eBay: This time its war

I guess it may be coincidence, but I received a letter in the post from my credit card company (Alliance & Leicester Credit Card) notifying me of changes in their terms and conditions that come into force November 1, 2004, this section was of particular interest:
Other changes

The following changes affect the way in which promotional rates could be removed from your account if you breach your terms and conditions. In addtion, any transaction were you electronically tranfer money, e.g. money orders and wire transfers, and gambling transaction will incur handling fees of 2% (minimum £2). To reflect these changes, the following clauses will be amended to read as follows:

1) We will not increase any promotional rate unless you have not kept to any terms and conditions that apply to your account, or we believe that the account is in danger of being misused. If you do not keep to the termsa nd conditions at any time we may totally withdraw any promotional rates which apply to your account from the day after your last statement date and use the APRs set out in your terms and conditions.

cash transaction – any transaction under which you receive cash or a cash substitute by using your card or card number, including foreign currency, traveller’s cheques, postal orders, any transaction where you electronically transfer money and any gambling transactions.

Secondly there was this post on the Interesting People mailing list:

Subject: Purchasing through EBay invalidates warranty, according to PalmOne

Dave,

This is remarkable enough to be worth wider consideration.

A little over two years ago, I bought a Handspring Treo 180, with the view that it embodied a significant chunk of mobile-office heaven. By an large, that opinion persists. I really do love using the thing… When it works.

However shortly after running past the 1 year warranty deadline, I found that the built-in speaker (in the flip-up cover) stopped working.

Given that replairs are expensive, I wound up buying a new replacement, just under 1 year ago. Sure enough, the speaker stopped working this week. I have since found documentation of this problem on the web, of course.

I called Handspring Customer Service and they informed me that because I bought it through EBay, they would not honor the warranty!

I ran up the chain in the front-line support office and they then directed me to Corporate. Shaun, on the PalmOne corporate escalation team assured me that this policy was in fact true. The fact that I went through EBay meant that I did not purchase the product through an authorized retailer.

Call me Jim Garrison, but from my eyes it looks as if credit card providers want to get a piece of the eBay action in order to make up for declining revenues on card transactions from ‘authorised resellers’. Credit card issuers get a small percentage of each transaction from the retailer, on eBay the prices are lower so the money paid to the credit card company is lower. With higher prices the credit card company is more likely to benefit. In addition, if strictly applied this could also affect the sale of gift vouchers for online stores like iTunes Music Store or Amazon.This is likely to hit eBay in two ways, less sales, lower prices to factor in the increased cost of purchase resulting in less commission paid on each sale and lower traffic for its payment services arm PayPal.

PalmOne’s take is more easily explainable, in addtion to selling product, PalmOne will make different margins in different territories, there is a heuristic rule in the technology sector that what every a product costs in USD it will sell in the UK for the same amount of GBP. This gives Palm an instant margin boost even allowing for transport and taxes because of the UK’s traditionallly strong currency value.

Kudos to Dave Crocker for his posting on the IP mailing list.

2 Replies to “eBay: This time its war”

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