Wednesday, June 25, 2008

eBay Bumps Up Fraud Protection For Paypal Users

Late last week eBay made a feeble attempt to attract more online users by boosting its fraud protection for PayPal users. The new fraud protections, which will go into effect later this year and will be offered at no extra cost.

eBay executives, at the company's annual user conference, announced last Thursday that buyers who pay for items with PayPal (and only PayPal) will be eligible for full refunds, with no cap, if a seller fails to deliver an item as promised. Previously a buyer's coverage was capped at $200, or $2,000 if the item's seller enjoyed a particularly good reputation on eBay.

Sellers will who accept PayPal as a payment method — (as nearly all of us are forced to do) — will now also get unlimited protection against a charge being reversed. The coverage protects sellers from against claims, chargebacks and reversals due to an unauthorized payment or an item that was not received. Previously sellers' coverage had an annual limit of $5,000, and applied only for shipments to the United States, Canada and the United Kingdom.

The fraud protection is a move in the right direction for eBay, however the push for more and more usage of PayPal is not. eBay has been, and by this move looks to continue, double dipping on its fees that it is charging users. In my opinion its not right, eBay should extend the protection to more payment options as well as opening its doors to more sites than just the one they own!

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