eBay & Website Payment Methods / Options and one lesson which cost me over $20,000!


  • Share on Tumblr

Transcribe of “eBay & Website Payment Methods / Options and one lesson which cost me over $20,000!”

Hi, it’s Neil Waterhouse. I received a question from Greg Adams, asking what types of payment methods do they accept on Ebay? And on their own independent website. Great question to Greg, by the way. Now there’s so many different payment methods available. Taking payment for your Ebay business and your own independent website. For Amazon, Amazon of course has its own gateway. So you don’t need to worry about different payment methods, for that platform.

Don’t need to worry about different payment methods

For an Ebay business or your own independent website. You got many options including PayPal, credit cards like, Visa, Mastercard, American Express, et cetera. As well as other methods of receiving funds, including, direct deposits. Where, you know buyers transfer funds into your bank account. You can also if you wish accept personal and bank checks. This is of course where customers posting checks to whatever nominated address you put. Which is normally either your personal address, your business address or a post office box.

Most definitely accept PayPal

Now the short answer, to Greg’s question is, most definitely accept PayPal. And if you only have an Ebay business, I highly recommend you only accept PayPal and nothing else. The reason with this is, every payment methods has its pros and cons. PayPal these days simply has the most pros for buyers and sellers. And PayPal these days has the best screening of both buyers and sellers. Meaning it’s very rare these days to get a charge back. For those who don’t know what a charge back is. A charge back of course occurs when a buyer disputes a charge on their credit card statement. In other words, the buyer states that somebody else fraudulently used their credit card. To purchase goods and they are requesting the bank to reverse the charge.

PayPal eradicates most charge backs

The PayPal these days, eradicates most charge backs. As they use a lot of fraud prevention techniques. Including tracking of IP addresses of computers, phones, tablets, or any other device used to purchase an item. This, plus a multitude of other screening and vetting algorithms. Has made PayPal a very safe gateway. Again for both buyers and sellers.

Another thing to be extremely grateful these days, never before on online businesses has it been so safe for buyers and sellers

This by the way, is another thing to be extremely grateful these days. Never before on online businesses has it been so safe for buyers and sellers. You know, back what must have been over 20 years ago now. I learnt this lesson the hard way and sold a stack of computer memory sims and for my payment were given credit card details.

Payment using crddit cards

Now back in those days, we took the credit card details. Wrote them on credit card slips, which the bank provided. You know those wide slips. They had carbon in between, you wrote them through. And you gave the yellow one to your customer and the white one you kept. You put them in a bag and sent it with your bank. So we wrote it on one of those slip. And then you used to ring up the bank, give the bank the credit card numbers and the amount. The bank would give us an approval number. Which we subsequently wrote on the, that number on the slip.

Lesson i learnt from past 20 years

Then once we got that approval number, we shipped the items out. Well, of course this was all going great. Until one day we received two letters from our bank. And in these two letters were two transactions, which the owner of the credit cards were disputing the transactions saying, they never ordered the items. Now one of these orders was for just over $5,000, and the other one was over $15,000, that lesson cost me over $20,000. The bank asked us to provide evidence, that the two customers had actually ordered these sims, or these items.

Lesson cost me over $20,000

We provided all the documentation, that we had got, who’d been provided by the customer and sent it to the bank. And approximately, you know one or two weeks went past and we received two more letters from the bank saying, that the evidence wasn’t good enough, as there was no signature from the owner of the credit card. Because there’s no signature, the bank debited the $20,000 from our account and to add insult to the injury, they hit us with a $30 charge back fee for each transaction.

So my big expensive lesson back then was, no signature, equals no responsibility from the bank

So my big expensive lesson back then was, no signature, equals no responsibility from the bank. And all responsibility on the seller. Since that day, we never ship any items out which are worth more than $100 to a customer who uses a credit card without first verifying the address of the buyer. So for that reason, if you’re a newbie or just selling on Ebay.

Just use PayPal until you have a methodology in place to verify addresses

I highly recommend just use PayPal until you have a methodology in place to verify addresses. Now the next payment method I’ll mention is direct deposits. This is where a customer purchases something from you and they pay you by transferring money into your bank account. To make the payment, the customer can either walk into a bank or they can transfer cash or check into an account and then go online and transfer from their account into your bank account.

Direct deposits

Now this can all work well when you’re small but once you get bigger it can turn into an absolute accounting nightmare. We have one product, that some days it sold over 20 times, in the one day and always for exactly the same price. Now the problem here is when people deposit cash into your bank account and don’t give any reference to the payment. That’s where the problem is. Anyone who’s run an Ebay, Amazon or website business long enough knows that customers don’t always pay as soon as they purchase so there’s always unpaid items in the system.

If your accepting bank deposits, you have to try to continuously match the payments in your bank account with the unpaid orders

What happens here is if your accepting bank deposits, you have to try to continuously match the payments in your bank account with the unpaid orders. Of course when somebody deposits cash into your bank account and it just says cash deposit, and there’s no reference to who it was or what they purchased, it’s impossible to figure out, you know, which order it goes to. Continuously we’ll get payments in our bank account that just say cash deposit. Problem here is we just have to wait until the customer complains, they didn’t receive the order.

Causes further problems

And of course this causes further problems because as soon as we ask the buyer to prove, that they paid, so we request a deposit slip or something, they get annoyed and just say, check your bank account. I think many buyers think that they’re the only customer that we have, but in reality that item could’ve sold, you know, multiple times in one day.

If you do accept direct deposits

So to get around this, as much as possible, if you do accept direct deposits, always have plenty of follow-up emails, continuously stating to the customer that they must put a reference down on the deposit, otherwise we cannot match their payment and their delivery could be delayed, if we cannot match that payment with their order.

Their order could be delayed

What we discovered is that, that statement of, you know, their order could be delayed, if we cannot match their payment works the best so far to reduce the amount of people not putting any reference on the direct deposits and also not notifying us, when they’ve made a deposit. If the customer thinks their order will be delayed, by not giving the details, they’re much more likely to make the effort to either put a reference on the deposit and or notify us when they’ve done a direct deposit.

The problem accepting checks

Now, the next, what’s the next one, the next payment method I’ll mention is accepting checks by post. The problem accepting checks is if, there are personal checks, you obviously don’t want to ship the item until the personal check clears and the moneys in your account. And this can take, you know, three days to over one week for the check to clear. On top of that the time it takes for the check to you know, finally arrive in your post box or your letterbox.  How often do you clear your PO box?

Then how often do you go to the bank so you can deposit the check?

Then how often do you go to the bank so you can deposit the check? All these time frames, you know, they add up. And suddenly it can be two weeks from the time, when the customer picks the item to the time the moneys cleared in your bank account. Hello Fergie, that’s a one of the cows wanting some lunch. Anyway so, Fergie, I lost my train of thought, so now it’s two weeks so, if it’s an import item that you had in stock, do you still have the item in stock? If it’s a job ship item, does your supplier still have the item in stock?

PayPal rocks for both Ebay and your own independent website

So bottom line is, PayPal rocks for both Ebay and your own independent website. And other payments, they’re okay, as long as you know and understand the pitfalls. Have a methodology in place to help overcome charge backs.

Have a methodology in place to help overcome charge backs

Of course, it’s all much easier to take multiple pay methods once you, you’re at the stage of employing a low-cost overseas virtual staff who can do it for you. You know, but, if you’re not at that stage yet, you know, remember it’s all just continuous small baby steps and you’ll be there before you know it. That’s all for this week, please scroll down below and leave me a comment, until next week, list more, sell more, this is Neil Waterhouse.

Please leave a comment below and let me know what you think.

  • Share on Tumblr
This entry was posted in Drop Shipping, eBay Business, eBay Tips / Strategy and tagged , , . Bookmark the permalink.

One Response to eBay & Website Payment Methods / Options and one lesson which cost me over $20,000!

  1. Thanks Neil,
    Great information as usual.

    Our situation now is that our E Bay Sales have dropped off by about 50% and our website sales have increased by 50% mainly due to Afterpay.

    Do you think E Bay will take on Afterpay or similar eventually.

    Regards
    Geoff

Leave a Reply

Your email address will not be published.

GET EBAY SUCCESS NOW

Absolutely no spam!

Free Download

Get eBay Success Now. Learn how to get automated eBay sales 24/7 365.

banner

Neil Waterhouse

Before you go, get the behind-the-scenes strategies and secrets used by the world’s most successful eBay Amazon Dropship sellers.

These are powerful tactics that I’ve used to launch and grow my own online businesses… and they can work for you, too