More insanity on PayPal

I have noticed that sellers who use PayPal on eBay are now asking  for positive eBay feedback from the buyer before they send the item out. This is because PayPal appears to have a new policy. Basically, it  prevents you from withdrawing the funds for 21 days unless the buyer leaves positive eBay feedback.

As I mentioned in my previous posting, I have sold a couple of items in the last few weeks. This payment delay has happened twice. The feedback mechanism works on goodwill: users only leave feedback if they had a genuine experience they want to share with other buyers. If people only leave feedback in order for the seller to ship them an item then the feedback mechanism is nonsense.

Now two weeks ago, after I had made an eBay purchse and paid in full via PayPal, the seller explained his situation, which I sympathised with. He suggested three options: Either I leave positive feedback first; or he cancel the auction or I pay in cash.

We decided cash was the best option (I wanted the product). The seller refunded my transaction in full, we met and I exchanged cash for my purchase. When I finally met the seller it occurred to me how utterly useless PayPal is at mirroring the way people do business. The seller seemed a genuinely nice person: I certainly trusted him enough to part with the cash.

It looks like PayPal has gone bonkers. It has Buyer Protection, so why is there a need for this additional barrier, which prevents legitimate users from getting timely access to their funds. I’m sure  PayPal’s policy contravenes UK banking legislation.  I can’t see how much of a dent this will make on its efforts to combat organised crime. Such behaviour only hurts the little people, like you and me.

There is a real opportunity for someone to develop a better payment system, one that uses real people to make risk assessments, rather than the idiotic one used at PayPal which appear to rely on seemingly random assumptions about fraudulent transactions, that have no bearing on the way business is conducted in the real world.