Paypal Has placed a 100K Reserve in My Account

Temp04052017a
Contributor
Contributor

I run a sports card business online and made a large sale just before Thanksgiving to the tune of $29,700 through eBay.  The buyer paid immediately, I shipped express and they left positive feedback the next day.  Paypal came along and said sorry Sir, but we're holding the funds for 180 days because we're not sure if the buyer will do a chargeback in the future.  Interest free short term loan for Paypal ... not happy.  

 

Monday marks 90 days where Paypal said I can call in and ask for the funds to be released.  But over the last few weeks, I made three additional high dollar sales in the amount of $75,000.  Again, the buyer (who has 11,000 feedback, 100% positive and who routinely makes big dollar purchases) left feedback the day after receiving the items.  Two weeks later, today, I log into Paypal and notice the reserve has moved from $29,700 to $105,000.  I pulled the $75K out from my account when the last buyer paid, so for the next six months, Paypal will be taking 100% of my sales to cover the reserve (a reserve which I likely will never fully hit).

 

How is this legal?  How can I pay them $3,000 in Paypal fees for the right to keep the money I've earned, and they hold the money for six months, interest free (and 9 months on the first $30,000!).   This is straight up theft and if they spent a minute to simply ask the buyers if they're happy with the cards they received, they'd know there is 0% chance of fraud here, 0% chance the items will be chargedback.

 

I don't get it.  For the next six months, I'm supposed to pay my eBay fees, my store fees without any income from the items I'm selling, while Paypal is earning interest on my money, and taking fees from me at the same time.

 

CROOKS.

Login to Me Too
6 REPLIES 6

Whac-A-Mole
Frequent Advisor
Frequent Advisor

what you sell is high risk,and the amount is large,based on past history,PAYPAL must have experienced high chargeback .

Since a buyer can file chargeback in 180 days,there is no guarantee your buyers would not file chargeback,after receiving the item and leaving you feedback.

how did you manage to withdraw 75k when there is reserve on your account?leaving you a negative reserve?

I doubt PAYPAL will loosen your reserve requirement due to the nature of the items you sold,you may want to talk to some banks which offer merchant account to receive credit card payment direct,or find  way of accepting non credit card payments.  

Login to Me Too

Temp04052017a
Contributor
Contributor

The reserve was placed two weeks after the completed transactions, so the money had already been withdrawn from the account ... simply that over the next six months, any sales I make will fill the reserve until the $105K is met.  

 

I've had the business for many years, last four years over 750 transactions and 200K each year.  These may be high dollar transactions but selling high end LeBron chrome RC's is not "high risk" considering I've been buying them forever.

 

Just an excuse for Paypal to hold the money.  Buyer has 11,000+ feedback, buys higher end cards all the time, left positive feedback and it's absurd Paypal can simply "lock the account" so for six months, I actually have to pay eBay fees and Paypal fees on my sales without any inflowing income.

 

Ridiculous. No wonder these guys are in class-actions every year.

Login to Me Too

sharpiemarker
Esteemed Advisor
Esteemed Advisor

PayPal have to manage risk somehow.  It's like Minority Report, and PP security and risk management system is precogging accounts and activity to prevent loss. PayPal can't go after theft and fraud legally so they make it an internal matter, establishing holds, reserves, all of which is in their user agreement and agreed to when you signed up.  Shouldn't be a surprise.  If you're not cool with the holds, simply close out your account and get a merchant account.


Kudos & Solved are greatly appreciated. 🙂
Login to Me Too

Whac-A-Mole
Frequent Advisor
Frequent Advisor

You may want to speak to your bank for a merchant account,make sure it        works with the 3 gateways approved by Ebay.

With a merchant account,your bank can tell you more about any chargeback ,do a better job presenting your case and tell you what the other party said.

Sales proceeds will be deposited in your account within 48 hours (domestic),chargeback fee varies,and it could impose reserve /rolling reserve if there are chargebacks .

Negative balance in your Paypal account is not good,which means they have nothing to hold on to when chargebacks are filed.

if these are your regular customers,you can consider extending credit to them,or allow them to pay by installment and accept non credit card payment.

Login to Me Too

DPCreations
Frequent Advisor
Frequent Advisor

Merchant accounts are great as they will exend credit as they wait for sales to fully process.  The downside could be that you will be subjected to a full credit review before being accepted for a merchant account.

 

PayPal does not do a credit review for it's members; for that reason PayPal holds money to cover for risky sales an disputes.

 

 

Login to Me Too

sharpiemarker
Esteemed Advisor
Esteemed Advisor

PayPal funds that are on hold are not put in interest earning accounts.  Only funds held in PayPal Balances that are available for your use are.


Kudos & Solved are greatly appreciated. 🙂
Login to Me Too

Haven't Found your Answer?

It happens. Hit the "Login to Ask the community" button to create a question for the PayPal community.