expert, but some basic knowledge is essential.

For example, if you are buying gemstone jewellery, you should know a bit about the gemstones you are looking for. If you are buying diamond items, you should understand what the various diamond colours and qualities mean. This information is easily accessible on the internet. Many jewellery retailers put guides or other information on their sites. For example, this website and our ecommerce website http://www.jewellery-galore.com contains detailed guides for jewellery we sell.

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A few days ago the Ebay safe payments policy for new sellers came into effect.

What the policy says:
“eBay will require sellers who register after 17th January 2007 to accept at least one of the preferred safe payment forms of either PayPal or a merchant credit card facilities, in their listings.”

I’m not a new seller and the policy doesn’t apply to me. Yet… No doubt a few months down the track Ebay will claim that the policy was so successful in promoting Ebay values (read: increasing the Ebay share price) that they decided to extend its “benefit” to all sellers. But personal interest aside - I have trouble with hypocrisy, so I can’t help but comment.

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