More eBay sellers must offer PayPalSuccessful sales will also cost you more

30 January 2008

Internet auction site eBay is forcing more of its users to offer PayPal as a payment method when they sell goods online.

Sellers with a feedback score of less than 100, including newcomers to the site, will have to accept PayPal payments.

Sellers listing an item in certain higher-risk categories will also have to accept PayPal payments. These are health and beauty, video games, mobile and home phones, computers, consumer electronics, and jewellery and watches.

PayPal was acquired by eBay in 2002 and is a way of making payments online without using a credit or debit card. You can set up a PayPal account and transfer money into it from a bank account.

PayPal

Buyers say they are more likely to use the site when PayPal is offered as a payment method, according to eBay.

The site is also cutting the cost of listing items for sale by about a third.

At the same time, it is raising the fee charged to the seller for each item sold from 5.25% to about 7.5%.

People who sell large numbers of items on eBay, described as 'power sellers', will get discounts of up to 40% on the final value fees.

Poor feedback

Sellers with poor customer feedback will appear towards the bottom of eBay search results while good sellers will feature further up.

Another part of the changes is a ban on sellers leaving negative feedback about buyers. This was brought in because of a tit-for-tat problem, when buyers feared getting bad feedback if they were honest in feedback about a seller after a bad experience.

Which? Technology Editor Matthew Bath says that while the changes go some way to adding more protection for buyers on eBay, there are still some significant question marks over the move.

'While fees will be lower for items that don't sell, consumers selling on eBay will be faced with higher costs when they do sell products – which could increase the amount you pay to eBay in the long term if you successfully sell listed items.

'The fact that new users can only use PayPal, which eBay profits from each time it is used, and that sellers can no longer leave negative feedback to bad purchasers, mean it's worth consumers taking time to be fully aware of these changes before using eBay.'

Internet auctions

When buying goods through an internet auction site, our advice is to be careful about the payment method you use if the seller has little or no selling history. Never use money transfers to pay or agree to do business ‘offsite’. When using expensive purchases use an escrow service.

Escrow is a payment system where both the buyer and seller’s financial details are held by a third party company acting as ‘middleman’.

The buyer makes their payment into the escrow account. The payment is only made to the seller when the goods have arrived and been deemed satisfactory by the buyer.

But you should never enter an escrow account site through a link in an email sent to you by anyone. Fraudsters have been known to set up fake escrow websites. Always enter the escrow site through its proper web address.

Watch out for people offering you a deal below the current bid or reserve price, especially if they're contacting you direct.