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Yeah. I'm selling some old stuff on eBay, using money to buy newer stuff, drawing the difference from the bank when the PayPal balance is not enough. Repeat. A
by Florin_Andrei 15y ago
Yeah. I'm selling some old stuff on eBay, using money to buy newer stuff, drawing the difference from the bank when the PayPal balance is not enough. Repeat.
After not even two cycles of this, I get an email from PP saying:
> Starting MM/DD/YYYY, money from payments you receive will be placed in a pending balance for up to 21 days. By doing this, we're making sure that there's enough money in your account to cover potential refunds or claims. [...] We reviewed your account and determined that there's a relatively higher than average risk of future transaction issues (such as claims, or chargebacks, or payment reversals). We understand that it may be inconvenient to have your payments temporarily held but please know that we didn't make this decision lightly.
That's right. You didn't make this decision lightly. You made it out of greed. You're simply looking for ways to keep my money longer than necessary in order to accrue interest, or whatever. How is this legal? It's my money.
Fortunately, I noticed that selling stuff on Amazon is not too different from eBay. So I'm thinking to move my transactions to Amazon and stop using PayPal altogether.
- iamgilesbowkett 15y agoit's legal because PayPal is technically not a bank.
- Florin_Andrei 15y agoThen the law is wrong. I mean, let's drop the literal-mindedness for a second. It's my money. They are holding it hostage. I want it back. They should not be allowed to do this. Still nothing wrong with the situation, in your opinion?
- anigbrowl 15y agoNo, you're wrong. Nobody is forcing you to use Paypal, you accept payment that way because it's convenient for both buyer and seller. You could advertise on Craigslist, but would you feel comfortable if someone says, 'I will send you a check, please ship to this address'? No, because the check may be bad and you could have a big financial headache. Likewise, many buyers would not be comfortable sending a check or taking a large amount of cash to buy something from a stranger. Finally, eBay allows you to reach a much wider market than you could through local classifieds, and takes care of almost all the administrative overhead of the transaction. As a buyer, you want this security so that you can pay a few thousand $ without the fear of getting nothing in return. As a seller, you have to treat the 21-day float period as a cost of doing business, or else impose less generous terms of your own (and see less interest from wary buyers who do not want risk). In the business world suppliers are often expected to provide 30 or even 60 days of credit to commercial customers, and dealing with this is the essence of cash flow management. It seems you want all the benefits of having your money instantly, but that someone else bears all the risk. The opportunity cost of the 21-day wait is the risk premium you pay for access to a large marketplace.
- blantonl 15y agoThis is the absolute best response to this post that we could ever have expected. Nailed it.
- blantonl 15y agoThis is the absolute best response to this post that we could ever have expected. Nailed it.
- blantonl 15y agoThis is the absolute best response to this post that we could ever have expected. Nailed it.
- blantonl 15y agoThis is the absolute best response to this post that we could ever have expected. Nailed it.
- loopdoend 15y ago
- jacquesm 15y agoTechnically, paypal is a bank: http://en.wikipedia.org/wiki/PayPal#Bank_status http://en.wikipedia.org/wiki/PayPal#Bank_status It depends on where you are, in the EU it definitely is a bank.
- bowyakka 15y agoNot that being a bank means much in the EU, see the situation in quite a few member states.
- kprobst 15y agoWhen your money is in PayPal's hands, it's technically theirs because they are not a financial institution. Your money is not insured or protected in any way other than how PayPal deems appropriate. They are not liable for anything, unlike a bank. So it's not only illegal at all (perhaps immoral but hey), it's also perfectly OK because _you_ agreed to their terms of use when you opened an account with them.
- icebraining 15y agoThat's only true in the US; in the EU, Paypal is actually a bank, registered in Luxembourg.
- ricardobeat 15y ago> determined that there's a relatively higher than average risk of future transaction issues Minority Report?
- pbreit 15y agoI can assure you they do not do it to earn interest. PayPal loses far more money on chargebacks, fraud, payment reversals, dispute resolutions, etc. than it makes on a measly 21 days of interest. Further, "hold backs" (aka "reserves") are very common in bank-operated credit card merchant accounts.
- ryan-allen 15y agoI wonder how much money they actually lose on a chargeback though? Chargebacks are debited from the merchants account (i.e. the merchant wears the cost of the fraud). So despite the origin of the fraud, the merchant wears it. This is at least true with digital goods that can't be returned, I don't know what the policy is in regards to physical goods and PayPal.
- dangrossman 15y agoI think it's fair to say the answer is "a lot". Especially in cases of fraud, there's not going to be any money in the merchant's PayPal account to debit. They were gone long before the chargeback came through, and they aren't going to leave a legitimate bank or credit card linked to the account to go after either. PayPal takes those losses.
- pbreit 15y agoPayPal losses are somewhere in the teens of basis points. Not all chargebacks are passed on to merchants.
- tibbon 15y agoSo why didn't they do that from day 1 when i opened my account 8 years ago?
- pbreit 15y agoBecause it's not very user-friendly.
- 15y ago
- rickyc091 15y agoSorry, I had to laugh a little when I saw this since I received the same notice recently. I've been using eBay / PayPal since 2002 with 100% feedback and hundreds of transactions, so you'd think they'd treat me like a loyal and valued member, nope. I think my trigger was that people were giving me refunds for my purchases and I was giving people partial refunds as well. During the holidays a lot of people I purchased from made mistakes and left items out so they decided to give me a little something. I guess all that buying, selling and issuing / receiving refunds cause them to flag my account.
- lutorm 15y agoI got that notice too recently, and I've had no activity in my Paypal account for more than 6 months, so I'm not sure what their rationale is...
- jasonlotito 15y agoBanks do this as well. In fact, it's fairly common. > It's my money. Actually, no. See, if someone pays through PayPal with a CC, they are paying on credit. Not cash. Credit cards work through credit card companies and banks, and they have rules. Because you are using PayPals association with these banks, you have to play by PayPals rules. If you want to accept credit cards, you can do so without PayPal. Just get it from your bank directly, but it won't be as easy as setting up a PayPal account.