It's not about protecting buyers, or even about the interest (though that certainly gives them a few bucks)...it's about protecting ebay/paypal when they're offering buyer protection (which is hypothetically supposed to benefit good sellers with more buyers based on greater confidence). Essentially, ebay is offering buyers an automatic right of refund and one sided arbitration...but they aren;t offering those things with their money, they're offering it with the money of their sellers. They figure that a bigger seller is going to write off the loss and NEEDS ebay, so they aren;t going to go to war over one refund every now and again. In that logic, a power seller isn't a non-payment risk on a guaranteed refund. Their policies are designed to protect buyers, themselves and larger sellers by increasing buyer confidence over all, but making sure it's not at their own expense.

It kills smaller sellers because it encourages buyers to seek refunds and doesn't give us a recourse other than suing ebay/paypal. It's grossly unfair because of the interest issue and they lie/mislead about FDIC insurance. They don't really care...most of their revenue is the larger sellers. Personally, I think their risk of buyer protection losses should be built into their fees/pricing or offer reasonable arbitration to sellers (especially when sellers are who PAYS for arbitration).

The reason this offends me is because of the ebay/CL alignment. On its own, paypal is just another online payment service, and there are several. If you don't like their policies, you can move along to the next guy or refuse to accept paypal (and take on the lower sale price risk). The reason it's so offensive is that they prevent the seller from using other options...or from NOT using paypal. There should be freedom of choice for both buyer and seller in payment services and there isn't. When you combine that with their heavy handed policies and arbitration techniques, it reeks of anti-consumerism. They have, in effect, given themselves a monopoly on the payment fee by excluding me from not using paypal. They've also influenced CL to ensure they don't offer compeition to ebay.

Let paypal compete on the open market with Dwolla and let's see what happens. If buyers are willing to use payment services that don't offer as much protection, let them - it might result in lower prices for sellers (eBay's argument), but I doubt it. I've seen no evidence that eBay's new policies have resulted in higher sale prices - I've only seen evidence that the sale prices reflect the market and economy. I certainly don't believe that these policies have resulted in sales prices that compensate for higher seller risk and fees. Stores like REI and Apple charge a premium for their customer service and refund policies - the consumer pays for it. That hasn't happened on eBay. Thus far, the only beneficiary I see is eBay, and to some extent buyers.