EBAY CEO Sells 50k Shares, Exercises Worthless Options in Front of Q2 Earnings

16 Jul

This post is little more than the musings of a past eBay Platinum Powerseller with some commentary about the state of the auction world.  It is just one opinion and I am certainly not certified to give any financial or stock advice, so take from it what you will.

Let’s Do Lunch

Anyone who knows me in person knows that I rarely talk about my business or what it is I do.  Being a “professional eBayer” is extremely interesting to people, mostly because everyone’s dream is to quit their job and make millions while working from home.  That fact is evident in those signs you see proclaiming you can “make 30k a week” if you simply call Juan at 1-800-rip-me-off.  People are always asking me the same questions: “How much do you make?”  “Where do you get the stuff you sell?”  “Can you help me do it?”  I used to enjoy talking about eBay back when I was selling Creative Muvo MP3 Players my freshman year in college.  My father’s favorite story about me is how I began on eBay – taking apart MP3 players, selling the Compact Flash card that was inside, inserting a smaller Compact Flash card into the MP3 players, reprogramming it, and reselling the MP3 player.  Back then, the Muvo cost $100, but it had a 4GB Compact Flash card inside of it that was worth about $200 and then the MP3 player could be reprogrammed with a smaller, cheaper card and resold for $50 or more.  I made about $20,000 profit in eight weeks – not a bad sum for an 18 year old attending college full time.  Schemes as simple and profitable as that are rare these days.  Lord knows eBay and PayPal would shut me down in an instant if I started moving that kind of product in such a short time today, with the dozen feedback and a new PayPal account like I had back then.

The eBay golden years, a time I fondly reminisce about now, were back in 2003 to 2005.  I don’t know much about stuffing money in the Caribbean, but I like to think that eBay back then was as easy and profitable as moving money interest free to the Caymans for characters like Tony Montana in Scarface.  Everyone’s story is different I’m sure, but those were my best years.  Sure, I’ve had plenty of success since then, but I doubt anything will ever be as fun as drinking beer, reprogramming MP3 players, and moving $1,000 a day from PayPal to my bank account.  Maybe I am just that nerdy, but it’s hard for me to envision a time in the future where things will be as care free as they were back then.

Getting Harder

You don’t have to be a rocket scientist to figure out things are more complicated in the auction world than they were six or seven years ago.  I keep up to date with just about everything that’s going on in the eBay world and even try my hand at writing tutorials and in-depth analysis from time and time, but even I have trouble figuring out seller releases and new eBay rules and regulations.  I’m tired of being treated like I’m stupid and tired of the eBay brass trying to trick me into thinking their new policies and stipulations will somehow benefit me.  I’m not a big complainer and if you’ve read this website over the last year or so, you would know that I’m actually one of the most pro-eBay “bloggers” on the internet, outside of any eBay owned blog of course.  There’s no doubt that eBay’s core business plan has moved away from people like you and me, in favor of conglomerates and businesses looking to unload stuff they would be embarrassed or unable to sell on their own websites.  As I personally move further and further away from eBay, I am not as concerned as I might be if I still relied on it for the majority of my revenue.  If things were still as easy as they used to be, I would probably have an even larger presence on eBay than I did in 2005, but that is not how things have come to pass.  I don’t have any ill will or the anger that many people seem to possess, perhaps because I feel like I’ve already made my money, but I do find solace in the fact that eBay is hurting even more than I ever will.

Not Just the Golden Age for Me

I spoke earlier about how the years 2003 through 2005 were my best years on eBay.  While I technically made more money in 2006 and 2007, it wasn’t as fun or as fulfilling as those first couple of years.  Not coincidentally, those same years were also eBay’s most successful.  On January 2, 2003, eBay stock was trading at a paltry $16.88.  Exactly two years later, the same share of eBay stock was worth $58.89, an increase of about 250%.  I can only imagine the happiness Meg Whitman must have felt that New Year’s, having built a company that at one time sold for $1 a share into a company with a market capitalization of more than 50 billion dollars.  It’s a truly amazing story of ingenuity, foresight, and a belief that anything and everything is possible.  Of course, eBay quickly fell on hard times.  Just one month after the stock was trading at an all-time high of nearly $60, the share price fell to under $40 just one month later on January 31, 2005 and was just a touch above $30 by the end of April 2005.  Fast forwarding a bit to 2009, I’m sure we’re all aware of eBay shares falling under $10 in March 2009.  They have since rebounded all the way back to as much as $28 in March of 2010, before falling back to under $20 just last week.

Tired of the Amazon/EBay Comparison

My biggest “pet peeve” about the eBay/Amazon/auction blogosphere is our obsession about comparing Amazon and eBay as if they are somehow in direct competition or even similar companies.  Amazon and eBay are so different that you might as well add British Petroleum or GlaxoSmithKline to the mix and compare Wall Street results of all four.  Ever bid on an auction at Amazon?  Ever seen an MP3 available for purchase from eBay’s Music Store?  Ever bought a product directly from eBay?  Ever used Amazon Payments on Dell, Newegg, or any other major internet retailer other than Amazon?  Ever purchased eBay’s e-reader device?  There is just no comparing the two because their business models are so different.  How much of Amazon’s revenue comes from third party sales?  We will probably never know.  I could go on and on about Amazon, but it will have to wait for a future post.

EBay is a Stronger Company than Amazon

At the beginning of this year, I wrote an article about the many ways in which eBay is a stronger company than Amazon.  Titled, “EBay is a Stronger Company Than Amazon and I Can Sort of Prove It,”  I went into detail about how eBay has always been a more profitable company than Amazon and probably always will be.  Amazon’s market cap might be roughly twice that of eBay, but it’s also trading at an astonishing 53 times earnings.  This is an absurd price to earnings ratio and part of the reason why Bank of America and Merrill Lynch cut Amazon’s rating from buy to hold just yesterday.   Amazon is going to be even more pressured in the coming months with significant competition from Sony, Barnes & Noble, and Apple in the e-reader business and Apple will continue to make more money in media sales than Amazon could ever hope to.  Not to mention the fact that e-readers will never catch on with university students because it’s impossible to take notes or highlight important passages with a Kindle device, not to mention attach sticky notes or quickly flip back and forth between pages.    Considering Amazon made such a big deal out of the “student version” of the Kindle, they must have thought it would be a viable tool and a significant market for the device.  Like Amazon Payments, it looks like the Kindle may turn out to be a bust for the company.  Of course, Amazon never admits to how many they have actually sold, so we may not know until they stop selling it.

John Donahoe Sells 50K Shares, Exercises Worthless Options in Front of Q2 Earnings Release

John Donahoe has been selling 16,667 shares of eBay stock on the last Wednesday of the month for each of the last three months, probably as part of his contract or an expiration date on the sales or something.  Over the last six months, eBay insiders have sold 811,161 shares and purchased just 5,400.   The eBay haters may find solace in the fact that John was forced to sell 24,000 shares of eBay stock on May 11th, 2010 with total proceeds equaling $0.  Nothing worse than worthless stock options, except for maybe the $0 paycheck many past eBay sellers are getting from the company these days.

Where Do We Go From Here?

This next week will be an interesting one.  EBay reports earnings on Wednesday July 21 and Amazon reports the following day.  Standard & Poor’s reiterated a “Strong Buy” and $32 price target for eBay on July 14, even after the 3.8 billion dollar patent infringement case came to light. Amazon is probably on the way down, but you never know what their report will look like after several key acquisitions over the last year, including Zappos and Woot.  I am not too worried, considering I own shares of neither stock.  But it has always intrigued me, so I will continue to watch.

Take care and good luck shill bidding, Josh

How to Withdraw Money From Limited PayPal Account Before 180 Days

10 Jul

How To Withdraw Money From A Limited PayPal Account Before 180 Days Pass

Introductory Paragraph

One of the most damaging things that can happen to an eBay seller is getting hit with the dreaded “Notification of Limited Account Access.”  PayPal will limit just about every seller who does more than $2,000 worth of sales per month and even limit sellers who sell less, depending on numerous other factors.  I’ve written in length about ways to minimize limitation risk in past articles, as well as how to restore account access once a limitation is placed.   However, to restore account access you’ll likely have to provide personal documents and information, including your Social Security number, credit card information, a copy of your driver’s license, supplier contact information, invoices for the products you’re selling, proof of delivered goods, and succumb to a personal credit check.  Even if you submit all of these documents, it’s still possible that PayPal will deny your limitation appeal and keep your account permanently limited.  They won’t tell you why either, except for one of only three or four canned responses.  In addition, some people may not be comfortable giving out all of the information PayPal requires or may not be able to provide it.  There’s also no guarantee PayPal will even give you an opportunity to appeal the limitation.  PayPal routinely blocks accounts permanently, with no reason provided.  Restoring account access is a painfully frustrating experience that will take at least a week to resolve, if not more.

What Happens If I Can’t Restore Account Access?

PayPal reserves the right to limit a PayPal user’s access to their account and freeze any funds in the account for 180 days.  Here it is, right out of the user agreement:

We may close, suspend, or limit your access to your Account or our Services, and/or limit access to your funds for up to 180 Days if you violate this Agreement, the PayPal Acceptable Use Policy, or any other agreement you enter into with PayPal.

As well as:

We may hold your funds for up to 180 days if reasonably needed to protect against the risk of liability.


10.8 Acceptable Use Policy Violation – User Fines. If you violate the Acceptable Use Policy then we may hold your funds up to 180 Days, fine you up to $2,500.00 USD for each such violation and/or take legal action against you to recover additional losses we incur. You acknowledge and agree that a fine up to $2,500.00 USD is presently a reasonable minimum estimate of PayPal’s damages, considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated and the anticipation that proof of actual damages may be impractical or extremely difficult. PayPal may deduct such fines directly from any existing Balance in the offending Account, or any other PayPal Account you control.

The bottom line is that PayPal can, and will, hold any funds remaining in the PayPal account for 180 days if you are not able to resolve your limitation.  On top of that, you will be unable to send funds, receive funds, or close your account at any time in the future.  You will receive an email similar to the following if your account has been selected for permanent limitation:

Notification of Limited Account Access RXI034

Hello Meg Whitman,

As part of our security measures, we regularly screen activity in the
PayPal system. During a recent screening, we noticed an issue regarding
your account.

We are very sorry, but in accordance with the PayPal User Agreement, we are
no longer able to have you as a customer.

We have had to close your account for the following reason:

We have observed activity in this account that is unusual or potentially
high risk.

We apologize for any inconvenience this account closure may cause. You may
still log in to PayPal to view your transactions history and personal
information for a limited time.

The funds in your account will be held for 180 days, due to the risk of
outstanding chargebacks and complaints. After 180 days, any remaining funds
will be available to you for withdrawal.

For your protection, we have limited access to your account until
additional security measures can be completed. We apologize for any
inconvenience this may cause.

To review your account and some or all of the information that PayPal used
to make its decision to limit your account access, please visit the
Resolution Center. If, after reviewing your account information, you seek
further clarification regarding your account access, please contact PayPal
by visiting the Help Center and clicking “Contact Us”.

We thank you for your prompt attention to this matter. Please understand
that this is a security measure intended to help protect you and your
account. We apologize for any inconvenience.

PayPal Account Review Department

How To Withdraw Money From A Limited PayPal Account

First of all, check the Resolution Center to be sure that you do not have the ability to withdraw funds.  All PayPal limitations are different and you may get a “soft” limit before the permanent limitation sets in.  Withdraw all of your money to your bank account immediately if you do have the ability to withdraw.  If you do not have the ability, then try to restore account access by completing the steps with the help of this guide.  If that fails, then your goal becomes getting the money out of the account as quickly as possible.

First of all, it’s unlikely that PayPal will release any funds until after at least 45 days have gone by since you received the initial notification of limited account access.  This is because buyers can file a PayPal dispute up to 45 days after payment was sent and PayPal wants to be sure they have your money to cover those refunds.  After 45 days has passed, send an email to executiveoffice@paypal.com containing something similar to the following:

Subject: Status of Limited PayPal Account Withdrawal


Dear PayPal,

My account has been limited since (date of first received limitation email) and I have not had the ability to withdraw the (insert amount) that is remaining in the account.  When will these funds be made available to me?

I would appreciate any help you can provide.


It may take a while to get a response.  The usual turn-around time is about five days.  Your initial success depends on how long your account has been limited and whether there have been a lot of complaints or other problems with the account.  If the account has been limited for more than 120 days then it’s likely you’ll receive an email with the subject “Your PayPal Funds are Eligible for Withdrawal” along with a response to your original email with a case number in the subject line along with your original subject.  In the example above, it will look something like “Re: Limited PayPal Account Withdrawal (KMM156434026391L0KM) :ppk1.”  If the account has only been limited for a short time then it’s likely you’ll receive a response similar to the one below.

Dear Poor Seller,

My name is Carrie and I work for the office of Executive Escalations. I
want to personally thank you for contacting PayPal. Your concerns were
recently forwarded to our office for review in the hope that we might be
able to assist you further.

A review of your Account indicates that PayPal elected to sever the
business relationship due to excessive risk.  Due to that risk, the funds in the Balance will be held for 180 days from the date the limitation was placed (Date).

As stated in section 10.4 of our Legal Agreement outlines that if we

have reason to believe that you have engaged in any Restricted
Activities, we may take various actions to protect PayPal, eBay, a User,
a third party, or you from Reversals, Chargebacks, Claims, fees, fines,
penalties and any other liability. The actions we may take include but
are not limited to the following:
a.      We may close, suspend, or limit your access to your Account or the
Services (such as limiting access to any of your Payment Sources, and
your ability to send money, make withdrawals, or remove financial
b.      We may contact buyers who have purchased goods or services from you,
contact your bank or credit card issuer, and warn other Users, law
enforcement, or impacted third parties of your actions;
c.      We may update inaccurate Information you provided us;
d.      We may refuse to provide our Services to you in the future;

e.      We may hold your funds for up to 180 Days if reasonably needed to protect against the risk of liability; and
f.      We may take legal action against you.

PayPal, in its sole discretion, reserves the right to terminate this
Agreement, access to its website, or access to the Service for any
reason and at any time upon notice to you and payment to you of any
unrestricted funds held in custody for you. You can review PayPal?s
Legal Agreement by clicking the ?Legal Agreements? link at the bottom of
any PayPal web page and then clicking the ?User Agreement? link.

I apologize if you feel you did not receive the level of service you
expected of PayPal.  We appreciate your willingness to share your
experience with us so we may evaluate our policies and procedures to
ensure we provide good customer service to everyone contacting our
company.  Your feedback is valuable and presents an opportunity to
evaluate and continuously improve the level of service we provide to our

Again, I apologize for any inconvenience caused in respect of this
matter.  If you require clarification on any of the issues raised,
please feel free to contact us directly at

Executive Escalations
PayPal, an eBay Company

This is their standard copy/paste email response.  If you get this kind of response then you will need to press harder.  It’s unlikely PayPal will release all of the money at once in this situation, so you should try to get half of the funds transferred to your bank account at this point.  In this email, you want to sound serious and professional.  Don’t threaten to sue or assault anyone.  Reply directly to the email you received before with the case number in the subject.

Dear (name of person who sent the last email from the Executive Office),

I appreciate the level of risk PayPal is taking on by offering their services.  My account has had zero credit card chargebacks at any time and I have zero open disputes and claims.  There is no justification for holding (insert amount of money) since (insert date).  From the research I have done, there is no legal justification to hold my money for this amount of time either, regardless of what your terms of service say.  I will be filing a complaint with the California State Attorney General, Federal Trade Commission, Better Business Bureau, and (insert local congressman’s name).  I will forward the complaints to your office as well.  I am a reasonable person and all I am asking for is the release of half of the funds now.  If you look over my account I am sure you will see that there is zero risk of loss to PayPal.  Thank you for your attention and I am sorry we were not able to come to an amicable solution.

(Your Name)

EBay/PayPal read everything I put on this website within 20 minutes of it going up.  Take a look at the information I have in the email examples above and put it in your own words.  If you just copy/paste it then they’ll know where you got it from and won’t take you as seriously as they would if they think it’s an original email.

An email like this example will show them that you mean business and know what you’re talking about.  A lot of people will start threatening class action lawsuits and other ridiculous threats.  PayPal knows 99.999% of people are going to do nothing.  Your promise to file complaints with those agencies is reasonable and something you can actually do.  Wait about two days for a response.  You should get one much faster than it took to get the first one.  Ideally, you’ll receive something like the following:

Dear Josh,

Thank you for your response. I apologize for any confusion in regard to this matter and I can see how this situation could be frustrating. I have reviewed your PayPal account and your recent inquiry. Based on our review we are prepared to make a one-time exception, and release $3,000.00 USD. The funds will be manually transferred from your PayPal account balance to the Confirmed bank account on file. Please allow one to two business days for the transfer to complete. Once the funds have left your PayPal account, please allow three to four business days for the funds to reach your bank. Due to the inherent risk of Reversals, the remaining balance will be held for the full 180 days. You may log into your PayPal account after January 1, 2010, and withdraw the remaining funds.

Again, I apologize for any inconvenience caused with respect to this matter.  If you have additional questions, or would like further assistance, please feel free to contact me directly at 402-952-8338 or email me at executiveoffice@paypal.com.



Executive Escalations

PayPal, the safer, easier way to pay online

It usually takes about 24 hours for the money to leave your PayPal account and the usual two to four days for it to show up in your bank account.  They may also ask for confirmation of which account you want the funds transferred to.  If they want you to call, try emailing them the answer to their questions unless you want to get on the phone with them.  Don’t give out the whole bank account number – the last four digits is fine.

If you still get denied, follow through with the complaints.  The reason you got denied is probably because it hasn’t been long enough since your account was limited.  There is a lot of fraud that goes on through PayPal and they have no idea if you’re “one of the good guys.”  If you still get denied and it’s been 90 days or less then try again around the 90 day mark.  Chances are that PayPal will be more comfortable releasing some of the funds at that point, provided you don’t have any complaints or credit card chargebacks.

California State Attorney General Complaint Form: http://ag.ca.gov/contact/complaint_form.php?cmplt=CL

Better Business Bureau Complaint Form


Federal Trade Commission Complaint


If you don’t know the name of your congressman, simply “Google” your city and “congressman” and it should be the first result (if your congressman is any good).  There will be a phone number and an email address for you to forward your complaint.


There are very few people at PayPal that have the authority to make decisions.  I have fairly good intelligence that says there are only about six people in Omaha, Nebraska that decide whether accounts are reinstated after a limitation.  Computers do almost all of the work, but a human makes the final determination.  Your best chance of getting your money prior to the 180 day mark is the process I have explained above.  Calling the 1-800 number and trying to email random people at PayPal won’t do you much good.  The chances of getting anyone on the phone that can actually do anything about it are just about zero.  The trick is always to stay calm and never say anything you can’t follow through with doing.  If you have any additional problems you’re welcome to post here or email directly at my email listed in the “About Me” section above.  Of course, I will never ask you for any personal information.  I don’t even want to know your last name, let alone your password or banking information (no offense).  Don’t give it out to anyone that attempts to contact you directly either.

Good luck and I would be happy to help if you have any additional questions.

Categorized Index of EBay PayPal USPS Guides on This Website

28 Apr

Here is a categorized, alphabetical list of all of the guides, articles, news, rants, etc. that are featured on this website.  I have italicized the ten most popular articles and a couple of my favorites.  The three most popular articles are the one on restoring a PayPal account after it becomes limited, the one about USPS Delivery Confirmation, and how to raise the withdrawal limit of a PayPal account without a Social Security number or credit card, with about 1,000 views per month each.

EBay Helpful Guides For Listing, Selling, Surviving

Block an EBay Bidder in a Specific Country Using Site Preferences

Create An eBay Fixed Price Multiple Quantity Listing To Maximize Views and Profit

eBay Auction Vs Fixed Price Fee Structure – The Best Way to List

EBay Gallery Image Upload Errors Reported

Free Feedback and eBay Bidding Tools from Toolhaus.org, Goofbay.com, and Sellerdome.com

How Do I Schedule An eBay Listing In Advance?

How Many Listings Are There on eBay and Other Alternative Auction Sites?

How to Create the Perfect eBay Item Title

How to Easily Contact eBay Live Help Chat

How to Effectively Use eBay Feedback Revision (Formerly Mutual Feedback Withdrawal) to Get Negatives Removed

How to File an eBay Unpaid Item Strike or Cancel A Transaction

How to Raise Your Listing and Gain More Visibility in eBay Best Match Search

How to Remove Negative Feedback on eBay – And Deal With Those You Can’t

How to Use eBay Gallery Picture and Gallery Picture Plus Upgrade

How to Use Inserts in the Item Description to Save Time Listing on eBay

How to Use Texter to Save Time Creating eBay Listings

My eBay Item Isn’t Showing Up in Search Results – What’s Wrong?

Understanding eBay Selling Limits – What They Are and How to Get Around Them

Using the eBay Subtitle Upgrade to Maximize Views and Guarantee the Highest Price Possible

What Should My eBay Payment and Shipping Terms Be?

What Starting Price Should I Set for My eBay Item? An Introduction to eBay Pricing Strategies

EBay Policy

EBay Accused of Manipulating Detailed Seller Ratings in Order to Deny Sellers Fee Discounts

EBay Finally Addresses Recent Customer Service Woes Through E-Mail Contact

EBay Finally Figured Out Anonymous Email System? Nahhhhh

EBay Search Broken Like Really Broken Not A Euphemism

EBay Search Visibility Report and Best Match Analysis Broken, Worthless

EBay Spring 2010 Seller Update Revisited – Ebay’s Highest Fees Ever

EBay Using Policy Violations to Strip Users of Powerseller Status and Right to Fee Discounts

eBay’s “5 Free Insertion Fees Every 30 Days” “Discount” Costs Sellers More Money In Fees

EBay’s Real Problem – An Erosion of Trust Between Buyer and Seller

How to Return an eBay Item to the Seller Part 1 – Am I Eligible?

How to Return an eBay Item Part 2 – Contact The Seller and Return Shipping

Important eBay Seller Announcement

MC042 EBay Reinstates Thousands of Suspended Accounts

Spring 2010 Fee Update – EBay Thinks We Won’t Notice

Tend EBay’s Garden for Free and Experience New Search

PayPal Guides

A Tutorial on How to Use Paypal MultiOrder Shipping Efficiently to Save Time and Money on Postage

Beware of PayPal Personal Account Gift Payment Scam

Contact Paypal Executive Escalations Department By Email

eBay and Paypal Seller Protection Policy – What’s Really Covered

EBay Expands 21 Day Payment Hold Policy To All Sellers?

How to Enable Paypal Merchant Rate Pricing and Save Money on Paypal Fees

How to Fund PayPal Account With Cash Via MoneyPak – No Credit Card or Bank Account Required

How to Remove Paypal Limitation and Restore Account Access

Paypal 21 Day Payment Hold on eBay Sales – What It Is and How to Deal With It

Paypal Policy Update Coming June 3 – July 1, 2009

Paypal Rolling Reserves Rolling Out For Many July 23, 2009

Verify and Lift Limit on Paypal Account Without Credit Card or Social Security Number

Shipping Tips, Guides

Can I Use My Own Box to Ship USPS Flat Rate?

Can USPS Signature Confirmation Be Used to Ship to P.O. Box?

Does USPS Require A Signature For Delivery?

Guide Roundup – How to Ship on eBay and Paypal

How to Print USPS International Shipping Label With Required Customs Forms

How to Use USPS Signature Confirmation Effectively with eBay and Paypal

Is It Less Expensive to Ship an Envelope or a Box With USPS/Fedex/UPS?

Print USPS Small and Large Flat Rate Box Labels With PayPal On EBay

The Limitations of USPS Delivery Confirmation

The Perils of International Shipping With eBay and Paypal – A Guide to Successful Shipping Practices

USPS Shipping Tips and Tricks For Buying and Selling With eBay and Paypal

Utilizing USPS Priority Mail Flat Rate Boxes For Your eBay Business

What the May 11, 2009 Postal Rate Increase Means For Your eBay Business

When to Buy Shipping Insurance Part One – The Buyer’s Perspective

When to Buy Shipping Insurance Part 2 – The eBay Seller’s Perspective

Stock and Corporate News

As Expected, eBay Inc. Results Exceed Expectations

EBay Beats Estimates – Revenue, Earnings, and Guidance Improve

EBay Is A Stronger Company Than Amazon – And I Can Sort Of Prove It

Where is eBay Headed in 2009 and Beyond? Today’s Earnings Report May Give Us Some Ideas


The Great October USPS Track and Confirm Debacle

USPS Delivery Confirmation Labels Erroneously Returning “There Is No Record of This Item”

USPS Prices Going Up, Staying the Same, Going Down in 2010

USPS Track & Confirm Search Results Online Update

MC042 EBay Reinstates Thousands of Suspended Accounts

22 Apr

EBay Wants You Back (For The Second It Takes You To Pay Them, Anyway)

EBay has been busy the last few days reinstating what appears to be thousands of previously suspended accounts.  Why would eBay allow thousands of users it had previously deemed undesirable back on the site to defraud even more helpless victims?  That isn’t necessarily what eBay has in mind.  Instead, eBay is trying to persuade account holders with long overdue fees to finally pay up.  You see, eBay’s biggest problem isn’t fraud or user dissatisfaction – it’s people refusing to pay their fees.  By sending out emails offering to restore users’ accounts, eBay is promising a potentially clean slate.  It’s basically what they’ve always promised – pay us and we’ll unsuspend you.  In fact, that’s exactly what they say at the end of every email they send trying to collect money, “If this past due balance is the only reason for restricting your account, it will be reopened for bidding and listing when your full payment is received.”  What’s different about this tactic?  They actually state that they have reinstated the account prior to receiving payment.  Of course, once the user logs in, they will see that their account is still suspended.  Here’s what the email says:

MC042 MegWhitman, we’ve reinstated your account

Hello, MegWhitman (californiagovernor@hopenot.com)

We’re happy to let you know that we’ve reinstated your account. Your account should now be in good standing as long as you don’t have any other suspensions.

Please note that although your account is now active, any listings or bids canceled by your account suspension won’t be reinstated.



How can an account simultaneously be reinstated, in good standing, and still suspended at the same time?  Let’s have a look at what’s really going on here.

EBay Doesn’t Know If You Actually Exist

While certainly not the majority of eBayers, a great number of eBay users use fake names, addresses, phone numbers, and banking information to conduct business.  EBay has a terrible time figuring out who is real and who is fake and tend to suspend as many honest people as they do potential scammers.  In order to increase their chances of weeding out the frauds, eBay has begun using public records to check whether new users are likely to be who they say they are.  Many, if not all, new sellers will receive a “soft suspension” depending on what information they use to register their account.  This comes in the form of the following email:

MC011 MegWhitman: eBay Account Update — Action Needed

We’ve noticed some activity on your account, and we need your help in verifying some information. We’re sorry for this inconvenience, but while we’re working things out with you, you’ll have limited access to your eBay account.

Depending on the situation, some of your listings may have been removed. Also, you may not be able to create new listings for certain items while this is being resolved.

Please look for a follow-up email in eBay messages; it should be arriving soon. That email will contain information on what you need to do next to help us remove the restriction on your account,

We appreciate your help in getting this resolved as quickly as we can.


eBay Customer Support

Before that happens, users may receive a phone call from eBay with a representative that wants to ask verification questions.  If you don’t answer that phone call, you’ll get the following email with the subject: FR0RC002 eBay is trying to contact you and the text:

Hello Meg,

Thank you for selling on eBay. In order to maintain a safe and secure
online marketplace, eBay may require additional verification from
sellers from time to time.  We would like to arrange a call to discuss
activity on your eBay/PayPal account.  Please let us know when you are
available to receive a call from us.

Our office is open from Monday to Friday, from 8 A.M. to 3:30 P.M. MDT

Please respond to this email within 48 hours.

We appreciate your cooperation in verifying your account as quickly as
possible, and we welcome you as a valued member of our trading
community. Thank you for your cooperation.

Kind regards,

eBay Trust & Safety

Once they get you on the phone, eBay will ask you similar questions to the ones Experion would ask if you were trying to retrieve your credit score online.  They’ll ask about past addresses, whether you have a mortgage, and which bank you used to get your mortgage.  They’re odd questions if you’re not expecting them, but if you refuse to answer or question who’s calling, chances are you’ll get the previous MC011 email with the soft suspension.  The answer to these questions is almost always “None of the above” so if you’ve managed to create an account and you don’t know the answers then that’s your safest bet.  Either way, be prepared to answer multiple choice questions about your past addresses and credit history.  If you fail to answer the questions correctly or don’t respond, eBay will send you an email similar to the following:


We would like to inform you that selling limits have been placed on your
account. eBay occasionally places selling limits on accounts to keep the
trading community safe.

We’d be happy to review your account and, if possible, adjust your
selling limits to allow additional activity to take place. In order for
us to review your account, I need to ask you to submit all of the
following information by fax (fax number below):

-A readable copy of the driver’s license, front *and* back, or
other government-issued ID.

-A copy of a recent credit card statement. Your billing address
should be visible, along with the first and last four digits of your
credit card number.

-Documentation that shows that you purchased or are in possession
of the item(s) currently listed for sale on eBay. If you have many items
for sale, we just ask that you send two or three invoices.

-If your ID and credit card statement do not show the address registered
to your eBay account you will need to provide specific documentation,
such as a utility bill or receipt (if address is for a mail forwarding
service) that does.

Important –

-Make sure that your name and User ID appears on each document that you
— After you send this information to us, please reply to this
message with a brief note letting us know that the information has been

Where to Fax:

Attn: Seller Vetting
US number: 1-801-206-7562
International number: 001-801-206-7562

Where to Mail:
Attn: Seller Vetting
PO Box 1469
Draper, UT 84020

This is eBay’s way of figuring out exactly who you are so they can collect money from you should you fail to pay at a future date.  Unfortunately for eBay, the information they ask for can be easily faked, although it does make it more difficult for casual fraudsters to create numerous accounts using fake information.  Luckily for scammers around the world, it doesn’t stop the best, many of whom continue to thrive selling counterfeit items or goods that they have no intention of delivering on eBay.

It’s Hard to Collect Money from Someone That Doesn’t Exist

EBay uses a variety of tactics to try to get users to pay their fees.  Unfortunately, it’s exceedingly difficult to collect from someone/something that doesn’t actually exist.  After a user’s account is past due, eBay will send a few gentle reminders asking nicely for payment with the subject, “eBay Payment Reminder – Action Required USPRE.”  If payment is still not received, you’ll receive an email with the subject “Your eBay Account Has Been Placed On-hold: Action Required US200” explaining the various ways you can pay your fees.  An additional warning is issued in the email: “If we do not receive your payment, your account may be suspended and additional collections remedies may be used to bring this account to current. All current listings will be ended and you will no longer be part of the eBay community.”  You’ll get one of those emails every few days for a month.  Then comes the permanent suspension with the accompanying email: “MC197 EBI NOTICE: eBay Registration Suspension: NonPayment” and the text

Your eBay account has been suspended because you currently owe a balance of US $1 million Dollars.

eBay will gladly consider reinstating your account, but only after this balance has been paid in full. If this past due balance is the only reason for restricting your account, it will be reopened for bidding and listing after your complete payment has been processed.
Please follow these steps to make a one-time payment of :

1. Click the “Site Map” link located at the bottom of most eBay pages.
2. Scroll down until you see the “My Selling Account” section in the middle column.
3. Click the “Make a Single Payment” link. You may need to sign in.
4. To pay using PayPal, enter the payment amount in the box and click the “Pay” button. To choose another payment method, click the appropriate link under the PayPal box and follow the instructions on the next page.

If you don’t have Internet access or have forgotten your password, please mail a check or money order to this address:

eBay Inc.
P.O. Box 2179
Carol Stream, IL 60132-2179
United States

– Important –
- Include a copy of this notice with your payment.
- Make sure to clearly note your User ID on your check or money order.

We need you to take action. For more information about why your account may have been suspended and what steps to take now, please go to:


For more information about eBay payments and account reinstatement, please visit:


– Please note –
You are currently being billed a late payment finance charge that is equal to 1.5 percent of the amount that you currently owe. This fee will be charged each month on your invoice date.

We appreciate your efforts to bring your account up to date as soon as possible.

Thank you,

eBay Global Collections

At this point, eBay will continue to send you an invoice to your email each month asking for payment.  They will also send your bill to I.C. System, a particularly annoying collections agency.  I.C. will call you a few times a day and send you several letters through the mail trying to get you to pay.  They can, and will, go after your credit report as well.  The problem is, they can’t do a thing if you’re not who you say you are.  There are thousands of eBay users actively buying and selling on eBay with nothing more than a disposable cell phone, a Simon Gift Card, and a bank account in someone else’s name.  EBay can’t do anything to figure out who these people actually are, so they have no way to make them pay their fees.  There are really only two reasons to pay eBay fees on a suspended account – to get the collection agency to leave you alone and to save your credit report.  If you can just turn off your disposable cell and don’t have a credit report to worry about then there’s nothing eBay and their collection agency can threaten you with.  Thus, eBay has a serious problem.

Why EBay’s System of Suspensions and PayPal’s Use of Limitations Doesn’t Make Any Sense

I’ve always questioned eBay’s use of suspensions and PayPal’s use of limitations to shut sellers down.  First of all, the funny thing about PayPal limitations is that sellers with a limited account can’t send payments.  This includes sending a payment to eBay to pay fees.  A seller with a permanently limited PayPal account can’t pay eBay fees with PayPal at any time and eBay can’t go into the PayPal account and remove money to pay the fees themselves.  EBay is completely stuck unless the seller pays their fees via another method.  Even after PayPal finally releases the funds to the buyer and allow them to withdraw their money, the PayPal account remains limited and eBay still can’t touch the funds.  You might think that PayPal would wait to limit a buyer’s account until after the seller has paid their eBay fees, but that isn’t how eBay and PayPal operate.  It’s a classic case of the left hand not knowing what the right hand is doing.

EBay has a new problem that is even more potentially dangerous to their bottom line.  By moving dispute resolution from PayPal to eBay, eBay now has more control over sellers and a better idea of how they’re performing.  However, now eBay is forced to refund buyers even when they can’t recoup the cost of the refund from the seller.  With PayPal dispute resolution, PayPal would put the buyer’s payment “on hold” immediately after a buyer opened a dispute.  This guaranteed that PayPal would have control of the seller’s funds to cover the dispute because the seller could not withdraw or spend the held funds.  PayPal was also able to refund buyers using the seller’s funds even when the seller’s account was permanently limited.  EBay can’t do either of those things with disputes in their own resolution center.   EBay then runs into an even more expensive problem.  The eBay resources any particular seller uses (in the form of bandwidth, customer service needs, etc) are low compared to the actual fee amount owed.  A seller might owe eBay $500 in final value and listing fees, but the actual cost to eBay is only a few dollars in bandwich and services, if that.  With buyer refunds, eBay actually has to pay the full amount of the refund to the buyer in cold, hard cash.  Oweing eBay $75 in resolution fees actually costs eBay $75, not a few pennies like with final value fees.  What happens when eBay has to issue full refunds to numerous buyers after they’ve limited the seller’s PayPal account and they don’t have any other way of collecting?  It’s a serious problem for the company and one that is only increasing costs that they will never be able to recoup.

Second, when eBay suspends a user with legitimate contact information they potentially lose track of the seller forever.  A professional seller that’s holding $25,000 worth of merchandise to sell on eBay isn’t just going to give up after an eBay suspension or PayPal limitation.  They’re going to go underground and sign up with family members’ names or use completely fabricated information to register again.  There are dozens of websites and forums dedicated to nothing more than selling people information on how to get back on eBay after a suspension.  It’s big business.  I can guarantee you that nearly everyone who gets suspended on eBay at some point will search on Google, “How do I get back on eBay after a suspension?”  What has eBay really achieved then?  They end up with thousands of people selling on eBay that aren’t really people at all – just made up names, addresses, and phone numbers.  Even worse is the fact that these account holders no longer care about their accounts or who they’re defrauding.  They can just skip from account to account when problems arise or one account gets suspended.  When you’re doing business anonymously on the internet, there is very little to worry about as far as repercussions are concerned, especially if you aren’t doing anything outright illegal.  For eBay, this anonymity makes it almost impossible to collect fees.  There is simply no reason to pay eBay after a suspension or limitation if you aren’t registered with legitimate contact information.  EBay doesn’t get paid because their system of suspending users doesn’t work.

An Alternate Theory

Where were we again?  I recall something about eBay reinstating thousands of suspended accounts over the last few days.  I’ve been talking about this turn of events as though eBay will simply suspend users again after they pay.  This may not actually be the case as several people are reporting that their accounts are left in good standing and they have successfully listed and sold items as though they had never been suspended.  This brings up our next question.

Has EBay Finally Screwed Up So Bad They Need All Those Suspended Users Back?

EBay announced their first quarter earnings for 2010 this afternoon.  While the numbers weren’t bad, the outlook into the future was not particularly stellar.  Investors punished eBay stock by sending it down a staggering 8.48% after hours for a total drop of about 9% on the day.  In terms of money, today’s loss cost eBay and their investors about three billion dollars ($3,000,000,000) in market cap.   Why not try to get previously suspended sellers to pay what they owe and then have them go right back to putting more money in eBay’s pockets?  Is it a coincidence that all these suspended users were reinstated the day before eBay’s announcement that they don’t plan to make as much money as expected?  It certainly looks like eBay is looking for additional revenue streams and they’re apparently willing to reach out to those it previously thought it could shun.

Let’s Conclude Today’s Lecture

What exactly is eBay up to?  It’s hard to tell.  One thing is for certain – they want their money.  If I were a buyer, I would pay special attention to who I’m buying from over the next few weeks.  If a seller has a high feedback score, but no feedback from the past six or twelve months, then I would be wary of purchasing something from them.  Chances are good they’re a previously suspended seller.  Like always, be careful out there.

Tend EBay’s Garden for Free and Experience New Search

10 Feb

If You Want It Google Already Owns It

Google gets all of the best names – “Labs,” “Buzz,” “Talk,” “生活搜索,” “Base” and pretty much every other four letter word worth trademarking.  This leaves other companies with scant choices.  This is why there are so many made up words these days.  Skype, Twitter, Bing, and Wii are all just a symptom of the fact that there simply aren’t any real words available.  When I was trying to come up with a metaphor for eBay’s last fee increase I had to use the movie “2012” starring John Cusack because Google owns every other metaphor.  From now on I will have to use “2012” whenever I want to compare anything to anything else.  Google doesn’t own “Google Garden” though, probably because it sounds dumb.  Luckily, eBay jumped on the rare opportunity to grab the rights to a real life English word and now we have “Garden by eBay.”

Is the Soil Fertile Enough for Green Beans?

Good question.  According to http://pages.ebay.com/garden/, “Garden by eBay is where we plant the seeds of new ideas.”  Although this doesn’t make any sense, it does sound like an assignment my son’s fourth grade teacher would send him home with so I sort of understand where this is going.  At least they don’t continue by saying the community needs to water the seeds in order for the ideas to blossom.  Maybe next time.  Once every year or so, usually after eBay is forced to retract a ridiculous policy or fees are increased, eBay gives the “community” a sneak peek into a single forthcoming change; usually one of little consequence that never materializes anyway.  It looks like they’ve planted this year’s in the form of a search tweak rhododendron.

Streamlined Search Sneak Peek

Anyone can “opt-in” to preview eBay’s new “streamlined search” and can then opt-out at any time.  I don’t want to ruin your new search experience by giving any details other than I do like the side-by-side auction and fixed price view.  Just go to http://pages.ebay.com/garden/, click opt-in and away you go.