Paypal eChecks

[axe_n_gear_music]

Had a lot of echecks lately, and they are a little frustrating. I ship anyway, before payment clears, because of the obvious DSR hit for shipping time if you wait. Still can't believe eBay has a system in place that allows that. Shipping Time DSR's should have been done away with a long time ago, but everyone EXCEPT FOR EBAY shares that opinion, I'm sure.

Echecks are even more troubling when you get an order for hundreds of dollars in the form of an echeck- they are much riskier for sure. I still ship them anyway with full insurance and signature required, but I wish Paypal would do away with echecks entirely, and require buyers to have a backup funding source and make instant payments only.
Anyone have any similar experiences or ideas?

Cheers,
AXE

[coxengines]

Axe,

We also ship immediately with e-cheque payment. However, we are of the opinion that they are no riskier than instant payment.

Instant payments have the same chance of bouncing as e-cheques. Last year we had zero e-cheques bounce but 3 or 4 instant payments did.

This happens when a buyer has insufficient Paypal balance and funds the payment with his/her bank account. As a seller, you are not privy to the buyer's source of funds.

The only reason some payments show as e-cheques is because the buyer has not completed all the verification steps for Paypal to remove the e-cheque status.

In the end there is no difference if the buyer funds with a bank account. If there are insufficient funds on his/her account the payment bounces and the seller gets charged back. Whether the payment originally showed up as e-cheque or instant payment is irrelevant.

Bernie

[axe_n_gear_music]

"Whether the payment originally showed up as e-cheque or instant payment is irrelevant."

But the relevance does lie in the fact that the seller is not protected when shipping before an echeck clears, as opposed to an instant payment with the "ok to ship" notification and coverage.
I agree that echecks rarely bounce, but just wish that Paypal would make all Paypal users complete the verification steps and have a backup funding source in place before being allowed to buy with Paypal.

[westernstargifts]

I had a couple of e-checks bounce recently. I don't, and never have, ship until payment has cleared. It doesn't seem to have had an effect on my DRS's but I don't get that many of them. I don't ship with tracking so am not covered by PayPal anyway.

I always send a message with my shipping notice stating the date of "cleared payment" and shipping date which may help.

[bcbeautiful]

I had a couple of e-checks bounce recently. I don't, and never have, ship until payment has cleared. It doesn't seem to have had an effect on my DRS's but I don't get that many of them. I don't ship with tracking so am not covered by PayPal anyway.

I always send a message with my shipping notice stating the date of "cleared payment" and shipping date which may help.

Ditto...had a couple e-checks bounce.

[coxengines]

Again, we always ship on e-cheques as it makes absolutely no difference.

We ship almost 100% Light and Small Packets, no PP protection in either case.

Whether the payment bounces because it's an e-cheque or instant payment makes no difference. It might be different for sellers that ship with tracking but in our case it does not matter.

Westernstar:

I don't ship with tracking so am not covered by PayPal anyway.

So, why do you wait to ship? A buyer pays with instant payment and the payment bounces: No difference.

And even if the payment does not bounce, if a buyer claims INR you are hooped with no tracking. Might as well ship and make the buyer happy.

Having said all this, we have never, ever, had a case of bounced payment where the buyer did not make good.

Bernie

[pjcdn2005]

The odd time I do ship before an echeque has cleared but usually I do wait. I always explain to the buyer how an echeque works and everyone has always seemed fine with that.

So, why do you wait to ship? A buyer pays with instant payment and the payment bounces: No difference.

I don't think I've ever had an instant payment bounce and hadn't really thought of the possibility.

I send a lot of light packet mail and it just seems like I would be pushing my luck shipping without delivery confirmation, without insurance and without payment although I do understand what you are saying Bernie. We all have different comfort levels.

[coxengines]

PJ, I completely understand where you are coming from but I reiterate that, even if the payment is credited to your Paypal account, there is no guarantee that it will "stick".

Payments funded by bank accounts can bounce in around a week's time and those funded with credit cards up to 3 months later or longer.

When a buyer sends an e-cheque he/she has initiated the payment and, in their eyes, have paid even though Paypal has not (yet) taken the funds out of their account.

I used to think just like you until the day (a couple of years ago) an instant payment was reversed, 4-5 days after we got paid and had shipped.

The Paypal rep explained that instant payments are not guaranteed, can be reversed if the buyer has insufficient funds on his/her bank account and that we should simply see this as a risk of doing business.

It's different when shipping trackable product but, in the case of light and small packets, it makes no difference.

The "comfort" exists solely in one's mind because sellers (falsely) believe that funds credited to a Paypal account are safer. The only real difference between instant payment and e-cheque is whether the account holder has completed step 2 of the verification process or not (credit card).

Having said this, you are likely in good company as the majority of sellers would concur with you. Hey, I used to think that way until I got woken up lol.

Bernie

[zarzuella]

Another little-known whammy:
A buyer in Germany who pays via (PP) instant bank transfer can reverse the payment through their bank; something to do with German banking laws. I was once nailed by a scammer with this one - buyer cancelled payment after shipping confirmation received.

I also wait to ship e-cheque payments; I've had several failed e-cheques and see no point in taking further risks.

Ann

[westernstargifts]

Again, we always ship on e-cheques as it makes absolutely no difference.

We ship almost 100% Light and Small Packets, no PP protection in either case.

Whether the payment bounces because it's an e-cheque or instant payment makes no difference. It might be different for sellers that ship with tracking but in our case it does not matter.

Westernstar:

I don't ship with tracking so am not covered by PayPal anyway.

So, why do you wait to ship? A buyer pays with instant payment and the payment bounces: No difference.

And even if the payment does not bounce, if a buyer claims INR you are hooped with no tracking. Might as well ship and make the buyer happy.

Having said all this, we have never, ever, had a case of bounced payment where the buyer did not make good.

Bernie

The 2 e-checks that bounced were recent transactions. One was about to be re-submitted for the 3rd time as it had already failed twice. It has been my experience that people who don't have the money and ask me upfront if I will wait for payment always end up paying. Those that bounce e-checks never contact me. I have never had an Instant Payment bounce.

Selling online is risky at best. You can re-ship an INR and in most cases never hear from the person saying that they received the packages. Rarely do I have someone honest enough to say that they received both. They usually keep them or, if I have given a refund, they do not pay when they do receive it. I am not willing to also add the risk of shipping without receiving payment. In my mind, an item is paid when the funds are in MY account and I have access to that money.

[montrealmaps]

I always sent immediately after I received echeck. Recently, an echeck failed to clear twice. Of course, the buyer never contacted me. Now, I will NEVER EVER send anything before the echeck clears.

[pierrelebel]

Since the beginning of times, I always ship upon receipt of a paper cheque, check or echeck.

Last November I had a buyer in Australia send four echecks in the space of a few days. The first one was for $380 and I shipped the next day. The next three echecks, totalled over $500. I decided to hold on shipping for a day on a "gut feeling".

In the meantime PayPal advised the first echeck had NOT been honoured by the bank. A few days later, the other three echecks also bounced (PayPal is much quicker to advise on Australian echecks than on Canadian echecks!).

Eventually I receive a Western Union payment for most of the first shipment and the buyer has been ignoring my messages ever since.

And yes, I still ship upon receipt of paper cheque, check or echeck! It is good business to do so, despite the occasional problem..

[montrealmaps]

It depends on the situation. Of course, if an echeck/check comes from a buyer with 500+ feedback, I would ship immediately. But my last one came from a "0" feedback buyer, registered on Ebay in ...2004!

[coxengines]

Precisely the ones we see most. No activity for years and their credit card listed with PP expired; hence the payment is sent as e-cheque.

Bernie

[godboma]

I always ship before the echeck clears and I never had an echeck bounced on me. I did get a few charge back over the time on credit cards (instant payments)...

I think it is all related on the amount of risk your are willing to take. In my case, I know that I gain a few customers just by taking that kind of risk. Not only with eCheck but also with money orders, checks, etc

[ecgt]

I am quite shocked to read that many of you will ship before an e-check clears. We make it clear to our buyers as soon as an e-check has been sent that we will not mail their package until it clears.

If you ship before payment clears then you might as well throw your money away. E-checks have become more and more common and we generally have one bounce every month. The more common that they become the more likely you will have one bounce.

If you do not care about this because you are not covered by Paypal (as a result of not shipping with tracking and delivery confirmation) then why would any of you care about DSRs? Not shipping with tracking and delivery confirmation will result in poor DSRs over time. All in all, some of you folks are engaging in some risky business.

[pierrelebel]

"shocked to read that many of you will ship before an e-check clears"

Many of us have been in the mail order business well before eBay was invented and have business interests outside eBay where buyers pay by cheque (check) in the regular course of commerce.

Most businesses will ship upon receipt of cheque (check). To withhold shipment until a cheque clears does show a lack of confidence in the customer and certainly does not instill goodwill.

[westernstargifts]

I am quite shocked to read that many of you will ship before an e-check clears. We make it clear to our buyers as soon as an e-check has been sent that we will not mail their package until it clears.

If you ship before payment clears then you might as well throw your money away. E-checks have become more and more common and we generally have one bounce every month. The more common that they become the more likely you will have one bounce.

If you do not care about this because you are not covered by Paypal (as a result of not shipping with tracking and delivery confirmation) then why would any of you care about DSRs? Not shipping with tracking and delivery confirmation will result in poor DSRs over time. All in all, some of you folks are engaging in some risky business.

I don't ship with tracking except for the occasional Expedited package within Canada. My DSR's have never been higher....including the ones for shipping time & charges. And I rarely offer free shipping.