cancel
Showing results for 
Search instead for 
Did you mean: 

Paypal's reserve is thievery

Highlighted
Member

Re: Paypal's reserve is thievery

This is absolutely rediculous!  They are reserving 30% of my transactions for 90 days!!! Revolving!!!! That is MY MONEY!!! There was no warning, just all the sudden my paypal credit card started getting declined when I knew there were funds in there.  It says this can change, who do you contact?  What do you say?  This is freaking highway robbery!!!!  I will use another service to accept credit cards... definately not worth the convenience of 'virtual terminal'!

Highlighted
Member

Re: Paypal's reserve is thievery

This says paypal may change the reserves on ones account... anyone know how to make this happen?

 

10.7 Reserves. If you receive Purchase Payments, PayPal, in its sole discretion, may place a Reserve on funds held in your Premier or Business Account when PayPal believes there may be a high level of risk associated with your Account. If PayPal places a Reserve on funds in your Account, they will be shown as “pending” in your PayPal Balance. If your Account is subject to a Reserve, PayPal will provide you with notice specifying the terms of the Reserve. The terms may require that a certain percentage of the amounts received into your Account are held for a certain period of time, or that a certain amount of money is held in reserve, or anything else that PayPal determines is necessary to protect against the risk associated with your Account. PayPal may change the terms of the Reserve at any time by providing you with notice of the new terms.

Highlighted
Contributor

Re: Paypal's reserve is thievery

I just upgraded to Website Payments Pro, hoping that being able to accept CC's on our actual website would help business. Been one full day of having website payments pro and I'm already looking into a new merchant account.... probably Quickbooks or my Banks merchant services. I am getting hit by 30% reserve fees also, and don't find their reasons justafiable for holding our money. The only reason I liked Paypal in the first place is because they are a gateway and merchant all in one, PLUS they have a shipping label service that saves a lot of time as opposed to going to usps.com itself. Anybody know what we can do about this rolling reserve problem before I cancel and just switch over? I figure the sooner I cancel the better, so less of my money is in reserve.

Highlighted
Contributor

Re: Paypal's reserve is thievery

do yourself a favor and switch over to someone else now before they clean your account out by holding more reserve than you make in profit and wind up upside down like the rest of us.

Highlighted
Contributor

Re: Paypal's reserve is thievery

Haha we are one step ahead of ya =]. We just cancelled payments pro about an hour ago. Had Paypal payments pro for a total of 2 business days, they have about $200 in reserve. Yeah I figured I mightaswell cancel now before they take even more. I spoke to a representative myself and figured there was nothing that can be done as well. I was told that in the future, when Paypal decides that a Rolling Reserve was not required, they would remove it from our account, but I can tell from the way he said it, that the chances of that happening was slim.

 

Thanks for the help everybody, you guys helped me realize that Paypal is really that frustrating. I was blinded by the convenience of their tools and the shipping label service. The shipping label service and gateway really makes it an all-in-one. However the high rolling reserve makes it unbearable. So future advice for people, be aware of that. %30/90 day is ridiculous. I honestly would've been okay with a 10%/30 day, even. Good luck to everybody, I will try out authorize.net to see if I can get a better plan.

Contributor

Re: Paypal's reserve is thievery

We used PayPal for registration for a fundraising bike ride.  Without notice they took $18,000 and put it into a minimum reserve, then held 25% of our sales for 180 days in a rolling reserve.  I called PP to see what this was all about and what we would need to do to decrease the percentage that they were taking or at least reduce the time that the rolling reserve was held.  I was told that due to the nature of our business (an event) that they usually hold 100% until after the event.  Not sure how this is possible since everyone requires payment prior to the event!  After getting off the phone and getting absolutely nowhere, I logged onto my account and noticed that they had moved an additional $42,000 from the rolling reserve to the minimum reserve without any mention that they were going to do so!  Now that the event is over and there is no reason for anyone to be asking for there money back, they still aren't releasing the money.  In total, they are holding over $75,000 of our money and to add insult to injury, they are paying a pathetic rate of interest on it.  The sad part about this whole thing is that this was a fundraising ride, so this is a huge percentage of our profits that are slated for our beneficiaries and grant program.  This is completely unacceptable.  The only solution is to cancel our account and guess what, it will be 180 days before we get our entire reserve back.  Does anyone have a class action contact?

Highlighted
New Community Member

Re: Paypal's reserve is thievery

I am in the same boat with this reserve BS. They are holding 30% of my money for 90 days which for me being a small and upcoming buisness is money I could be using for growth. In 2 months they have taken over 1,000 dollars from me that I can't touch until well into next year!!!!!! Does anyone know if I can file legal action?

Highlighted
Contributor

Re: Paypal's reserve is thievery

Well my advice to you is to go do some research or at least read the previous posts. There is no simple way to get Paypal to change their reserve policy. If you are going for legal action, be prepared to go through such a hassle, that may or not make your business worse, due to all the money, time, and dedication that will be required.  Just ask yourself if it is worth it to go through all the troubles of legal action toward Paypal. If it was that easy, then it would have been done because this rolling reserve policy is not anything new.

 

Take the advice of many, and just leave paypal as soon as possible. The longer you wait, the more money they will hold from you. I personally left Paypal after 2 days of signing up with Payments Pro. I instead just offer regular Paypal Payments Standard on the website for people who feel more comfortable with Paypal. As for Credit Card payments, just go with an actual Mercant Providor such as Authorize.net, Quickbooks, or the many others that are offered out there.

 

 

Highlighted
Contributor

Re: Paypal's reserve is thievery

UPDATE:  We moved our fundraising bike ride registration to a merchant account through Authorize.net.  I went to close our PP account and was told that I could not close it because there was a balance aka reserve!  I was referred back to the Merchant Risk Analyst who originally placed all the holds on the account.  At this point in time they had started to release the rolling reserve that was held for 180 days.  The funds in the original rolling reserve that had been moved over to the minimum reserve were essentially held for almost a year.  Our event had been over for 3 months prior and we didn't have a single chargeback against our account the entire time.  The Risk Analyst said that she would review our account and possibly release some funds.  She would get back to me within a couple of days.  She never did 'get back' to me, but to my surprise ALL of the minimum reserve was released within about a week.  It was a very good thing because the next step would have been a nice letter from our lawyer.  It's very unfortunate that PP treats it's customers like this.  Our event, now in it's third year, has grown tremedously and PP is out thousands and thousands of dollars.  Our new mechant account has not held a single penny. 

Highlighted
Contributor

Re: Paypal's reserve is thievery

Thanks for that update!

 

Sounds like you got lucky and your case was high-profile enough for them to release all your funds at once.  From the research I've done on switching merchant accounts away from PayPal it sounds like (for the rest of us) you have to change over your site's code and then let the rolling reserve ride out and slowly be released over time while not feeding any more money into it.

 

I've already dissuaded a few of my employers and clients from choosing PayPal as a processor and I recommend Authorize.net to everyone.  It has the $99 setup fee but ends up being cheaper in terms of transaction fees and monthly cost -- and no rolling reserve!  Plus their API is much easier to work with and more well-documented in my opinion.

 

I've registered a domain and started work on an anti-PayPal site where people can post their horror stories and learn about alternatives.  I still firmly believe that if we shame them enough about this and take away enough business from them that they'll change it.

If any other web devs out there are interested in helping with that site send me a message.