Burdens for New / Infrequent Sellers: Potential Operation of 21-Day Hold Policy

[Disenchanted]

So you started selling on EB with your new PP account.

After your first sale you discover EB/PP pockets the proceeds of your sale for ‘up to 21 days’.

(For the advisor: Yes, we’ve seen the screen shot of the agreement. At best it is misleading…perhaps even deceptive…perhaps even worse. The operation of this policy is so punitive to new/infrequent sellers that it should be spelled out…in red or bold…with full disclosure and transparency up front as to burdens).

Make no mistake; although the policy states the money still belongs to you while it is held, you have no control over it. By any acceptable definition of ownership, PP owns the proceeds for as long as they have control over it…for as long as it is being held.

Unless you use PP’s shipping software, you are also out the shipping costs because you are expected to ship the item even though you have not realized any proceeds…and “may” not realize proceeds for some time to come.

This goes on. Your funds are held for additional transactions for any reason and, evidently (as my experience proves), for no reason.

Before you pull your knickers back up, the operation of the policy has more surprises:

You are invoiced for EB/PP fees. The proceeds of your sales are still being held by PP.  

Adding insult, PP reaches into your bank account to recover their fees even though they hold many times their fees in proceeds of your assets.

It can get worse.

The cascade: An Illustration:

You had decided to sell some assets/collateral/valuables to pay your utility bill, an unfortunate reality in today’s economy. You decide to use EB. You open a PP account. You list your items. You succeed in selling.

The buyer pays your asking price.

Now you start seeing the real impact of the hold policy. Instead of thinking your funds “may” be held if cause exists, you get the message, in RED, that all funds WILL be held now that you have “agreed” to the misleading policy. They will be held for no specific reason except that you are presumed dishonest. They “may” be released 3 days or so post verified delivery, but probably not. This is arbitrary.

[To be fair, the myth known as feedback will work magic on the release of funds if you are willing to pester your buyers to take the time to input positive feedback...akin to asking them to complete a survey].

So PP holds on to the proceeds.

You ship the asset to the buyer.

Now you are out the asset, the proceeds and the added shipping funds.

[PP holds all proceeds for no reason other than they presume you, as a new or infrequent seller, are ‘high risk’…dishonest. They continue to hold it days or even weeks after verified delivery for no articulated reason. Even if the presumption of dishonesty were somehow rational, shouldn’t that presumption switch several days after verified delivery and without buyer complaint?]

Since all of your funds are held under this policy and further, deemed unacceptable to PP (a touch of hypocrisy, perhaps?) for payment of fees (even though they have control over these funds, they will NOT use them for your benefit…even though “the money belongs to you”), PP reaches into your bank account and takes their fees.

Now you are out the assets, the proceeds, the shipping and the fees. You still have nothing to show for your sales.

[Note: It is under this umbrella of PP-induced frustration that, should there unfortunately be a buyer complaint, PP will ask YOU to be compromising!!]

The ‘taking’ of fees by PP causes an overdraft on your bank account with associated fees (even though you have more than sufficient funds being held by PP). The cost of the transaction escalates.

Perhaps due to this action, other outstanding checks bounce as well.

You can’t pay your utility bill because your funds are being held. Your account is overdrawn. Your checks are bouncing.

Your utilities are disconnected.

The bank closes your account.

The operation of the policy causes tragedy.

Had PP fully disclosed this policy, you would have: 

Sold the asset to an acquaintance at half the above unrealized sales price.

They would have paid you.

You would have paid your light bill.

You would not have incurred the PP-imposed burdens of this transaction.

Mr. Donahoe’s compensation shrank from $24 million in 2008 to a mere $10.13 million in 2009 (see proxy filed with SEC). Does this more accurately inform the intent of the seller hold “initiative”?

As one of PP’s more articulate ‘advisors’ put it: blather, blather, blather. Go somewhere else.

I can’t imagine that anyone with any self-respect would play lap-dog to this policy and its operation. The policy should insult the senses of any rational person.

Anticipated response if you question the policy? Short of the feedback thing, you will probably hear how to “expedite” the release of your funds. Watch for the term “may”. You will probably hear it is for “security” reasons.

How are you secured? Given the above, do you feel secure now? You will probably hear you agreed to the policy. Given the above, did you really? Ad infinitum. Canned phrases. 

Mr. Donahoe states emphatically that ‘we’ still believe people are basically good. Do you feel you’ve been treated with the respect that the implication of this statement demands? This is a stated presumption that is squarely at odds with the hold policy as it is applied to new/infrequent sellers.