Starting sometime later this month, eBay has decided to do away with allowing sellers the option to accept checks and money orders totally.  From the official announcement page,

all items listed on eBay.com must be paid for using one of the following approved payment options:

  • Direct credit or debit card payment via a merchant credit card account
  • PayPal
  • ProPay
  • Payment on pick-up

Paper payment methods such as checks and money orders will no longer be accepted on eBay.com.

By January 2009, all approved electronic payment methods will be integrated into eBay checkout. For example, buyers will be able to enter their credit card number directly into eBay checkout, and the payment will be routed to the seller’s Internet merchant account or to their PayPal account.

As a buyer, I’m really excited about this.  There have been a few times in the last year or so where I’ve purchased small items, under $20, and then realized the buyer didn’t accept Paypal and only accepted a check or money order.  My guess is because the Paypal fees would seriously cut into the profit, but it adds so much time into getting me the item I just won.

As a seller, I’m 100% OK with this.  It’s one less chance that I have for being scammed with a fake money order or have to deal with the possibility of a bounced check, which results in a fee from my bank.

My only concern at this point is that even though the basic fee charges were lowered for insertions, they were raised on final value fees.  Since eBay owns Paypal, they have the ability to start messing around more with the Paypal fees and it could very much be a reality that 15-20% or even more of the final value of an auction listing could go to pay fees to eBay and Paypal for transactions.  For some smaller items that sell for $25 or less, it’s almost not worth listing on eBay for the hassle of the fees, unless it’s a highly profitable margin.  This is clearly where Craigslist will start to dominate the individual sellers market and we could see less great deals on eBay and be forced to scour Craigslist instead.

eBay has also made a change that was bound to happen which will seriously impact some sellers profits.  Shipping charges have often been a sore subject for me and many other people who buy items from eBay.  Often times great deals can be found on small items, until you realize the seller wants an unrealistic amount of money to ship it.  Let’s say you collect antique keys for example.  The reality is a small padded envelope costs about 80 cents, gas to get you to the Post office maybe costs $1 round trip and the shipping charge, even with insurance and delivery confirmation costs maybe $1.70.  The seller wants $16 to ship it.  Why?  Because the seller will often try to sell items at a lower cost to feel less impact on the final value fee and recoup some of the money that way, in addition to padding the costs of packing materials and my favorite handling charge for actually packing your newly won item and mailing it out.  I’m fine with paying a dollar or three over the cost of the actual shipping and packaging cost, but 500% over that is a bit much, and that’s what some sellers want.

The reality is that many of these items that sell for under $1 will soon disapear from eBay because of these newly added maximum shipping charges.  They only apply to certain items so far, but don’t be surprised to see a lot more added to this list.  I’m also curious to see how fast eBay will be amending the price structure as the USPS, UPS and FedEx are always adjusting their shipping charges.  See the full list of items affected by the Maximum Shipping Fees here.