Question about using PayPal for digital art commissions

[ethira]

I perform a freelance service where I offer digital art commissions. They pay 50% of the total before I begin. I make the art. I show them a watermarked version. They send the other half of the payment. I e-mail the file of the art. I require this down payment for my time in case my client decides to flake, rendering my hours of work wasted. I recently decided to use PayPal to perform this service. When a client sent a down-payment, it came to my attention that PayPal wanted to hold my money for 21 days unless I confirmed that the good was shipped and received. Obviously there's nothing to be shipped. It's a down payment. And digital art can't be shipped regardless. What is the best way to handle a digital art commission service to avoid these 21 day holds? What about handeling down payments? I also want to add that I don't use eBay at all and never have. Thanks in advance.

[DPCreations]

You need a signed printed contract for the art and  you need a signed printed contract for the installment payments.  These need to be written so the ar enforceable through our legal system.

PayPal does not provide any seller protection for virtual items so you are on your own.

Furthermore, PayPal does not support or protect insallment payment.

You need a separate contract and a your own merchant account.

[ethira]

Okay, understandable. Assuming I do away with installment payments completely...Is there a certain setting the client must toggle during their payment process that will prevent the 21 day hold? Since there is no shipping. And assuming they received the art before payment.

[sharpiemarker]

You really can't get around the 21 day hold if you lack selling history, or pattern on sales change drastically, or have poor selling performance history.  PayPal mostly controls that and the regimen is temporary until PayPal determines you have a establish good selling performance and will release you from it. You can try to get payment sooner: 7 days (domestic payments), 14 days (intl payments) by marking the transactions as processed but since it is digital goods, there is a chance you might have to wait out the full 21 days.

See here for more info:

https://www.paypal.com/us/selfhelp/article/why-is-my-payment-on-hold-or-unavailable-faq1987

[Whac-A-Mole]

You can get around Paypal hold and qualify for seller protecttion by mailing a hard copy of your work to the client,with online viewable tracking.

once tracking shows it has been delivered to his address,money would be released in 3 days,if you have a history of selling,then fund should be available immediately.

to mail a copy with tracking,cheapest would be USPS first class 2 ounces,$2.60.

Now if your client opens  a dispute of item not received,you can show the tracking ,if he open a case of item not as described,then it depends on other factors.

[Whac-A-Mole]

Whether you offer your service on Ebay or not is not relevant ,what matters is digital goods does not qualify for seller protection.

Back in old days of ecommerce,buyers are willing to buy a money order,postal order,or write a personal check,VERY FEW SELLERS HAVE the ability to accept credit cards,now they think it is too much work to do so,besides they have to have the cash on hand,so why not Paypal? 

If what you do is scarce and in demand,you can insist on money order,postal order ,western union,wiretransfer !