Web Informant #198, 12 May 2000

      This past month I became one of the millions of people to buy and sell merchandise over eBay. What took me so long, you might wonder? Well, it was my daughter. For weeks she had been bugging me about getting a fancy watch. I resisted, saying that it was too expensive. (Of course, the argument that neither my wife nor I owned a watch of any equivalent expense wasn't persuasive.) Finally, out of desperation, she asked me "What if I just get it on eBay? Then I (meaning me) could save lots of money?" Being a sucker for the clever technology solution, I caved, and within nanoseconds after granting permission she was off searching the site. Within an hour, she had located an auction for the right watch (color, features, and all) and was ready to place a bid. All I had to do was supply my e-mail address. We were off and bidding!

      After a few days watching the price go up, things started to get interesting for her. She began to see that what initially was a tremendous bargain became less and less so as bids came in and the price crept up. Of course, she was caught up in auction fever ­ and I knew that we were buying this watch whatever the price. So when the auction closed and we were the high bidder, the fun began. Of course, she had neglected to read the fine print ­ there were additional charges for shipping. And she didn't realize that in this age of the Internet the watch wasn't on our doorstep within minutes of the close of the auction. But these are details. The watch arrived, she was happy, and I managed to save about $15 or $20 from buying one in a legitimate store.

      So now that I was an experienced eBay user, I started thinking about trying the selling side of things. Again, my daughter provided insight and motivation when one day she was visiting my office and noticed an aging Radio Shack Model 200 computer lurking about. She loves to play with some of the older stuff I have in my backroom, which is now called "her" office. Why not try to sell it on eBay, Dad? A quick search gave me listings of many people who are still interested in this computer. And while it had some nostalgia value (after all, it was my first portable and still was in working condition), I figured I could write a column from the experience and test out some of the newer payment technologies that eBay has instituted. And here we are.

      One of the issues for eBay users is how money moves from buyer to seller. If you pay by check, you as the buyer have to wait until your check clears the bank and for the mail to move it across the country before you get your goods. Makes sense, but that means that there is this period of time when you are out the cash and still have no stuff, which can be nerve-wracking even if you are a very patient adult.

      eBay has begun to work with Billpoint to fix this. Billpoint is an electronic bill paying service that deducts the funds from a buyer's credit card and deposits directly to the seller's bank account, taking a small (3.5 percent of the transaction price plus 35 cents) fee in the process. The process takes a couple of days. Having an electronic payment system is one way to cut down on buyer anxiety and shorten the time from auction completion to product delivery. It also brings some air of legitimacy to the process, since the service checks to make sure that the buyer and seller have legitimate accounts. All the transaction notifications are done via e-mails, and I was amazed how easy the whole thing was. My buyer submitted his payment instructions quickly, and within a few days the funds were supposed to be in my account.

      The only trouble I had was I forgot which account I had set up with the service, so I was looking in the wrong places when I got my credit card statement and getting a bit nervous myself about where my windfall from the Model 200 sale went. But that is my own operator error, not the fault of eBay or Billpoint. It took three days for them to deposit the funds to my checking account, which is about what they promise on their site.

      What I found out by being a buyer and a seller on eBay is that the self-policing aspects are good ones, provided you both have a good idea of the merchandise involved. There is this very involved rating system that is used to investigate the history of both sides in the transaction. Both my seller of the watch and my buyer of the computer were diligent about posting positive comments about my transactions, and as I explored eBay further I saw explicit information warning potential buyers that they would be "punished" for submitting rogue bids or not following up a winning bid with actual payment. Of course, I wasn't trying to pass off some artwork or body parts, just sell a 15-year old computer. But now I want to comb my attic for other eBay goodies. After all, I've got that electronic accounting system all set up now. But first there is this small matter of a commission I promised my daughter as part of recommending the computer to sell. Too bad I can't settle that bill electronically. Maybe she'll take an IOU.