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Disclaimer about Not Earning Interest on Held Funds Has Been Removed?
I originally posted the following as a reply in another thread over in the "New to selling on eBay" group, but then decided that it really needs its own topic here in the Selling group instead.
I was trying to track down any eBay policy statement where they address the old question of whether they earn interest on held funds. As recently as last March, @ebooksdiva (and others, including me in the past) had previously quoted this statement from eBay which appeared in the link below (emphasis mine):
Tip
If we place a hold on your funds, it will usually be resolved within 30 days, but in rare circumstances it may take longer. For most orders, adding tracking information can help you receive your funds faster. eBay does not earn interest on held funds.
https://www.ebay.com/help/selling/getting-paid/getting-paid-items-youve-sold/payments-hold?id=4816
(Look for the Tip subhead in the blue box on that page.)
But if you go to that link today, rather than a few months ago when that quote was posted previously, it appears that the last sentence quoted above, "eBay does not earn interest on held funds," has now been quietly removed. I cannot find any other disclaimers like that on any other eBay policy pages. Can anyone else find a current statement from eBay regarding interest on held funds?
Granted, the amount of interest directly owed to a seller for a 30-day hold would probably be measured in fractions of a penny, and Adyen, not eBay, is the Managed Payments handler (who presumably does earn interest on held funds since handling money is their business), but I was a little surprised this morning to find that that disclaimer seems to have gone away. Are there any other statements from eBay still surviving on this topic?
kh-stanley1
·2 years agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.
Thank you for understanding.
bennotbill
·2 years agoIt's just the way they do it that many find objectionable.
az93
·2 years agoEbay is in business to make money just like the rest of us.
valueaddedresource
·2 years ago@a_c_green and anyone else who was following this - eBay has finally put it in writing in the latest update to the Payments Terms of Service....they do in fact earn interest on payments.
https://pages.ebay.com/payment/2.0/terms.html
New section added in the ToS:
Funds received by us on your behalf represent an unsecured claim for payment against us, but do not constitute deposits; nor are these amounts eligible for FDIC pass-through insurance. eCI may combine your funds with the funds of other eCI customers in pooled custodial accounts and invest the funds in accordance with state money transmitter laws.
You do not have any ownership interest in these investments and any interest earned from these investments will be retained by us. To the extent you may have any beneficial ownership in the interest or proceeds of these investments, your acceptance of these terms constitutes an assignment of any right, title or interest therein to us.
The update also says they can put new sellers on a slower payout schedule (in addition to the existing ~14 day new/infrequent seller hold) - presumably to maximize the amount of time they can collect that interest.
We anticipate that Managed Payments transaction proceeds will generally be settled to your Linked Financial Account approximately two to seven business days after the buyer's transaction, although actual settlement times may vary for individual transactions based on circumstances such as your bank’s processing times.
Notwithstanding the foregoing, when you onboard to Managed Payments, we may initially place you on a different payout schedule (no less frequently than monthly) and will communicate the applicable payout schedule to you in My eBay or Seller Hub.
ittybitnot
·2 years agothe latest update to the Payments Terms of Service....they do in fact earn interest on payments.
@valueaddedresource
That can't be true...LOL...eBay holds funds to make eBay a safer place for buyers and sellers.
dbfolks166mt
·2 years agothe latest update to the Payments Terms of Service....they do in fact earn interest on payments.
@valueaddedresource
That can't be true...LOL...eBay holds funds to make eBay a safer place for buyers and sellers.
a_c_green
OP2 years agoWell spotted! 🙂
I have to admit that although we were able to rebut that claim in the past by simply pointing to that statement that has now been removed, the cynic in me wonders whether that was ever correct, or simply a case of the right hand not knowing what the left hand was doing with the interest.
It would be great if eBay would simply summarize changes made to the latest revision of the Ts & Cs, but that would be too easy. Does a similar paragraph exist in the older version?
valueaddedresource
·2 years ago@a_c_green - I had looked at the previous terms in message 4 of this thread a few months ago and did not find anything that explicitly said they did or did not earn interest.
There was a reference at that time to separate terms for Australia which said funds were held in non-interest bearing accounts and I surmised they may have had to call that out separately for regulatory reasons but there was nothing definitive and no similar paragraph in the older version.
I agree I always wondered if that part of the help and policy page was maybe left over from the PayPal days (where PayPal may have been earning interest but eBay wasn't) and maybe it was never really correct for Managed Payments or was a technicality with Adyen earning interest previously for MP.
Unfortunately, we may never really know the answer to that but at least now it's clear for when the question comes up in the future.
Also agree with you it would be nice for eBay to provide a summary of the changes but I don't expect the legal department will ever budge on that one, lol
The only other change I saw that might be of interest to US sellers is explicitly adding unauthorized Spendable Funds transactions to Seller Protections.
Old version:
New version:
elsgun23
·2 years agoanother poster said it was part of adyen's interest income.
siamjane8
·2 years agowhen i put money in a bank... i make interest... but so does the bank. ebay no longer states that they do not make interest so it is very safe to assume they do...just like any other business. This after-all is the main reason that they started managed payments- to control the money and have an additional revenue stream.
I personally have no issue with it and prefer that they find revenue sources like this that do not effect my bottom line. For processing fees it is what it is and they can make millions on the money that flows through there hands. Make no mistake- ayden is the processor but the money is in ebay's account. Now when it comes to artificially holding people's money-that's a different story- they should provide at least partial interest if they are holding "your" money without consent. even money held in escrow for banking requires the interest to be dispersed to the owner of the money.
joliztoyco
·2 years agoI brought this up several months ago and the "cheerleaders" rushed to the defense of poor old eBay, telling me that there's no way eBay was skimming interest off of their all new "Managed Payments Delay Your Payout" scam.
Yeah. Guess they were wrong. What a surprise.
And everybody...stop with the "it's only a few cents" garbage. When you take the enormous pile of cash held by eBay/Adyen , the interest in a day is 10's of thousands of dollars.
Which gives them every incentive to slow walk your pay-outs.
Which is exactly what they do.
I sell something Friday afternoon? eBay gets paid.
eBay sends my "payout" on Tuesday.
It's in my account Wednesday.
That's crap.
But that's eBay.
dbfolks166mt
·2 years agoThat statement has always been questioned and in reality it is probably true that "eBay" does not earn interest on held/escrowed funds since they are not the financial processors. Prior to MP PayPal did in fact openly state that they earned interest on escrowed funds and I fully suspect Adyen who is now the financial processor has also done since they took over as the financial processor. For a normal person interest on small dollar amounts is so trivial it doesn't really matter but to a multi-billion dollar corporation it can be substantial and it is sound business practice to do so. By the same token it is the same reason business savvy corporations do not pay their bills early, they hold the cash until the day the payment is due to earn interest on the cash as long as they possibly can.
slippinjimmy
·3 years agoI have one simple question......
Why does anyone care if eBay collects interest on held funds, in process funds or any other type of funds they have possession of during the time between buyer payments and the payout to a seller?
stephenmorgan
·3 years agoSomeone may think that their payments are being held longer so the holder earns more interest.
I remember when payment processors would deliberately sit on processing a payment until the next day in order to gain more fees. Laws were passed to stop this practice.
itsjustasprain
·3 years agoI dunno. Good question. Upset sellers and trolls keep bringing it up over and over even though common sense tells you that the interest supposedly made on your held funds for 30 days max would be in some fraction of pennies. People with regular sales can tell you that the holds are only temporary and most regular sellers have no holds at all anyway.
valueaddedresource
·3 years ago@itsjustasprain @slippinjimmy - I don't want to speak for anyone else here but regardless of the amount of money in question, just the fact that there may have been an unannounced change may be concerning.
Many of the very helpful long time posters here who respond to those upset sellers have in the past depended on those eBay help/policy pages to give answers and try to assuage concerns - if the policy has changed, it would be much appreciated for eBay to make that clear, if for no other reason than to help us all be able to provide accurate information to other members of the community.
surenet
·2 years agoBecause it is money I could be earning interest on. Current CD rates are in the neighborhood of 5%. They have placed holds in the past two weeks totaling $13000. The 30 day simple interest for that $13000 at 5% is $54. If they keep placing holds at this rate it will be about $700 a year taken from me. I am top-rated with 25 years on ebay and millions in sales. There is nothing that warrants a hold by the criteria listed as reasons for a hold. They have never placed a hold on anything in 25 years until now. Additionally, when I go to the status page for holds it says that the information is not available.
lilyswan2
·2 years agobut mulitiply the pennies by every seller that has funds held and adds up to a substantial amount...maybe the sellers should be getting any interest as it is their funds that are held...
farmalljr
·2 years agoBecause my money is MINE. If anyone should be earning interest, shouldn't it be the rightful owner of the money? Or maybe you are good paying me interest on your money? If so, just let me know, I'll give you an address to send the checks to.
It's not always the seller owed a few bucks that are waiting. Sometimes it's sellers owed thousands.
inkypianofingers
·2 years agoBecause it's not their danged money. They charge a good chunk of change when an item sells and that should be enough.
krazzykats
·3 years agoHow does the updated eBay payments experience work... - The eBay Community
valueaddedresource
·3 years ago@krazzykats that refers to the normal processing time for payouts. The page @a_c_green was referring to is specifically about payment holds, which are not the same thing.
a_c_green
OP3 years agoThat was a good find by @krazzykats. It's worth noting, though, that in addition to it not referring specifically to payment holds (only to a general question about funds that are not yet paid out to sellers), that page was last updated back in March of 2021.
The removed line I noticed seems to have been taken out sometime within the past three months. That page from two years ago may have been overlooked in the revision process.
valueaddedresource
·3 years agoGood point @a_c_green and good find @krazzykats - it looks like this page used to also say eBay does not earn interest on seller funds, but not any more.
https://www.ebay.com/help/selling/getting-paid/getting-paid-items-youve-sold?id=4814
Last save in internet archive is from August 2022:
https://web.archive.org/web/20220802215928/https://www.ebay.com/help/selling/getting-paid/getting-paid-items-youve-sold?id=4814
valueaddedresource
·3 years agoGood catch @a_c_green !
I'm not sure when exactly it changed, but looking at that page in the internet archive, it looks like the tip about no interest was still there on March 14.
https://web.archive.org/web/20230314003040/https://www.ebay.com/help/selling/getting-paid/getting-paid-items-youve-sold/payments-hold?id=4816
Coincidentally, eBay released an update to the payment policy on March 14 as well.
https://pages.ebay.com/payment/2.0/terms.html
I've searched those terms pretty extensively and didn't find anything explicitly related to interest. However, when comparing the previous payment terms to the new terms, the section about holds and reserves does have a change that refers users whose payments are processed by eBay Commerce Australia (ECA) to additional policies that apply.
Here's the language from the new policy that was not in the old one:
If ECA is your Payout Entity, any reserve required of you is further subject to the Seller Reserve Terms and Conditions. By accepting these Payments Terms of Use, you agree to the Seller Reserve Terms and Conditions to the extent they apply to you.
That additional Seller Reserve T&C page (which only applies to Australia) states:
If we require a Reserve, the funds contributed to the Reserve Account constitute collateral held by eCA to secure your obligations under the Payments Terms and are a condition to you using our Payment Services. Funds contributed to the Reserve Account are held in the name of eCA in a separate non-interest bearing bank account, segregated from eCA’s operating funds, for the exclusive purpose of holding Reserve funds (the “Reserve Accountâ€).
My guess is that there may be regulations involved that would have required eBay to handle Australia this way, but so far I haven't found any similar policy page for US or any other country.
The fact that they had to call out a separate policy of using non-interest bearing accounts for Australia makes me think it's very possible that means they may be collecting interest on reserves/holds in other countries as of the effective date of that payment policy update, but it would be nice to find that explicitly stated somewhere.
@devon@ebay @kyle@ebay @elizabeth@ebay can you ask the payments team for further information on this please?
whatmorefabric
·3 years agoEbay does not earn interest because Ebay is not holding the funds.
All of these transactions and processing are done by a third party.
They may or may not earn interest, but they really don't earn a lot in interest payments
bafosdeals
·3 years agoThe amount of money eBay earns on interest on any anything is so minuscule, it's not worth worrying about. Actually, in 2022, they lost money on interest because it's lumped in with their investment gains/losses.