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PayPal error cost me dearly, but they refuse to help me, even though they admit they are at fault.


PayPal error cost me dearly, but they refuse to help me, even though they admit they are at fault.

On February 19, I noticed a problem with my PayPal merchant account. No moneys were collected by PayPal for our members who had signed up for recurring subscriptions on my website the previous month. I contacted PayPal to determine what had happened.  They wrote back to inform me that “profiles created on the 19th of January were not created successfully, and consequently will not bill. The customers must sign up for new subscriptions. I am sorry for the inconvenience. I have cc'ed your account management team on this message so that they are aware of the issue and can follow up with you on next steps, as appropriate.”


After several emails back and forth with an account management representative and after I complied with a request for details about the specific customers affected, I was told that PayPal could not or would not fix these profiles (even though the problem was on their end, not mine). I was further informed that I would have to contact each of these customers to ask them to re-create their PayPal profile in order for me to collect additional payments from them. There were two problems with that


  • By that time, the members’ subscriptions had already lapsed. Many of them would not bother to re-subscribe, which entails contacting them and re-selling the service.
  • Also, my customers will not believe that it was PayPal’s error, and many of them will not bother to follow through, resulting in a significant loss of revenue to me.

When I asked PayPal to consider compensating me for the loss or to provide me with the name of someone else there that I could contact, they responded with the following message: “We cannot compensate for future revenues and I do not have the ability to charge them.  You will need to contact the customers and state that there was a problem with the billing and they will need to sign up again.”


So, even though the fault was entirely with PayPal, they are taking a very unfair hard-line approach to this.


  • Their system did not process the accounts properly
  • The problem was not limited to my members, other merchants who rely on PayPal to create this type of account for their customers had the same thing happen
  • PayPal did not notify me, and presumably the other affected merchants of the problem, either before or since the affected accounts were scheduled to renew. Had I not noticed a significant shortfall in my PayPal account’s revenues on February 19 and contacted them, they wouldn’t have admitted to this problem at all.
  • It’s highly probable, although I can’t be certain of this, that PayPal knew of this problem as early as January 20, since the accounts created on that day were created correctly. Yet PayPal did nothing to notify me that there was a problem.

I am a small merchant, especially when compared to PayPal. I am considering options from a personal dispute to a larger class-action suit, none of which is something I wish to do, but I just feel like I am being used by them and am frankly angry about it.


I’m curious if there are other merchants who might read this and could give me some advice as to how to best proceed. I also hope that, by posting this, I will alert other merchants to the problem, since, apparently, PayPal is not doing what it should to notify them.