Full FeedPaypal responds to customer uproar over new unannounced fees but doesn’t really say much
You may remember that last week PayPal had introduced new fees for those with Personal accounts without any prior notification. This caused quite an uproar as angry customers flooded this site, Digg, and other sites around the net with protests. The new fees affect those with Personal accounts who are now charged a fee of 2.9% plus 30 cents to receive payments labeled as “Goods” or “Services.” Previously those payments were free to receive. While PayPal claims they sent an email out announcing the changes, I never received one and judging from the uproar, most of my fellow PayPal users didn’t either. The only notice they got was they saw the new charges on their account.
What was sent out was an email trumpeting how those with Premium or Business accounts no longer had to pay fees for personal transfers. That’s what PayPal chose to focus on rather than the fact they were going to start charging new fees to their Personal account holders, and a quote from PR Manager Charlotte Hill did nothing but fan the fire:
“We didn’t want to make a huge formal communication out of this pricing change, because we weren’t really adding any fees, and we were hoping it would be a more useful experience for people.”
Actually, they did add fees to Personal accounts, but apparently in their minds, since they removed fees from Premium accounts at the same time, it somehow made things okay. The reaction of PayPal’s customers has shown that it wasn’t okay and that the company needs to do some serious work on its customer service and communication skills.
Check out Product Marketing Director Heinz Waelchli’s blog post where he says he wants to “clarify” the issue. Maybe it’s me but I’ve read it several times and still can’t find any clarification. He danced around the issue completely and again focused on what services aren’t charged fees instead of providing clear information on what services are charged fees and what those fees are. He claims the new fees were announced on the blog (they weren’t), on the site’s policy page (who checks that regularly?) and via email (which most customers never seemed to have received). Instead all they got was marketing hype.
I’m not sure what made customers angrier, the new fees or the fact they weren’t told about them, but one thing is clear - PayPal made a huge blunder here and until they recognize the fact, offer a proper apology, and change the way they do things so that policy changes are more transparent and thoroughly communicated, they will continue to draw ire from their users. I realize they hold a monopoly of sorts, especially now that eBay refuses to allow any other form of payment, but there will come a point when people have had enough, and eventually another company will come along and give Paypal some legitimate and stiff competition. It’s bound to happen, and for many people, can’t happen soon enough.
Read [PCWorld]
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No matter how “Noise” Donahoe and his sycophants spin it, the eBay marketplace is going down the toilet. Why would anyone with even half a brain want to risk crippling this golden goose? Donahoe and his policies are eBay’s greatest problem: sellers are leaving in droves; buyers too apparently: the auction system has always been broken as far as protecting buyers from shill bidders is concerned, and made even more insecure by the very changes that eBay, disingenuously, claims will improve such security.
The people currently running eBay are a lot of greedy, unscrupulous, disingenuous, incompetent buffoons, and I predict that there will be no more performance bonuses for them, at least not “above the table” ...
Donahoe and some market analysts seem to believe that PayPal’s manning of the pumps will keep the good ship “eBay” afloat. I certainly would not put my money on the “clunky” PayPal for the long term. Assuming that the parties don’t have some agreement to not compete, I have no doubt that eventually those other well known “loan sharks”, the major credit card companies, will get off their butts and introduce a similar universal card/terminal-less on-line payments system that the participating banks can incorporate into their internet banking systems—and they, at least, will do it properly—and that, my friends, will undoubtedly be the end of PayPal outside of the Donahoe-dwarfed eBay marketplace ...
I recall that Donahoe has been quoted somewhere as saying that the door is slightly ajar for a potential spinoff of his company’s online payments unit. If this is correct it will be the first logical thought that this guy has ever had; he otherwise clearly has no idea of what he is doing at eBay. If that MBA taught him anything then he should be using whatever skills he does possess to negotiate with the banks to take PayPal and integrate it into their online payments system—in exchange for an appropriate interest in the consolidated business, of course. Because, the more successful PayPal is, the more likely it is that the banks will finally get off their butts and introduce a like system; if and when that happens the banks will do the job properly and will exterminate PayPal for being the “irritating insect” that it is.
Shill Bidding on eBay: a Case Study
For eBay “watchers”, a detailed case study of the crime of “shill” bidding and the abuse of eBay’s proxy bidding system—all exacerbated by eBay’s introduction of “hidden bidders”—plus a detailed general criticism of eBay’s “clunky” auction platform, and policies, at
<url>http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24033</url>
A synopsis thereof:
very little of the auction system security, that eBay claims to offer buyers, exists in fact;
contrary to their claims, it can be demonstrated that eBay has no “proactive” nor “sophisticated” system in place for the detection of undisclosed vendor (“shill”) bidding, and indeed eBay does nothing about such criminal activity except as a reaction to a user’s report of such, and even then eBay’s ultimate response will be unconvincing;
eBay has no effective matter-of-course verification of users: unscrupulous users can apparently have as many user IDs as they may have email addresses;
many of eBay’s “rules”, concerning the retraction of bids, cancellation of auctions, etc, are nominal only and are no bar to the machinations of the unscrupulous seller;
as a result, eBay’s “proxy” bidding system is so open to abuse by such unscrupulous sellers that to use it, as eBay intends it to be used, can be an invitation to pay the maximum you have indicated you are prepared to pay;
by the lack of any effectual system to proactively detect shill bidding, eBay has ever effectively, and knowingly, “aided and abetted” unscrupulous shill-bidding sellers to defraud naïve buyers; by so doing, eBay benefits from a higher “final valuation fee”;
the masking of bidding IDs with non-unique, absolutely anonymous aliases serves no purpose other than to further obscure all but the most blatant of shill bidding, and defeats any attempt at programmatic analysis of individual bidding patterns to expose such activity;
the quarterly changing of even these non-unique, absolutely anonymous, bidding aliases serves absolutely no other purpose than to stop even experienced eBay users from attempting to manually track suspicious bidding activity over time;
the anonymous, individual bidder Bid History Details pages, supposedly supplied to offset the absolute masking of bidding IDs, although better than nothing, will usually present an ambiguous view and, in such circumstances, are of little value;
anyone naïve enough to make other than a last-moment “snipe” bid on a seller-elected “private” auction (ie, “User ID kept private”), on the balance of probability, is going to be defrauded—and eBay knows it;
when suspected fraud is reported, and is found by eBay to be proved to their satisfaction, eBay will conceal that fact from the victim of the fraud; this then is the concealing of a crime after the fact—surely, a crime in itself;
eBay will never acknowledge to a victim that a fraud has been perpetrated, nor indeed will eBay acknowledge that such fraud is even a problem on eBay auctions; eBay therefore sees no reason to provide any mechanism to aid in the recovery of any monies so defrauded;
if eBay did have any proactive and truly sophisticated system in place for the detection and control of shill bidding, we would not now be having this debate;
for those buyers (and honest sellers) who embrace eBay believing that eBay acts as an “honest broker” between buyer and seller, I can only say that you may as well believe that there are fairies at the bottom of your garden too; and
the most disgraceful aspect of this matter is that we all would, quite rightly, be upset if our local auctioneer, from whom we were buying, was found to be facilitating and concealing such criminal activity—and here is eBay, knowingly, doing just that to the whole world!
on August 16, 2009 at 05:48 AM - LINKHere is another very dark side of PayPal
Any eBay buyer can file a Significantly Not As Described (SNAD) claim with PayPal after receiving an item from an eBay seller.
PayPal says they have a review process for SNAD claims. They don’t. PayPal does not review the reasons that the buyer filed the SNAD claim nor do they review the evidence supplied by the buyer. PayPal decides in favor of the buyer.
PayPal tells the buyer to return the “not as described” item to the seller using USPS Delivery Confirmation. Once PayPal receives a Delivery Confirmation number, they refund the buyer’s money.
The buyer can return anything or nothing to the eBay seller as long as it has a Delivery Confirmation number. Once PayPal receives the Delivery Confirmation number, they refund the buyer’s money. The seller loses the item AND their money.
The seller of a 10 lb item sent in a box can receive an empty business size envelope with Delivery Confirmation from the buyer. PayPal does not care that a 10 lb item was supposedly returned in a business size envelope. As long as PayPal has a Delivery Confirmation for anything sent by the buyer to the seller, PayPal refunds to the buyer.
Sellers are now videotaping and photographing the opening of returned SNAD items. Even with video/photographic proof of receiving an empty package, PayPal and eBay STILL refuse to believe sellers and side with the buyer. The seller loses their item AND their money.
If the seller complains, PayPal and eBay refer sellers to the police but most Police Departments refuse to accept reports for online theft/fraud.
Google the words “paypal snad fraud” or “paypal snad scam” to learn more.
on August 20, 2009 at 11:31 AM - LINKThis points to the fact that there are no banking regulations currently in place that include online payment services like PayPal. Even the new regulations for cc companies (that they are now circumventing by coming up with a whole new set of account-holder fees) do not apply to PP and the account holder is a high risk for fees, increases, and complete lack of consumer protections for all other consumer banking services.
While PP promotes its “Seller protection policies” they are designed to put the seller at financial risk. Their Dispute Resolution policy is expensive and does not protect seller accounts, and are said to take 75 days to resolve, when we all know that it takes months, as much as 7 or 8 months to resolve payment disputes.
Their customer service says it all. When I called them over a dispute that took 7 months to resolve, I was told “Do you know how much it’s costing PP to work on your dispute?”
Guess who PP is looking out for? NOT the sellers’ (or anyone else) with PP accounts, bueinss and personal!
on August 21, 2009 at 07:09 AM - LINKActually, ebay does allow other payment methods. Any buyer can pay with cash, money order, propay, western union, ect…You just cannot advertise them in your listings.
on August 21, 2009 at 07:56 PM - LINKCan anyone suggest an alternative site that does what paypal does? I hope their business model isn’t patented, because they really need competition to put limits on what they can get away with.
on August 30, 2009 at 01:53 PM - LINK