eBay UK Updates Payments Terms of Use – Effective 16 April 2022

eBay UK is updating the payments terms for its sellers, effective on Saturday, 16 April 2022.

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The company revised the Payment Terms of Use to better describe the payment services they provide to sellers. eBay said the updated terms provide more details on how it will handle disputes, holds and reserves, including how it will collect outstanding amounts from sellers.

Here is a look at the new payments terms highlighting significantly changed sections from the previous (currently in force) version.

Section 6 (Managed Payments Limitations)

“In some listings or categories, eBay may allow sellers to offer buyers the option to pay for a purchase directly to the seller without using the payment services offered by us under these Payment Terms of Use, for example by cash payment on pickup (“Offline Payment Methods”).”

This wording is significant because previously eBay did not restrict the listings or categories for which it would allow sellers to offer items that did not use their payment service.

The February 2022 Seller Update for the UK did not include any wording that would suggest some categories may become restricted. The assumption is that eBay UK may introduce such restrictions, once the new Payment Terms are in force.

Section 7 (Using Managed Payments) / Disputes

In this section, eBay revised the wording a bit. While much of the gist of the new policy resembles the old policy (even when slightly reworded), there is one major change we highlighted below.

“A buyer (or the owner of a payment instrument) may initiate a chargeback, direct debit reversal, or PayPal buyer protection claim, or otherwise asks their financial institution to open a payment dispute (all referred to solely within this Part I as “Dispute”) in connection with a Managed Payments transaction. The final outcome of the Dispute will be decided by the buyer’s financial institution.“

eBay also makes sure that sellers understand once the process is over on its platform, it’s over. However, they remind sellers that certain legal rights outside of their payment system remain unaffected.

“You will not contest the resolution of any Dispute that we investigate and/or re-present, nor will you re-open resolved Dispute investigations. If you are a consumer in the EU, UK or Australia, your rights to file a complaint or to take legal action in court remain unaffected.”

Section 7 (Using Managed Payments) / Holds

Another area that eBay significantly expanded its wording is on holds.

“You agree that we may place holds on your funds or instruct a payment service provider to hold your funds, prior to disbursement. If you receive funds to a stored value account issued to you under eBay’s Spending Balance Terms and Conditions, a hold may also be placed on funds in the stored value account. If a hold is placed on your funds, the amount and status of the hold will be displayed under the Payments tab in the Seller Hub/My eBay. We will notify you through the eBay Message Center and/or by email and, depending on the reason, may request additional information from you to help resolve the issue. A hold may be placed if we have reason to believe there is an increased risk associated with the provision of our Payment Services or with a certain Managed Payment transaction , for example if we cannot verify your identity or if your buyer files a dispute. Please see our holds help page for more detail on the hold types and examples. We take into consideration relevant factors when assessing the risks including selling history, seller performance, returns and cancellations, chargebacks, riskiness of the listing category, transaction value, the ability to make direct debits from your Linked Financial Account, and the filing of eBay Buyer Protection Program claims. We also may cancel or freeze the settlement of your proceeds as necessary to comply with our legal obligations in connection with fraud prevention, risk management, or regulatory compliance. Any hold placed on your funds will be lifted when the issue is resolved”

Section 7 (Using Managed Payments) / Reserves

This area also ballooned with new terms, going from about one paragraph to four, including adding two new concepts, a rolling reserve and a minimum reserve. Neither of these was present in the previous agreement.

“In order to manage risk or secure your obligations under these Payments Terms of Use, we have the right to require a reserve of transaction proceeds. This means that the respective portion of your funds is reserved as unavailable for disbursement. Reserves may be in the form of rolling and/or minimum reserves.

A rolling reserve is a reserve funded by withholding a set percentage of your transaction proceeds each day for a fixed period to be released to you later at a scheduled time on a rolling basis. For example, we may require a rolling reserve of 10% for a period of 60 days. Under this requirement, 10% of your transaction proceeds earned on day 1 will be withheld from your payouts and then be released to you on day 61. Subsequently, 10% of your transaction proceeds earned on day 2 will be withheld and then released to you on day 62, and so forth. Rolling reserves are the most common type of reserve.

A minimum reserve is a requirement to hold a specific amount of money in your reserve. A minimum reserve may be funded by contributing a set percentage of your daily transaction proceeds to the reserve up to the minimum requirement, or by setting-off the entire amount of the minimum requirement from your pending payouts. For example, if we require a minimum reserve of $5,000, the reserve may be funded by contributing 10% of your transaction proceeds to the reserve each day until the amount reaches $5,000. Alternately, if your pending payouts equal or exceed $5,000, the minimum reserve may be funded by setting off the reserve requirement from your pending payouts at one-time in full.

We may require a reserve if we have reason to believe there is an increased risk of non-fulfilment of your obligations under these Payment Terms of Use. We take into consideration relevant risk factors before requiring a reserve, including, as applicable (i) your eBay account history, (ii) whether the category you are listing in has a higher likelihood of chargebacks or refunds, (iii) whether your eBay account has an elevated number of customer claims or disputes, (iv) your business and/or personal credit history (business sellers may be subject to credit agency checks), (v) whether you are selling products in advance of availability (pre-selling orders), and (vi) whether you have extended delivery time frames. Depending on your performance and the risk associated with your use of Managed Payments, a reserve may be raised, lowered, or removed at any time. The amount of each reserve (and any subsequent change) will be reasonably determined based on the seller-specific risk (including the volume of your sales). The amount and status of each reserve will be displayed under the Payments tab in the Seller Hub/My eBay and we will notify you of any reserves we require of you.”

Other European eBay Payment Entities

Because eBay manages payments in Europe through different entities, the new agreement adds this wording for payments settled by ECUK (UK) and eBay Sarl (EU) specifically.

“We may disable specific payment method(s) available to buyers for all or some of your listings if we reasonably believe the use of such payment methods for your transactions will increase regulatory, financial, or other risk to us. For example, if you would like to offer a high-priced item with a new eBay account, we may disable such payment methods where the amount is credited with a time delay after the transaction (e.g. direct debit or payment upon invoice). In assessing the risk, we consider relevant factors such as your sales history, service status, eBay account history, risks associated with certain item categories, transaction value, and number and monetary amounts of eBay Buyer Protection cases. We will re-enable the affected payment method(s) for your listings once the risk no longer exists.”

Full eBay Update to Payments Terms of Use

This article highlights the most significant changes we found. We strongly urge UK sellers to read the entire update which is available here.

eBay says that users who choose not to accept the changes can see Part I/Section 10 for further information but essentially the only way to get out of these terms is to close the eBay account.