Infuriated with Managed Payments Funds Hold Policy

[vssoutlet]

Today I received a message from eBay that is among the most offensive I have gotten in my 25 year seller history:

Your funds are on hold until this request is resolved

Request ID: xxxxx

Hi John,

We'd previously contacted you about a return request that BUYER filed for an order placed on Sep 01, 2020.

Until the request is resolved, the transaction amount will be withheld from future payouts.

I called eBay. For background, I am a TRS with a perfect record of honoring returns. Apparently, all sellers on the Managed Payments program that eBay has forced us to use will have funds withheld the moment a buyer opens up a return. Not a claim, just a return.

Aside from being insulting, here is how this policy can do severe damage to your business:

You sell a $7,500 Rolex watch to someone in Australia. They start a return. $7,500 is frozen in your account. 1) They could fail to return the watch and during that entire period, your money is on hold. 2) It could take up to 60 days to go through the process and receive the item back (it's unusual, but it's happened to me on international returns) 3) The return could be fraudulent. Good luck getting the funds released.

If you don't have the $7,500 in your MP account, eBay will just keep withholding money from each sale until they have $7,500. I don't know if they can hit your bank account for it.

This policy is ridiculous because all returns are theoretical until the item is, in fact, returned. PayPal never withheld a dime in advance for sellers with excellent customer service histories. 

If you agree that this policy is insulting and potentially dangerous, please contact eBay and let them know.

[richard1rst]

Well you said the email read "We'd previously contacted you about a return request".  Did you actually respond to the request because the "Until the request is resolved" part makes it look like you did not.

In any event, every time I have had a return request eBay instructed Paypal (and now managed payments) to set the money aside in a holding pattern. So in truth this is nothing new.

By the way I am a TRS+ seller and I have been here since '04 with over 49,000 feedback so it is not because I am new or shady. It is just the way it has always been. Especially if you do not respond.

And if you do not have $7500 in your MP account eBay is not going to want to wait until you do. And how can they be sure you ever will? So for a larger sale especially pulling the funds aside makes perfect sense.

[lja440]

I've also been with eBay since 2004. I stopped selling horse saddles because of the cost of return shipping coupled with the potential loss of $500 or so. I can not wrap my head around selling a $7500 item here. Anymore the value i would put on here is $100. 

[vssoutlet]

@richard1rst 

<<

Well you said the email read "We'd previously contacted you about a return request".  Did you actually respond to the request because the "Until the request is resolved" part makes it look like you did not.

In any event, every time I have had a return request eBay instructed Paypal (and now managed payments) to set the money aside in a holding pattern. So in truth this is nothing new.

By the way I am a TRS+ seller and I have been here since '04 with over 49,000 feedback so it is not because I am new or shady. It is just the way it has always been. Especially if you do not respond.

And if you do not have $7500 in your MP account eBay is not going to want to wait until you do. And how can they be sure you ever will? So for a larger sale especially pulling the funds aside makes perfect sense.>>

The return request had just come through. It was neither a case nor a claim. eBay CS confirmed that this was their policy under MP. 

I have been a seller since 1997. Since at least 2007, I've never had a dime withheld or set aside for a return. Never. Even when I had an $8,500 return, nothing was withheld.

[vssoutlet]

@lja440 

I do my best to keep the average cost of the items I sell to around $250. I sell much more expensive items, but it does give me some anxiety. That anxiety has increased due to this new policy.

[3eyedfishcatcher]

The buyer will be due 7,500 at the time the item is returned to you. I also imagine the 7,500 is now in your bank as there is no way to move funds back from your bank it sounds like they will be taking the money from future sells till the 7,500 is accounted for. It sounds like when you have sells you will have to use the 7,500 in your bank account to purchase labels. You probably will need to add the debit card from your banks account to your PayPal wallet and set it as the preferred payment method. Then instead of pending funds use PayPal for purchasing labels. 

This sounds very backwards and more difficult than giving you way to send the money bay to eBay from your checking account. I would also be concerned that eBay will deem you to be under performing because of the amount of the return and the holding of your final value fee's to charge you a higher fvf on all of the future sale you will have.

[disneyshopper]

I, too, am a TRS, and I have been selling since 2001.  I don't get too many returns, but when I did, prior to being in MP since October 2018, Paypal always had a hold on the funds until the case was resolved.

I've had 3 or 4 returns since being in MP, and the funds are held as well until the case is resolved.  As soon as the item is returned, and in the same condition as sent, I refunded, and all is well.

[vssoutlet]

@3eyedfishcatcher 

I don't understand why eBay can't just withdraw money from the linked checking account when it is due to be paid. I have no problem with that. Additionally, if they are locking up funds as they come in, to pay for the return, what happens if, in this example, the $7,500 hasn't yet been accrued? Does your MP account go into a deficit or do they then reach into your bank account?

The major issue I have with the current policy is that is locks up funds that are not yet due. I've had many buyers over the years, start a return and never return the item. I've had foreign returns take up to 60 days to complete. Unless eBay dramatically changes it's policy, funds are not due to the buyer until the return is complete (the item has been shown via tracking to have been delivered back to the seller.  Until this happens, the money isn't due and eBay should not be entitled to lock it up - particularly when it comes to sellers with a multi-year history of integrity on the platform.

[vssoutlet]

@disneyshopper 

I don't know why, but we've never been subject to a PayPal hold. When I spoke to CS, the rep told me that they have received a number of angry calls from sellers in the same position as we are. If we were in the business of selling inexpensive items, it wouldn't matter so much. But some of our items sell for as much as $20,000. We can cover returns in any amount, but, as I mentioned, a return shouldn't be considered a return until the item is actually returned. Until then, it's just a request. Money should not be withheld due to a buyer requesting a return unless the seller is new or has a bad record. I can see you are an excellent long-time seller. There is no reason to withhold a dime for returns.

[lja440]

---

@vssoutlet wrote:

@lja440 

I do my best to keep the average cost of the items I sell to around $250. I sell much more expensive items, but it does give me some anxiety. That anxiety has increased due to this new policy.

---

Yeah, at this age (60) I'm finding myself less and less inclined to roll the dice and eBays return policies defiantly contributed to that.

[dayvander9518]

I got that message too "We previously contacted you..." They had not previously contacted me or was an open case in my Overview page, or I would have immediately clicked on & resolved it.

[vssoutlet]

@dayvander9518 

Maybe they were referring you to the opening of the return itself. But I agree that it does give the feeling that we, as sellers, have ignored a message or otherwise did something wrong.

[corvettestainless]

I can understand the hold. Maybe a $20,000 refund is just the thing for a seller to say 'forget it' and close up shop before the 'return' gets there. PP used to do this when there were part of ebay. 

[vssoutlet]

@corvettestainless 

Again, I think you have to consider the seller. A new seller with a $20,000 return? Sure. A seller that does a few million a year and has been a TRS for over 10 years? Not so much. A key sticking point with regards to this policy is that eBay is not considering reputation, Reputation and customer service history means everything. A policy like this angers the sellers on which eBay depends most.

[corvettestainless]

Ayden paid ebay $70M to be the processor; Ayden doesn't know you and doesn't care if you sell $5 a year or $5B a year, it's a system they've implemented. It's the way they do business. Blanket system- if there's a 'return' coming, they are holding the $. Period. Now we all know how it works. Thanks for the heads up.