Hacker News Reader

Comment by 55555 | Hacker News Reader

I have had XXX,XXX funds locked and a business wrecked in this exact same way but I'm explaining why it happens. If they didn't do this, they would be exploited. The real issue here is that, because they're a monopoly, the customer service sucks, and they don't care at all to let you prove you aren't running a scam. To the sibling commenter: No, what Amazon is doing is not a legal requirement. Yes, they act like PayPal now.

View on HN

> If they didn't do this, they would be exploited

Amazon are offloading their fraud risk onto random small businesses and the nuance of their platform gives the small business no recourse. In a fair platform, you could resolve something like this pretty easily. I'm sure you agree, but it's worth noting explicitly. It's not a stretch to imagine Amazon are allowing for this "bug" in their support system to remain because it saves them money.

> In a fair platform, you could resolve something like this pretty easily

How? It seems that Amazon could provide better communication, but how would this situation be easily resolved?

A human talks to another human and they discuss the situation, figure out what documents or proofs they could provide and come to an agreement. Make those humans lawyers if you have to. It's not some unknown landscape of grey area in content moderation, it's a marketplace holding onto another businesses money unfairly. We can't treat it like a social network or other ephemeral software platform, this is real transactional commerce and Amazon should behave like it and provide support to resolve things like this quickly.

To argue Amazon's side here, they most likely don't view this as unfair withholding. From Amazon's point of view, this seller moved from FBA to self fulfillment and had a massive increase is sales. The OP said they were averaging $1M per month, and that Amazon had held $4.2M for 15 days, so it looks like they'd had an up to 8x increase in sales while simultaneously moving to a system where Amazon had no oversight.

As I said, while I can feel the pain of getting automated replies from a company that owes you a lot of money, I don't think this situation lends itself to easy solutions without a waiting period, even if you involve lawyers. There are circumstances where payment processors will hang on to the cash for much longer than this. Concert tickets come to mind.

Amazon doesn't even have real oversight in their own FBA program. They comingle fake products all the time and then also punish sellers when customers receive those fake products.

I agree. In order to get access to an API which enables you to proxy web requests through a network of participating consumer computers, I had to do a Zoom meeting a few years ago with the service provider.

Obviously their service could be used nefariously and they asked a few questions, wanted to see my office and validate a few things to ensure I was going to use it for valid purposes. (I used it to scrape publicly accessible data for research purposes).

Sometimes the low tech, manual human process is the best final filter.

Release a small fraction of the fund, let's say 30%, maybe limited to transactions deemed older/safer. It's trivial and it's enough cash flow for the vendor to continue operating until the next release.

Amazon has two days delivery for most orders. They can quickly get customer feedback (product review, refund, shipping issue). They could even directly question customers "have you received product? Yes/No".

They could easily determine that a vendor is legit if they wanted to, they do not need to hold funds for months.

What PayPal does or did (according to stories I read a while back) was freeze the funds and then simultaneously advertise a loan to the customer. So I guess we could subtract the interest rate charged by other lenders for that kind of loan from the rate that PayPal would charge, to get an estimate of the risk that PayPal believes it is mitigating when freezing people's funds.

Sounds odd for PayPal to do that (might be a US thing?). They're the one owing you money but you're the one who has to pay extra fee?

The purpose of delaying was to prevent fraud and this achieves nothing to prevent fraud, the vendor can just take the loan and run away. If PayPal is confident enough to give a loan, they're confident enough to release some of the funds, but they prefer to force a loan on the account holder and get extra fees?

I don't expect that going well in many jurisdictions. Consider the massive power imbalance and usually shorter legal timelines to close SME payments, that give more weight to the case.

Yea that's really the question I have in the other reply I just left.

Does it save them money? Maybe in the short term. Maybe even in the long term if the PR cost doesn't hit them at all.

I think as people this is a reason where we need to hold them accountable by pushing our businesses back to platforms where we have more control, and pushing our selling habits back to those same platforms.

I don't think Shopify is ideal, but I do think it's better for both sellers and buyers than Amazon.

>If they didn't do this, they would be exploited.

You're implying that the way they're currently doing it is the only possible way to deal with the problem.

Exactly, the problem isn’t that they are protecting themselves against fraud, it’s the way they do it. There is so much low hanging fruit they could implement to do better than this, it’s inexcusable.

That's fair.

What makes it so insane is they still get exploited on both the buyer and seller fronts. Really though the crux of the problem if they want to do this type of enforcement is they just need a better internal policy of expedited processing of reviews for accounts > some age && > amount of held funds.

If they ramped up this current type of "enforcement" to deter fraud it's going to come with a PR cost.

>because they're a monopoly

They're not a monopoly.

Yeah, they're not a monopoly. And my business isn't a monopoly either. But, notably, not in quite the same way that they're not a monopoly.

Sure, they are not a monopoly yet when you look at the whole of e-commerce. But Amazon effectively is a monopoly for at least books and probably electronics, depending on where you live.

Quoting from an article published in 2018: https://www.retaildive.com/news/amazon-beats-best-buy-as-top...

> 60% of every incremental dollar being spent online in North America is gong to one company — Amazon. No matter what you sell, Amazon is coming for you

They exercise monopoly power, by the law that makes them a monopoly.

Getting the JD to enforce monopoly laws is a whole other problem

In the same sense a giant Walmart in a 5000 people town is not a monopoly

They will after the COVID crisis eases.

mind you shopify is acting the same way too. i get that they have to protect themselves, but when they hold all the money and power they have little incentive to resolve things quickly.

Reply on news.ycombinator.com