June 20, 2008, 12:00 AM

eBay offers new perks to buyers and sellers

Buyers who pay with PayPal will be covered for 100% of their purchase on eligible items, instead of the current limit of $2,000. Power sellers that garner high marks from buyers will get a 20% reduction in commission fees.

Don Davis

Editor in Chief

In the latest in a series of moves to revitalize its core auction business, eBay Inc. this week announced an improved buyer protection plan for consumers who pay with PayPal and discounts for eBay sellers that get high marks from customers.

The new PayPal Buyer Protection plan will cover 100% of the price of eligible items that do not arrive or are significantly different than described; the current plan caps that guarantee at either $200 or $2,000, depending on the seller’s eBay reputation rating. The plan covers all items except vehicles.

“Today’s announcement makes it simple for our customers – we`re providing protection whether a transaction costs $50 or $50,000,” says Scott Thompson, president of PayPal, a unit of eBay. The new plan will take effect in the fall.

In addition, eBay sellers based in the U.S. who are paid with PayPal will be protected against claims or chargebacks resulting from an unauthorized payment or an item not arriving.

“We’re combining the power of eBay and PayPal to give all buyers and sellers more confidence and trust,” says Lorrie Norrington, eBay’s president of marketplace operations. “Buyers who pay with PayPal on eBay will be covered, with no limits, on most transactions. Any seller who gets paid with PayPal will be covered on most transactions, too, and can ship to 190 countries worldwide where PayPal is accepted.”

The discounts for merchants will apply to eBay power sellers that receive grades of at least 4.9 on a 0-to-5 scale from buyers in all four categories on which buyers rate sellers. 16% of high-volume eBay sellers will qualify for the 20% reduction in eBay’s commission fees, and those discounts will appear on July invoices, eBay says. Further, eBay announced an additional 23% discount off UPS ground shipping rates for eBay power sellers. EBay does not disclose how many merchants qualify as power sellers.

The announcements came at the annual eBay Live gathering of eBay merchants taking place this year in Chicago. Between 7,000 and 8,000 are attending the event, eBay says.

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