Recently we’ve received some questions from sellers about when and why eBay or PayPal may require sellers to keep money in their accounts—commonly called a “hold.” So I wanted to take a minute to explain and hopefully clear up any confusion.
Trust is absolutely critical in a marketplace, and eBay and PayPal strive to provide buyers and sellers a consistent experience they can count on. Programs like eBay Buyer Protection, eBay’s Top-Rated Seller program and policies like holds are intended to do just that—ensure a trusted experience that buyers expect, which encourages them to shop more with the sellers who use our services.
We take protection and security very seriously around here, which is why like other companies in our industry we have a standard holds policy in place. PayPal may require that sellers hold money in their accounts temporarily if we believe there is a higher risk that there will be issues with their transactions—things like buyer claims, complaints, chargebacks, or even fraudulent access to the seller’s account.
When sellers experience a hold, we want to help them get access to their money as quickly as possible. That’s why we ask sellers to ship their items quickly and provide tracking information. In the vast majority of these cases, when sellers follow these guidelines, their money is available within 3-6 days. Longer holds may apply if best practices aren’t followed or if there are other buyer claims that haven’t been resolved. Although most of our sellers deliver their items quickly, our policies are intended to make sure that this happens consistently, and that buyers receive what they paid for.
We’re very proud of the improvements we’ve made in delivering more trusted experiences to our customers. Raising standards to increase trust, consistency and reliability are driving strong performance. In Q4 2011, eBay’s top-rated sellers saw 20 percent growth. In short, it looks like our efforts are leading to more sales. We'll continue to refine our filters and our approach to supporting good sellers and delivering good buyer experiences.
We’ve also heard some speculation that eBay and PayPal are requiring sellers to hold money in their accounts so that we can earn interest on the funds. This couldn’t be farther from the truth.
PayPal has always stored balances (including held balances) in FDIC-insured bank accounts, which earn a modest interest rate. To eliminate any confusion with our customers over the intent of our policy, we have decided to move the equivalent amount of money of our total “held balances” to a non-interest bearing account. We hope that this clarifies the intent of our policies, which we believe have always been transparent: to ensure a trusted experience that buyers expect and to encourage increased sales for our merchants and sellers.
We want every customer on eBay to have a great experience. For buyers, this means quality merchandise and selection, great customer service, and fast shipping. For sellers, it’s increased sales and better buyer experiences. I want you to know that we are working hard to keep pace with consumer expectations and making eBay a more attractive shopping destination—and that benefits all eBay buyers and sellers.