t the beginning of the quarter marking the busiest shopping time of the year, eBay's online payment service PayPal experienced nearly six days of system glitches and outages, from Friday, Oct. 8 through Tuesday, Oct. 13, 2004.

An unknown number of PayPal users were locked out of their accounts and could not withdraw funds, complete deals, or use their PayPal debit cards.

The problems were later attributed to a system upgrade made by the company on Friday morning, which caused PayPal's site to crash.

eBay and PayPal officers posted a statement on eBay's Web site that thanked users for their patience and expressed hope to regain their faith in its service.

To make up for the inconvenience, PayPal compensated users affected by the outages, which it called a "PayPal Thank You Day." The company essentially waived all transaction fees made between 12 a.m. and 11:59 p.m. PDT on Oct. 28, 2004.

Users were still charged the fees, but PayPal said it plans to issue credits by Nov. 25, 2004, just in time for thanksgiving.

However sellers in 17 foreign countries including France, Germany, Italy, Spain, Switzerland and the United Kingdom would not benefit from the fee waiver.

Users of PayPal services are typically charged about 2% -3% of the transaction, along with a transaction fee. EBay said it does not expect the errors or make-good to affect its fourth quarter earnings.

PayPal is the leading online payment service with approximately 56.7 million users; in the second quarter of 2004, it processed $4.4 billion in payments. eBay acquired PayPal in October 2002.

Unfortunately, there are always those who try to capitalize on others' misfortunes. Some eBay and PayPal users have reported receiving "phishing" e-mails (when senders try to trick recipients into providing account information) that mention the recent PayPal outage, AuctionBytes.com reported.