eBay Bans Cash Payments

Bay has officially outlawed cash payments among its 100 million members. The auction site has begun deleting listings from sellers who offer to accept cash, saying that these sellers tend to be involved in scams.

"The U.S. Postal Service tells us it's unsafe, and now eBay is telling everyone that it is unsafe," said Matt Halprin, eBay's global policy VP. "So if a seller solicits or encourages offers to accept cash, [they are] encouraging unsafe payment methods and we do remove that seller's listing."

eBay managers approved the policy in October, but the change wasn't widely publicized or enforced until this week. Recently, several longstanding PowerSellers who have traditionally accepted cash complained that eBay is trying to force them to accept PayPal. eBay purchased the payments company in 2002, and is aggressively promoting its use.

After a rash of fraud last year, eBay and other sites such as Amazon.com warned buyers against paying for expensive items with non-reversible bank wire transfers. In many cases the fraudulent sellers posed as U.S. residents, but were actually outside the U.S. and never shipped merchandise after collecting the payments.

Some eBay sellers offering heavy or bulky merchandise don't offer shipping, and require buyers to pick up their goods. Some eBayers speculate that these sellers could technically comply with eBay's no-cash policy by advertising a policy of accepting checks, then verbally offering to accept cash when the buyer arrives for pickup.

"You've got to wonder though," said one eBayer who asked not to be identified. "Is eBay going to outlaw checks and money orders next?"