PayPal Reversal Fees Are Ridiculous

[positivebalance]

I receive a payment, and right off the bat, PayPal shows an alert saying they need to verify it due to potential suspicious activity. Soon after, the payment goes through to me. Logic states that if it went through, then it's been verified, right? Nope! Not in the **bleep** world of PayPal. The payment is soon reversed after I've received it, minus about $9 in reversal fees. I had $0 in my account, so then PayPal automatically reverses a $500+ transfer to my bank account just so it can cover a -$9 account balance due to the payment they authorized and then reversed. (Funny aside, if your account balance is exactly -$0.01 and no more for the first time, PayPal will automatically email you saying how they've "generously" covered the balance and that they appreciate your business. Scumbagging 101).

What bull**bleep**.

/rant

Summary

PayPal allows potentially fraudulent payments to go through and get reversed at the recipient's expense so that they can profit from reversal fees. Crap like this is why I tend to steer people away from PayPal whenever possible.

[thriftviille]

This is just another one of Paypal's many mistakes.  I am very tired myself of all the fees from Ebay and Paypal, by the time they rake you over with fees you practically sell your items for nothing, it is almost not worth the hassle.

[profdata]

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@positivebalance wrote:

I receive a payment, and right off the bat, PayPal shows an alert saying they need to verify it due to potential suspicious activity. Soon after, the payment goes through to me. Logic states that if it went through, then it's been verified, right? Nope! Not in the **bleep** world of PayPal. The payment is soon reversed after I've received it, minus about $9 in reversal fees. I had $0 in my account, so then PayPal automatically reverses a $500+ transfer to my bank account just so it can cover a -$9 account balance due to the payment they authorized and then reversed. (Funny aside, if your account balance is exactly -$0.01 and no more for the first time, PayPal will automatically email you saying how they've "generously" covered the balance and that they appreciate your business. Scumbagging 101).

What bull**bleep**.

/rant

Summary

PayPal allows potentially fraudulent payments to go through and get reversed at the recipient's expense so that they can profit from reversal fees. Crap like this is why I tend to steer people away from PayPal whenever possible.

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There is no $9.00 fee for payment reversals.

The $9.00 looks like a reversal fee, but is actually paypal reversing their part of the payment.

Usually your paypal account just goes negative till you supply the D/C or signature confirmation number, and it shows delivery.

Did you ship with online viewable signature confirmation since the transaction was more then $250.00.  If so does it show delivery.

[positivebalance]

This was a digital product, so there was no shipping involved. I'm not saying there is a flat $9 fee. The user that paid with a stolen PayPal account sent me $299. PayPal automatically deducted $8.97 in fees for the transaction. However, the transaction was made with a stolen PayPal account. PayPal then refunds the money to the account the money was sent from (and hopefully flags the account). Instead of eschewing a transaction fee, PayPal still takes a fee for a reversed payment.

1. User sends $299

2. PayPal extracts $8.97 in fees

3. I "receive" about $290 (I say "receive" because PayPal has already flagged the payment and it has not cleared.)

4. PayPal lets the payment go through to me (Surely this means the payment is safe, right?)

5. PayPal then reverses the full amount of the payment of $299 seconds later to the account the money was sent from. Instead of simply refunding the full amount and eschewing a transaction fees, PayPal STILL TAKES A FEE, and I have to cover it.

6. I'm down $8.97 because somebody decided to pay me with a stolen PayPal account.

+$290.03 (Money I receive out of $299 sent)

-$299.00 (Money PayPal refunds to user)

-$8.97 (Net)

The infuriating thing is that PayPal had already flagged the payment before it even cleared into my account. Despite knowing there was something wrong, they STILL LET IT GO THROUGH, and let me take the hit for transaction fees for money I never even received.

To PayPal, I ask, what service was I provided that was worth $8.97? Basically anybody could **bleep** over another PayPal user financially by sending them money from stolen accounts, only to have those payments reversed. For example, if I send you $1,000 from a stolen account, PayPal will allow the fraudulent payment to go through (knowing it is fraudulent), and then reverse the transaction. You'd be down $29.30.

[profdata]

Paypal didn't keep their fee.  They returned the $290.03 and their fee of $8.97. 

[positivebalance]

Unfortunately that is not true profdata.

I had $0 in my account at the time I received the fradulent payment.

I received a total of around $290.03 minus PayPal fees of $8.97 out of the total $299.00.

PayPal reversed the full $299.00 to the sender. They did not reverse their own fees because at the end of the entire transaction, my account balance was in the red and showed -$8.97.

If PayPal did reverse their fees, why would my account balance be negative and why would they need to reverse a funds transfer to my bank? This is only possible if they failed to revserse their fee.

Here is the transaction in all its glory. If anyone has your PayPal email, they can burn you. All they would need to do is gain access to a hacked account and send you money. PayPal will let the payment go through and then reverse it, leaving you to cover the fees.

Oct 14, 2011	Payment Review	Placed	Details	-$290.03 USD	...	-$290.03 USD
Oct 14, 2011	Pending Balance	Released PayPal released the hold. The money is now in your PayPal account.	Details	$290.03 USD	...	$290.03 USD
Oct 14, 2011	Reversal	Completed	Details	-$299.00 USD	$0.00 USD	-$299.00 USD
Total:	$0.00 USD	-$8.97 USD	-$8.97 USD

Unless someone has a better explanation.

[positivebalance]

Also, I have given a refund before. When this happens, PayPal will show the amount you received deducted, not the original amount sent. There will also be a "Fee Reversal From" transaction in the history.

In the instance I mentioned, PayPal deducted the full amount sent of $299.00 and a $8.97 fee.

[PayPal_Olivia · Accepted solution]

Hi positivebalance,

When a payment is held for fraud review, the entire fee is credited back if and when the payment is fully reversed.

When you give a refund on a payment, it's a different story. The fee is given back to you in a pro-rated amount for a partial refund, and in its entirety for a full refund, minus the $.30 fixed portion.

The best way to see this is to view your history through the filter of "All activity (with balance)". This will show the impact of every step of the transaction on your balance.

If you experienced something different than the above, please give Customer Solutions a call. A representative will comb through your history with you, line by line, and find the place where the fees were credited back. If something went wrong, they'll find that and rectify it.