Payment Reserves

[PayPal_barry]

Paypal are just thieves, they've been holding 20% of MY money for 3 months and I've only recently got it back. Stopped selling on ebay now because of all the BS, so hence no more Paypal BS as well!"

[PayPal_barry]

HI there, that sounds like payment reserves have been held on your account (20% of income held for 3 months). We appreciate that this seems excessive and harsh. But allow me to give you PayPal’s side to this. PayPal need to make sure that we can protect all our customers, buyers and sellers. The reasoning behind payment reserves is that it acts as an insurance against the potential risk of an account or seller failing and having no funds available should there be claims or reversals on the account. Every seller, on or off of eBay, needs to have such a system in place.

You should also be aware that if you continue to sell over the 30 days, with positive feedbacks given and no claims against your account. It may be possible to have those reserves reviewed and maybe altered.

[Trakwerks]

What a load of rubbish!!! Sellers that use eBay and paypal (not optional!?) are becoming more and more open to losing out in everyway! Alternatives to paypal and eBay please......

[mike_nccl]

Hi PayPal Barry

I am a new customer, not yet having made PP active on my ecommerce sites yet.  I have paused before doing so, because of the incredible amount of "bad press" you seem to get from sellers
(your customers).  

I am replying in this Forum thread because it seems to be about precisely the area I've read so much of - PP hanging on to people's money unreasonably (in their view).     I note that your own comments (those to which I have replied),   seem to be saying that for the first six months' business,  you might justify holding on to as much as 20% of a seller's turnover.   

Now nowhere in the commercial world would anyone propose such a thing:  client bad debt insurance (which is what it is) should cost a small fraction of 1% of turnover,  not 20%.  

Can you please (a) justify,  why PayPal should withold so much ?   and, while I'm on and since I'm very concerned for my own business,   (b) are you saying that if I put £100,000 of turnover through a new business in e-Commerce
sales and you handle the card processing for me,  that you'll be withholding £20,000 of my turnover ?

If so, you'll not be getting my business I'm afraid.     So for the sake of all of us please explain.  

Many thanks

Mike H
London

[PayPal_barry]

Hi Mike, your concerns are valid and we are more than aware that many, many sellers are unhappy with the holds. However, every business knows that underwriting and risk assessment is a vital part of working out your business plan. In this sense, PayPal and eBay are no different. We are on-line; we do not meet people face to face. We must ensure that not only ourselves, but also all our customers, are covered and protected against the possibility of fraud or payment reversal.

So yes, we have introduced payment holds, and if a new business comes onboard. We are more than glad to accept them and encourage their business. But holds will be a reality, for the first few months at least. I would finish by saying that though the holds are in place. We have also expanded our Buyer and Seller Protection policies. This is coverage that protects you the seller, and your buyers. This is something that a lot of other on-line processors do not provide, and I would encourage you to review them in our User Agreement.

[Neil272760]

Utterly ridiculous!!!!

I've been running my business since 2004 with PayPal. I think I've had one chargeback. I recently applied for Virtual Terminal & now PayPal wants to keep 30% of my turnover in Reserve for 60 days as insurance against chargebacks & buyers/sellers protection!

What planet are you on? Thats more than my profit margin! I'm sorry PayPal Barry but how would you like not to be paid for 60 days? You wouldnt would you but you are asking us to do the same. You are talking massive sums of money here, in the thousands of pounds not paultry sums. My total chargebacks for 7 years amount to about £20.

Fortunately I have another provider to give my customers choice as many do not like PayPal because they are American  and I am starting to join them.

I feel grossly insulted and I am not only going to take my business elsewhere, I am going to make your Reserve policy known. I feel tricked and deceived as this was NOT exoplained to me in any of you literature when you advertise this particular service.

I am definitely leaving PayPal and will be watching for any reply you make because this is plain theft. The amounts involved do not justify the risk. I am also making a complaint to the FSA &
The Department for Business, Innovation and Skills (BIS)

[Orbital]

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@Neil272760 wrote:

Utterly ridiculous!!!!

I've been running my business since 2004 with PayPal. I think I've had one chargeback. I recently applied for Virtual Terminal & now PayPal wants to keep 30% of my turnover in Reserve for 60 days as insurance against chargebacks & buyers/sellers protection!

What planet are you on? Thats more than my profit margin! "" Snip""

""Snip""

I am definitely leaving PayPal and will be watching for any reply you make because this is plain theft. The amounts involved do not justify the risk. I am also making a complaint to the FSA &
The Department for Business, Innovation and Skills (BIS)

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Hi, Am with you, this idea that they can keep 30% of what is effective your turnover is crazy and has to breach the law somewhere (at least here in the uk , you can't just withhold peoples money) or anywhere in the western world.  Now, let me know if I understand you here.  Paypal will hold 30% of your account for insurance ? Is that correct ? If I am correct in understanding this, thats just plain stupid, if they want some insurance it would be better to require the person keep a certain amount available in thier account equal to the transanction for that given month. If you know what I mean.  Too cover any possible charge back in that time ( Or in the time that is set out by PayPal in accodance the rules for charge backs.)

You should contact those org's, as this is just wrong for them to do this..

Regards,

[KateCB]

Sadly, PayPal are NOT a bank, therefore not covered by ANY Financial services,they are simply very good at marketing, and secure code. The FSA in the UK can't touch them, the USA equivalent can't touch them as it has been cleverly done. They are making our life a misery too at the moment, after 5 years of trading and not ONE chargeback, they have suddenly  introduced a rolling reserve, with moneis held for 60 days. It is beyond a joke and annoys me as I see the thousand of pounds sitting in THEIR bank account earning THEM interest, whilst I PAY interest on my overdraft that has been caused by PayPal not paying me MY money in the first place.

What can you do? - essentially nothing. PayPal's take on this exhorbitant practice is - you can close your account at which point we hold your money for 6 months. AND... who can blame them? 140,000,000 users in the UK alone, 10% of ALL their takings per day - hold it for between 60 and 90 days - who needs to work? It must be like winning the lottery on a daily basis.

I bank online. I have an e-commerce store, and take payment online - never had a merchant account 'hold funds' just in case. Never had a merchant account place 'reserves', and never had a merchant account withold my money to the point where I can't afford to pay the wages, so PayPals' explanation of 'everyone does it'  is frankly a lie - been trading 13 years ONLINE and never had this.

Until I can afford (and if PayPal have anything to do with it, that won't be soon) to pay someone to spend all day just answering a telephone to take MOTO payments, then if I want to continue selling on Ebay., I am stuck with them. but I tell you this - as soon as I can I will be looking at alternatives, be it MOTO or moving off Ebay altogether, because I am being ripped off by people purporting to 'look after me as a seller' and ripped off again by them when they side with a 'buyer'.

Pay Pal is simply a money machine, out to make as much as they possibly can - and they are good at it, open thievery in reality - then again, Al Cappone was good at being a gangster, which is what PayPal are - but HE got his come uppance, and one day, PayPal will be hit so hard, they will never recover and we can all have a street party.

The part that has REALLY annoyed me about all this is that I withdrew money from the PayPal account to my bank, then I needed to refund someone who had 'ordered in error' good not shipped yet. Because my rolling reserve was at £xxxx.xx the refund went through despite the 'available' balance being 0 - guess what - buyer hasn't got their £29 refund.....they are withdrawing the £29 from my bank account by echeque......despite another £1000 being paid into PayPal from sales less than 2 hours later.........buyer NOT happy, Seller NOT happy - Paypal? Don't give a monkeys.

Until we find a way out,  enjoy your beans on toast tonight 😞

And PayPal - if you do read this don't bother replying with well phrased platitudes - you are morally and ethically WRONG and causing many people harm with your greed.

[mossy]

I ve been using PP for a few years but recently start up my on line and papal as a means of transaction, I am doing great till PP in October decides to rolling reserve my account at  7% of turnover for 3 month as result I am in deep SH\**, my vat is due and I need to buy more stuff and PP lying on my £6000 for security, I don't think so a few people like me you ll be earning good interest money from any bank.

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@KateCB wrote:

Sadly, PayPal are NOT a bank, therefore not covered by ANY Financial services,they are simply very good at marketing, and secure code. The FSA in the UK can't touch them, the USA equivalent can't touch them as it has been cleverly done. They are making our life a misery too at the moment, after 5 years of trading and not ONE chargeback, they have suddenly  introduced a rolling reserve, with moneis held for 60 days. It is beyond a joke and annoys me as I see the thousand of pounds sitting in THEIR bank account earning THEM interest, whilst I PAY interest on my overdraft that has been caused by PayPal not paying me MY money in the first place.

What can you do? - essentially nothing. PayPal's take on this exhorbitant practice is - you can close your account at which point we hold your money for 6 months. AND... who can blame them? 140,000,000 users in the UK alone, 10% of ALL their takings per day - hold it for between 60 and 90 days - who needs to work? It must be like winning the lottery on a daily basis.

I bank online. I have an e-commerce store, and take payment online - never had a merchant account 'hold funds' just in case. Never had a merchant account place 'reserves', and never had a merchant account withold my money to the point where I can't afford to pay the wages, so PayPals' explanation of 'everyone does it'  is frankly a lie - been trading 13 years ONLINE and never had this.

Until I can afford (and if PayPal have anything to do with it, that won't be soon) to pay someone to spend all day just answering a telephone to take MOTO payments, then if I want to continue selling on Ebay., I am stuck with them. but I tell you this - as soon as I can I will be looking at alternatives, be it MOTO or moving off Ebay altogether, because I am being ripped off by people purporting to 'look after me as a seller' and ripped off again by them when they side with a 'buyer'.

Pay Pal is simply a money machine, out to make as much as they possibly can - and they are good at it, open thievery in reality - then again, Al Cappone was good at being a gangster, which is what PayPal are - but HE got his come uppance, and one day, PayPal will be hit so hard, they will never recover and we can all have a street party.

The part that has REALLY annoyed me about all this is that I withdrew money from the PayPal account to my bank, then I needed to refund someone who had 'ordered in error' good not shipped yet. Because my rolling reserve was at £xxxx.xx the refund went through despite the 'available' balance being 0 - guess what - buyer hasn't got their £29 refund.....they are withdrawing the £29 from my bank account by echeque......despite another £1000 being paid into PayPal from sales less than 2 hours later.........buyer NOT happy, Seller NOT happy - Paypal? Don't give a monkeys.

Until we find a way out,  enjoy your beans on toast tonight 😞

And PayPal - if you do read this don't bother replying with well phrased platitudes - you are morally and ethically WRONG and causing many people harm with your greed.

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[agc1]

I have been with PayPal since 2009.Out of the blue a member of staff phones me and interrogates my financial affairs without giving his full name,providing a context for the call and making threatening comments such as "you may be money laundering'.This is despite never having had one single problem in all my transactions.Apparantly the fact that I had a short term increase in turnover is the reason for his bullying behaviour.I explained the exact reason for the increase in transaction and offer to provide solid proof but he is not interested.He then phones back yesterday to say he has decided to impose a 30% reserve over 3 months!!He admits I have an impeccable record with PayPal but continues to overide me when I speak.He did finally apologise for his manner but this was not till late in the 2nd call.I ask for and he promises that a senior staff member will call me today.This has not happened.I am appalled and shocked by not only the reserve which would cause my business serious problems in cash flow,but also by the rudeness .I have sent a number of urgent emails to PayPal but have yet to recieve a single reply.I understand that PayPal need to cautious ,but without solid cause this smacks of profiteering and puts the Classs A action being taken against them in sharp relief.