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I am not a lawyer and this is not legal advice. It is my opinion.
eBay’s new payment system has many people frustrated and angry. Especially the “old guard” of eBay sellers, many of whom have been on the platform for 20 years or more and remember the good old days.
In fact, many people have dubbed the transition the “eBay Managed Payments Disaster.”
Some people even feel that eBay has gone above and beyond their usual incompetence and is actively scamming people. Many people have reported not being able to get their money, receiving less than they planned in their payouts, having returns automatically withdrawn from their bank account, etc.
Because of this, several outlets have reported leaving eBay in droves and have considered the idea of an eBay Managed Payments Class Action Lawsuit.
But is it true or feasible?
As far as we are aware, there is no lawsuit related to eBay Managed Payments system and it is unlikely that such an action will take place. It is far more advisable for sellers to work with eBay to find solutions to the issues surrounding the new payment system.
Common Issues With eBay’s Managed Payment System
Believe it or not, some people actually like the new managed payments system. However, no one can claim that it is completely without issues.
Issues Connecting With Your Bank. Many people are leery of giving eBay their banking details. However, many people just haven’t been able to as they can’t get their bank to connect. While most of these issues have been fixed, you can still avoid the issues altogether by using one of the best banks for eBay’s managed payments.
Slow Payouts. This is, in my opinion, one of the most valid criticisms of the new system. Nobody wants to wait longer for their money and have to pay for shipping out of pocket. However, there doesn’t seem to be a cure for this issue. Using a better bank will mean that you get your money faster but it will still be a couple of days. You’ll just have to adjust your business practices to make this work.
Unexpected Withdrawals. Signing up for eBay Managed Payments is a two-way agreement between them and your bank account. Yes, they will make deposits, but if you have returns, hold, or excessive fees they can withdraw from your bank account to bring you back to zero. If you are on top of your eBay store any withdrawal they make should not take you by surprise.
Alternatives to eBay Managed Payments
If you want to sell on eBay you have to play by their rules. This has lead to some people deciding to leave the platform and many other just adjusting the way they do things.
This is the case every time the platform makes a change (and there have been many). You adapt or you die off. In fact, when eBay shifted to PayPal, tons of people were mad and wanted a way to sell on eBay without PayPal. Change will always infuriate a portion of users.
There is currently no alternative to eBay’s Managed Payment System for sellers on their platform. As they shift away from using PayPal as their processor, sellers who wish to continue selling must accept the terms of Managed Payments to receive payouts and continue listings items.
If you find the situation untenable, switching platforms might be your best option.
However, be aware that the changes eBay has made make it more similar to all the other platforms on the market so you’ll be hard-pressed to find anything like the “old eBay.”
My Experience & Opinion
If you want my honest opinion on the Managed Payments System and the possibility of a lawsuit, here it is:
Just deal with it. eBay is still a great opportunity for sellers and, if this is a deal-breaker for your business, your business didn’t have much of a future anyway.
A class-action lawsuit over eBay’s Managed Payment system is ridiculous.
I do know, however, that the extra hoops to jump through (and the payment delay) is enough to discourage many smaller sellers. I understand that and don’t blame you. You can always try a platform like Mercari or sell your items locally instead.
For larger volume sellers, remember that the wheels turn slowly when it comes to fixing issues on a huge platform like eBay.
For example, eBay/UPS made a huge mistake on our shipping invoice one month and charged us an extra $2,900! Yes, it was a disaster for our business.
The people we spoke with at eBay were nice and semi-helpful but we still had to spend more than 10 hours on the phone trying to get answers and solutions. In the end, we gave up and wrote off the money.
However, it all turned up almost 3 months later. As I said, the wheels turn slowly.
Now, I know that eBay isn’t perfect. However, if you choose to swim in their pool you have to abide by their rules. For now, the positives outweigh the negatives and we will continue to be eBay sellers.
Most sellers, it seems, have come to the same conclusion. Contrary to popular belief, eBay is not shrinking or dying. While eBay may be losing some sellers, their overall trajectory is positive. eBay has a lot of churn (think of it as turnover) and the constant influx of new sellers is typically large enough to outweigh the outflow.
Now, we don’t love the system. You can check out our full Managed Payments Review here.
How To Get Your Issues Fixed
So, if you want to remain an eBay seller, be solution-minded rather than reactionary (such as thinking of suing eBay).
The best way that you can receive redress for any issues that have come up is simply to talk to eBay.
Now, here’s the issue, you’ll have to be persistent.
The first people you get on the phone are able to fix only basic issues. Ask to speak to their supervisor if you have a serious problem. When we were getting our shipping overage fixed we discovered that there are half a dozen departments, each with different permissions and abilities.
So call back until your problem is solved. Making money on eBay is worth it!
To illustrate the point, check out how we turned $100 into $1000 within 4 hours on eBay!
At the end of the day, you’ll have to decide if selling on eBay is still worth it for you.
However, I can tell you that an eBay Managed Payments Lawsuit probably isn’t worth it for anyone and just isn’t going to happen.