Right as many of you are aware, I run an online internet server business. One of the payment options is PayPal and this is actually the preferred method of payment by over half of my clients. So the loss of my PayPal account, even temporarily, could have a bad knock on effect on both my business and my livelyhood! So I can't afford to be months without an account!
PayPal accounts are free, its fast to send money (instant) and is more secure then traditional payment processor's as the merchant never gets to see your credit card/bank details, whereas with my proper credit card processor I see all the clients credit card details.
But PayPal have a very bad reputation, especially with regards to seller protection (from what you read online, the buyers have 100% protection whereas the sellers have 0 protection).
Now I also use my account on eBay like many other people (its actually eBay who own PayPal).
I recently sold a mobile phone on ebay for £320. The buyer paid using his PayPal account, and I was happy to accept it as his account and address were verified. If this had not have been the case I would have simple refunded the payment as I would not have been happy to accept a payment from an unverified account.
Anyway the phone sold on the 21st December, and as per the terms of the listing, it was sent out the same day via Royal Mail Special Delivery. The phone was recieved by the buyer the next day and this had been confirmed by Royal Mail's online tracking service. The phone was sent to the buyers confirmed PayPal address.
Anyway, I withdrew the money for the phone to my business bank account and all seemed fine.
However on the 5th January I recieved an email stating the payment hasd been reversed and that PayPal had issued a Direct Debit Request to my bank to obtain the funds and place them on hold! They had also placed a hold on all funds that were already in the account and also suspended any bank transactions and most account functions (including things such as being able to change/remove credit card details etc).
The reason for the problem was either due to an unauthorized transaction using the buyers account or a credit card chargeback.
Fuming at this, I went straight down the bank and withdrew every single penny from my business account, took the £300 max out of the ATM and the rest over the counter, because I was not getting ad off by PayPal or a scamming buyer.
Anyway, they asked for a lot of details regarding the transaction, which I promptly sent to them via email.
I had a response back thanking me for the details and advising me that I should open up a resolution ticket, but as far as I was concerned PayPal had all the details they requested and indeed needed, so I could not be bothered messing around with their resolution service.
Now I didnt hear anything over the weekend, but I had planned to open up the resolution ticket this morning anyway, just to help things along.
Anyway I got up this morning, and had an email from PayPal telling me thank you for the details i sent to them and that they had been forwardedto the relevant department. So I though nothing much of it and then just as I got in the bath I realised that quite a few subscription payments come into the account today, so I had to cancel them asap.
Anyway when I got out of the bath, I checked my emails and oud over £150 worth of subscription payments had already gone in. So I thought there was £150 lost until the situation is resolved.
So I logged into my account to cancel other payments, and amazingly the account was now in credit, wih the funds that had been sittng in there previous to the hold that was placed on the account.
I checked the latest transactions and noticed that the hold on the account had been removed and I had won the case!!
Now PayPal have a terrible reputation with regards to problems, with horror stories of them placing accounts and funds on hold for upto 6 months and sellers losing money due to chargebacks.
But I think that my scenario just go's to prove that if you do everything in compliance with their rules, and provide the information they request as soon as you can, then you ARE covered by their seller protection scheme and you WONT have many problems with them.
Which leads me to believe that most of these "horror stories" that you read must be a result of people not fully complying with their seller protection policy and being stung as a result, and having no protection from PayPal.
If you ever sell any high value good using a PayPal account, you should make sure the transaction meets the following criteria:
- You need to have a verified PayPal Business or Premier account
- The buyer needs to have a verified PayPal account
- The buyer needs to have a confirmed address
- Only post the item to the buyer's confirmed address
- Make sure the delivery is as fast as can be
- Make sure that the delivery can be tracked online
- The protection only applies if the goods are tangiable
- Make sure that if the good are of a "very" high value, you use an insured delivery service which exceeds their value.
- In the event of a dispute, send PayPal all the details they request asap.
Follow these rules and like me, you will be fine in the event of any disputes.
I hope these tips help prevent you from being scammed in the future.
THANK YOU PAYPAL! Lol!