Jason Del Rey

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“Healthy Tension” Emerging Inside PayPal as It Looks to Reverse Poor Customer-Service Reputation

David-Marcus-March-2012

PayPal says it’s finally serious about addressing some of its biggest customer-service issues, which its president admits the eBay unit has at times “become known for.”

But can a company that hasn’t been known to wow any of its customer groups — business owners, consumers and developers — now start excelling at servicing all three?

“It’s hard, yes, it’s hard,” PayPal President David Marcus said in an interview on Tuesday. “You have to have a group solely focused on consumer problems, one focused on merchant problems, and one on developer problems. We have a healthy tension there because it’s a culture change for the company.”

Since Marcus took the reins in March of last year, PayPal has made a list of the 30 top issues it needed to rectify. So far, 80 percent of those have been addressed, he said.

The fixes are aimed at issues ranging from improving the password-recovery process to putting a system in place that is working hard not to penalize legitimate sellers in charge-back disputes with shady buyers.

“We’ve tweaked our models to catch more bad guys and way fewer good guys,” Marcus wrote in a blog post published today. “Hundreds of thousands of customers who may have experienced holds last year based on our policies are no longer impacted.”

The company said it has also started absorbing $2.5 million a year in losses related to disputes between buyers and sellers over claims of counterfeit, low-priced goods. In these instances, the company won’t pull money from a seller’s account — giving them “the benefit of doubt” — but won’t penalize a buyer, either.

The result? PayPal said it has experienced 40 million fewer customer issues this year compared to last.

Sounds like a great start. But, as Marcus well knows, a tainted reputation is not cleansed overnight. Or even in a year.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work