- 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,
for 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
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.
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 and PayPal these days simply
has the most pros for buyers and sellers.
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 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.
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.
I sold a stack of computer memory sims
and for my payment were given credit card details.
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,
and you put them in a bag and sent it with your bank.
So we wrote it on one of those slips,
and then you used to ring up the bank,
give the bank the credit card numbers and the amount,
and the bank would give us an approval number.
Which we subsequently wrote on the, that number on the slip.
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.
Now, the bank asked us to provide evidence,
that the two customers had actually
ordered these sims, or these items.
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.
And 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.
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, 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.
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.
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.
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.
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.
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.
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.
Then how often do you clear your PO box?
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?
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.
And then 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.