Business/E-Business
Commentary
2/8/2008
07:02 PM
Jake Widman
Jake Widman
Commentary
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Sellers Alarmed by eBay Plan to Hold PayPal Funds

Fortune Small Business

eBay's plans to withhold PayPal payments for up to 21 days in what it determines to be "high-risk" transactions has sellers up in arms.Last week eBay announced changes to its fee structure and feedback rules, most of which have not sat well with the sellers who rely on the auction site to conduct their business. Resistance has grown to the point where a strike of eBay users is being discussed.

But the sellers are most upset by eBay's announced intention to hold payments sent through its PayPal subsidiary for up to 21 days, if it considers the transaction to be "high-risk." The policy is intended to protect buyers, since it makes it easier for eBay to refund their money if the seller fails to follow through on the transaction satisfactorily. But for sellers whose small businesses depend on timely cash flow, the thought of having to wait three weeks for payment for reasons beyond their control is causing reactions ranging from annoyance to panic. Fortune Small Business

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