EBay changes turning off more customers?

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Chalk up another public relations problem for eBay, the uber-successful company that can't seem to get it right anymore. Oh sure, eBay is still raking in money hand over fist, but who knows how long that will continue if the company keeps alienating its bread and butter.

Last week eBay announced a fee change that could likely entice more sellers to the site: Sellers will now pay 35 cents to list as many of the same fixed price items as they want, instead of charging a fee to list each item separately. This sounds good, although critics say that this new move favors larger sellers and puts very small sellers at an economic disadvantage.

This change was paired with a nother controversial change that may turn off some sellers and buyers. Starting in mid-October, eBay will only allow sellers to accept electronic payments, including credit card, PayPal, or ProPay. Sellers will not be able to accept cash, check, or money orders.

Although eBay says those non-electronic transactions account for less than 10% of the sales made on eBay, it's still a shift that may upset some buyers and sellers. Why not offer the customers the choice? It's clear that not many users want that choice, yet it shouldn't matter to eBay if that's how they want to do business.

I suspect that this change may be an attempt to push more people toward using eBay-owned PayPal. Earlier this year the suggestion that eBay might go "PayPal only" brought consumers out in droves against the change. Maybe this is a not-so-subtle move in that direction, without technically "requiring" sellers to accept PayPal. After all, how many non-business owners do you know who have credit card processing capabilities? Those individual sellers will be all but forced to use PayPal since they don't have access to another electronic method of payment.

I've been a pretty big eBay fan in the past, but I'm afraid some of the recent changes aren't really going to endear the company to their existing customers... the ones who made eBay what it is. I'm waiting for someone to come up with the next big idea that will really challenge eBay's position as the dominant force in online consumer-to-consumer sales.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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