Angus Kidman19 August 2008, 2:10 PM
eBay's decision to only extend refunds to customers of a failed eBay seller as a "courtesy" demonstrates that the 'PayPal guarantee' is far from rock solid.
The collapse of "eBusiness Supplies" — one of eBay's largest Australian sellers — in late July has proved a fresh PR nuisance for eBay in a year that's already seen the auction giant's reputation take a major battering. eBusiness Supplies' move into receivership left up to 4000 customers in the lurch.
Customers who had paid for the purchases using the eBay-owned PayPal service believed that they would be entitled to a refund under PayPal's Buyer Protection scheme, which proclaims that: "PayPal will pay you the maximum amount of coverage for which your transaction qualifies" in the event of an undelivered purchase.
In late July, PayPal said that it would set up a fund to ensure buyers who had unsuccessfully ordered goods from eBusiness Solutions would receive refunds.
"The PayPal fund will be available to buyers who have made recent purchases from this seller on eBay," a posting on eBay's noticeboard said.
However, disgruntled customers are now discovering that eBay doesn't think that such refunds are obligatory, even if goods haven't been delivered. "PayPal will be refunding buyers who made a purchase from this seller within the last few weeks as discretionary payment, which is a credit initiated as a courtesy and not compelled by legal right," one seller was told after enquiring about the status of their refund.
APC contacted a PayPal spokesperson to ask if this remark represented standard policy, but was told that the case would have to be investigated individually. At the time of publication, no further comments were forthcoming from PayPal, and no details of what would qualify customers for refunds had been provided.
The fact that transactions made via PayPal were said to be the safest available option, even in the event of fraudulent seller activity, was one of the central selling points in eBay's failed attempt to make PayPal the sole means of payment for eBay transactions. The collapse of that scheme is widely viewed as having damaged eBay's reputation locally, especially with sellers, though it remains the dominant player in the online auctions market.