Sellers Sue Amazon over Payment Holds


#1

Just for the sake of discussion. Doesn’t Amazon only hold funds for 90 days if you’ve been suspended?

[http://www.ecommercebytes.com/cab/abn/y13/m03/i19/s02]

Sellers Sue Amazon over Payment Holds-

Third-party sellers on Amazon and eBay are different in many ways in terms of size, location and the types of items they sell, but they all have at least one thing in common: when they ship an item, they want to be paid quickly. After all, they must pay for the shipping outlay as well as all their other expenses.

So when marketplaces place holds on payments, whether its Amazon or eBay’s PayPal payments service, it puts a squeeze on sellers.

eBay sellers sued PayPal over its payment holds and eventually settled, and now it’s Amazon’s turn to face sellers’ wrath.

Two Amazon sellers filed a class action lawsuit against Amazon Services LLC on Friday for its payment hold practices. Jo Ellen Peters of Kentucky and Ken Lane of Texas allege that Amazon routinely holds payments for longer than permitted by its own Participation Agreement, and for longer than permitted by Washington law.

“Moreover,” according to the complaint, “on a routine basis, Defendant (Amazon) suspends or cancels accounts, and places holds on sellers’ funds. While Amazon contends to have the contractual basis, in some instances, for holding the funds for 90 days, Amazon routinely holds funds beyond the contractual period, often well in excess of 90 days.”

Friday’s complaint against Amazon says the marketplace contract is provided on a take it or leave it basis. “There is a tremendous disparity in bargaining power, as a predominant portion of members of the Class must be able to accept payment via Amazon in order to sell goods on the Amazon.com website.”

The plaintiffs allege that the scale of Amazon’s practice regarding payment holds makes it “lucrative” thanks to the fact that “Amazon keeps the interest and other gains generated by the funds owed to Plaintiffs and the Class and utilizes the available cash in its business.”

The sellers go on to allege that, “By holding on to this daily cash flow for only a few days or weeks, Amazon is able to invest this money in money market funds, marketable securities and other investments, and utilize the cash as working capital in the operation of its business. On information and belief, Amazon has reaped and continues to reap many tens of millions of dollars annually from this practice.”

The complaint also alleged that “Numerous articles, web posts, blogs, and other online sources reveal widespread complaints about Amazon’s practice of holding sellers’ funds. Numerous complaints have been filed with the Washington Attorney General’s Office about Amazon’s business practice and a substantial number of those complaints relate to lengthy and improper holds on seller funds by Amazon.”

The Seattle Times, which wrote about the lawsuit on Friday, said the Washington state Attorney General’s office had received about 120 complaints in three years from Amazon sellers who accused the company of arbitrarily withholding their payments.

Amazon.com spokesperson Erik Fairleigh told EcommerceBytes the company would not be releasing comment. “We have a longstanding policy not to comment on active litigation,” he said.


#2

This was discussed in another thread. Some have supposedly figured some of the people in the lawsuit were previously on these boards.

As for the 90 day hold, they keep the funds for a little longer than 90 days. They release the funds to your regular payment cycle after the 90 days are up. That means it can be released between 90 and 104 days, depending on when your payment cycle is. Then there is the bank transfer time too.

Maybe Amazon should update the holding period to say that payments will be released on the next payment cycle after the 90 days are up.


#3

necrothread


#4

I am becoming increasingly annoyed with Amazon because each time I am told the next week will be a dispursement week (while still holding some of my funds), I am only shown (a few days prior to dispursement) that my funds will be held an ADDITIONAL 1-2 WEEKS! This is really getting crazy because I cannot understand WHY Amazon will say they are releasing funds (from previous sales that were CLEARLY ALREADY DELIVERED) to holding it even longer!

These dates are now going WELL PAST the 2 week “reserve” holds I was previously told about! Everytime I consider giving this selling on Amazon a chance, something else happens that makes me not trust AMAZON even more! I have NO claims, NO bad reviews and NO problems with sellers so please don’t respond and tell me that I need to check into that! I’m simply beginning to believe what SO MANY people are saying about Amazon–they are simply holding the money of their sellers to collect interest or something because this is just WRONG! I could have sold on Ebay (or even Craigslist in this amount of time) and had MY money a lot sooner!

This is REALLY SO UNFAIR and I am SO ANNOYED!


#5

Saying something is UNFAIR is not a good argument. It didn’t work as a child and doesn’t work in business.

If you just started, the first payment takes about a month. This is to week out the scammers who list “product” and ship nothing or rocks. A delay in payment prevents these type of scammers from cashing out before they are found out.

You likely misunderstood what your payment schedule is. If you have a new account, payments are held on reserve for 14 days in your pending total. When the 14 days are up, they are put in your active total. That active total is disbursed every 7 days.

This is still a NECRO thread. If you have any questions on payments, start your own thread.


#6

Well, does anyone know how the lawsuit turned out?


#7

It works in government, though.

Edited by: Bubmack on Jul 16, 2014 10:52 PM


#8

I am not sure why any of this is a surprise and no it isn’t illegal for amazon to do it, they are all in the fine prints, in fact every financial institution does this.


#9

It’s only been a few months. Lawyers well keep it tied up for years. These things do not go quickly. Most likely they will eventually settle.


#10

More than a year now.

The lawyers probably advised the Kentucky woman not to post about it.
If and when they settle, one of the conditions will be not to reveal the details.


#11

You woke up the wrong thread. Your situation has nothing to do with why that lawsuit got filed.

Amazon is now even tougher with suspended sellers than they were two years ago. Now they even stsrted to take back the last reimbursement amount if they can several days after they send it to a seller’s bank account.


closed #12