The Keys to Surviving the PayPal 21-Day Hold Policy

Good tips, as usual.

As a merchant, I would NEVER ship an expensive item without having cleared funds. Ebay gives NO notice at the time of selling that this could happen if using paypal; instead they let a seller get a rude surprise after getting payment to learn about this policy. As it is insane to ship an item without knowing if the funds are good or not, and also insane to trust Paypal to release your funds as they outline, since they have a long reputation of freezing funds beyond what they state, the best thing is to completely avoid using paypal for your first 25 transactions in a year, and only then use them IF you have positive feedback and meet the other criteria. But in reality, it is best to completely avoid them, and instead have a buyer pay you directly with a moneyorder or check, or use google checkout for credit card payments. I used to not like google checkout, but now they are looking good as an alternative to accepting paypal payments on ebay. I have a merchant account, so I will use that, but for those who sell infrequently, just to clean out their garages, or make some side money, beware. Use google checkout or have your buyers pay you directly. This whole setup screws the seller and only really protects paypal. If paypal really cared about protecting the seller, they would not urge the seller to quickly ship out their item without having confidence the money was cleared. Instead ebay would set it up so that all buyers would know they have to wait 21 days before their items are shipped, just like paying with a check, so paypal and the seller know the funds are good. Anything else is an insane way to do business as a seller. Do you think Walmart is going to ship out online orders, letting paypal hold their money for 21 days? I don’t think so.

CEO, BBFG, LLC
McDonough, GA 30252

email:info@xxxxxxxxx.com

12-10-2008

To: Office of the Attorney General State of California

Re: Paypal account “xxxxxxxx@xxxxxxx.com”

cc: Federal Trade Commission, Office of the Attorney general state of Nebraska, Complaint Assistance Unit of the Division of Consumer Services of the Department of Consumer Affairs, Better Business Bureau, American Express, Chase, FBI Fraud Unit, Paypal

Dear Madam/Sirs,

We are submitting this complaint to compel you to renew your investigation of Paypal for ongoing fraudulent activity and to seek regulation of this financial entity to the accountability and rule of United States law.

Our story is a shocking symptom of the problem at hand. Paypal is withholding $33,306.86 that was successfully reversed to our Paypal account on November 7, 2008 without claims or disputes by any other party. Paypal initially declined to approve the transaction that became reversed, and no money changed hands between buyer and seller. The buyer made alternative payment arrangements with the seller because Paypal also failed to deliver the payment venue with the ease its advertising promises. Although no claim or dispute by the seller has been placed on the amount in over 30 days, Paypal continues to hold our $33,306.86 without offering any reason or date of resolution after repeated phone calls.

This presents numerous problems for which we think Paypal should be investigated and regulated. This pattern of milling and holding legitimate charges from honest customers on a large scale, in an imperious manner, is self-evident to anyone who investigates the volume of Paypal complaints. Whether this pattern is suggestive of secondary gain or whether its just bad business service is the real concern at hand for the US government. If the former is true and Paypal wishes to fund their own investment strategies with customer money, then customers at least need a Prospectus for full disclosure prior to that money being used elsewhere as “capital” to Paypal. If the latter is true then customers will still need some sort of consumer protection from mayhem the likes which we are experiencing. Paypal must not be allowed to continue to advertise “ease of use” while ensnaring customers in charge back schemes and debacles for which there is no accountability to a third party. As such Paypal is a threat to many businesses who find their cash flow suddenly impeded by questionable Paypal decisions for which their is no governing authority to mediate. In many cases businesses are financially damaged by such undesired mismanagement.

To this date, we still have not received our own money returned to us. Nor was a purchase completed. And, our credit lines continue to be inaccessible while Paypal holds the funds.

We will readily submit any necessary evidential documentation at your request.

Sincerely,

This is a tactic to put money into their [paypal’s]Bank and gain interest on it for 21 days. America is in a financial crisis, like $500 + Trillion of derivities debt and 3 leading banks combined liquid assets are 1.7 Trillion. Time to take alternate steps to secure our money transactions.

I used to use eBay 100% of the time when selling items.
Thanks to their continued and escalating abuse of sellers, that total is down to about 20%.
I only use eBay when I can’t sell on Craigslist, my first choice.
I use Craigslist a majority of the time.
I believe this is why eBay/Paypal have taken to stealing customer’s money in an attempt to make up for lost revenue.

Keeping customer funds and collecting interest is stealing. Any interest gained from my money is also MY money, not Paypal’s.
How the US Government has refused to intervene on the behave of Americans on this issue is beyond my comprehension.

Again, Paypal needs to pay their customers their due interest gained on money’s held by Paypal.

This crap should be illegal. It is MY money, not theirs and they should have no authority to hold MY money, they are not a bank, or the Government. I think a class action is in order.

Is this only on eBay sales?

If so I will contact all my past eBay customers who LOVE my OOAK design work and direct them to my website whenever I am overstocked and I will sell at 75% off.

I don’t think my customers would purposely take advantage of me. I know that sounds naive but they can’t get what I sell anywhere else. Therefore, I do send out “pleads for feedback”. One of my customers even sent feedback before they received their jacket.

However, I don’t send 1st class int’l anymore because I did recently get burnt. Maybe it is the P.O. in Canada, but PayPal could see that it was shipped via the customs number, but that doesn’t prove the buyer received it, so either way, USPS 1st class isn’t reliable enough, which means the buyer pay more for shipping.

A seller would have to be rich or crazy to ship any item for which funds have not cleared. Ebay and Paypal have given the green light to thieves, and that they will help facilitate any theft someone wants to perpetrate on sellers.

Woves in sheep’s clothing they love us so much, and the cow jumped over the moon folk’s it’s the bottom line they care about. a great comany cares about it’s people and build’s a thrust with them .few exist any more now many company’s make moves that benafit them ,were an after thought but o do they kiss ass when there smal or they fall.

I just found out about the 21 hold policy the hard way, by surprise.

It seems to me that whose money is being held is a matter of who still has the item. My auctions already say that I will hold an item for 10 days if payment is made by check, to make sure the funds clear. Now my auctions will say that I’ll hold payments made by paypal until the funds clear. The buyer will be informed that if they use paypal, paypal might hold THEIR money for 21 days or longer, but that I will ship as soon as THEIR funds clear just as I would for payment made by check.

I will suggest that they pay by money order or some other means such as Moneybookers, if that system is still available.

Now let Ebay and paypal deal with the FACT that they are holding the BUYERS money.