Using Paypal On eBay
A Seller's Review
This article covers Paypal from the sellers point of view, and was written in 2004. Today you don't have a choice about using PayPal on ebay unless you take credit cards with your own merchant account instead. I've left this article as a place holder, and will come back and update in it the future. There is another article about Paypal and eBay Buyers. You should read it after you get done with this article. There is a link at the bottom of this guide. We start with some common Paypal scams, and then go on to using Paypal in your eBay auctions.
Two common Paypal scams are for eastern European's to ask American to accept Paypal payments and forward them by wire transfer, or using identity theft to steal American users accounts, and then buying merchandise to be shipped to the criminal.
As a seller accepting Paypal, you should never use your account to pass money on to someone else. You should also check the user's address before shipping.
Accepting Paypal as a payment method might increase your profits. This depends on what you are selling. I sell collectibles to collectors. My clients are like junkies. They will buy regardless of the payment options, so not offering Paypal won't make much difference in the final selling prices.
If you sell items with high competition, accepting Paypal will make your auctions more attractive. This also holds true for impulse buys. Plus, you get paid instantly through Paypal.
Select accept Paypal in the auction listing process to get the Paypal logo into your auction. You can put in the auction description that you accept Paypal, but unless you use the Paypal logo some buyers will miss this Payment choice. Many buyers look specifically for the logo and expect to find it in certain areas of the auction listing.
If you only accept bank account transfers, and do not accept credit card payments through paypal be sure to mention this in your auction description and the payment types area. Even after you mention this, you will get credit card payments from some Paypal users. This causes confusion with buyers.
For this reason, I recommend taking credit card payments and considering the added paypal fees a cost of doing business. It used to be once you upgraded to a premier or business account so you could accept credit cards, Paypal charged you a fee for every transaction. Since Paypal's sale to eBay and the subsequent merger, this has changed. Now merchant's only pay fees for credit and debit card transactions. Transfers do not incur fees.
One problem that may come up is your shipping schedule. I ship once a week. Some eBay buyers feel that I should drop everything and go to the post office as soon as they send me money through Paypal. This used to cause problems.
Now when a buyer sends me money, I quickly email him and tell him when to expect their item. Because I ship on Thursday or Friday, I can tell them their item will be delivered by the next Tuesday, if not earlier. Instead of telling the buyer I will ship the item on Friday, I tell them to expect it on Monday. This changes the buyer's focus from when I will ship to when they will get the item.
One last thing before I finish up. I recommend eBay sellers use guarantees. If you take a credit card through Paypal, and later refund the buyer's money, you will be out the Paypal fees if the refund is done more than 30 days after the initial transaction.
PS. Be sure you read the accompanying article about Paypal for eBay buyers.
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