Paypal's reserve is thievery

[glensideshirts]

I just got off the phone with paypal after noticing my 'reserve' funds have been at $430 for a while.  After browsing help, I really didn't find out how or why my money was being held.  Speaking with customer service really didn't help clear up the 'why' but I did find out that they are holding 10% of my receipts (including shipping charges) for 60 days.  The only reason given was that this is a protection against a buyer opening a claim requesting a refund.  Customer service told me accounts are reviewed every 30 days.  I have been an ebay bronze level powerseller for at least five years and have NEVER had a buyer open a case against me.  Never!  I have issued a handful of refunds over the five years to buyers who have changed their minds.  Never more than $20.  Every now and then, I will issue a partial refund of a few dollars for buyers who selected the wrong shipping method, thus paying too much.  I have NEVER been in a negative balance; always using my paypal balance to issue those small refunds.  There is absolutely no justifiable reason for paypal to be holding 10% of my money for 60 days.

Better yet, when I asked for my account to be reviewed because there seemed to be no justifiable reason for the reserve, I was told it's done by the computer and a person can't do it.  

What do I do?  I am basically caught up within the paypal/ebay monopoly.  Why doesn't ebay accept google checkout?  I guess I just have to live without my $430 for 60 days while paypal makes money on my money.    I guess it is the cost of doing business with the monopoly.  Infuriating since I really need that $400 of MY money!

[Martel]

I was just hit with a $50,000.00 reserve.

Reading the last few pages doesn't make me feel very good.

[chefcwood]

I processed my first payment today for $301.75 using pay pal. They already charge me $30 per month to process credit card payments, in addition they charged me $9.00 for fees and a reserve fee of 30% of the $301. 75 which was a grand total of about $90.00. This is absolutely ridiculous!!! What small business can afford fees like this? After speaking with a customer service rep, he informed me that they will be holding my $90.00 for 90 days. I cancelled the service and now I'm looking for another company to process credit card payments with. BEWARE!!!

[phx_zs]

Just want to bump this thread again.  I finally got fed up with the rolling reserve and emailed customer support -- naive me thinking that would help.  Now that I'm looking on here and reading all of these horror stories I'm so disgusted.  Our complaints aren't in vain though, the PayPal moderators are obviously on here reading peoples' posts and censoring some...We just need to make enough of a stink about this for them to change it.

I'm no lawyer but I agree with others that the class action law suit isn't much of an option.  Someone would have to put the time and resources into it and it would most likely fail since we all agreed to PP's bull**bleep** fine print when we signed up.

What we CAN do is spread the word and do everything we can for PayPal to come out of this being as red-faced as those sick **bleep** should be.

So until PayPal agrees to stop this unethical practice we should all:

-Email news services, blogs, etc. about what's going on -- It only takes one medium- to large-sized embarrasing exposure for a huge company like PayPal to kick on the PR machine and do some backpedaling.  Especially consider doing this if you're one of the people with the true horror stories, like the bike race charity or another person's I read that said he was losing his home and business because PP refuses to release his money.

-Keep flooding the community boards and customer support with complaints

-Discourage anyone and everyone from using PayPal

-Switch to another payment processor if possible

[violetandco]

I had trouble with this policy too.  Paypal is holding 30% of my total payment (including shipping) for 90 days.  That is my profit margin and more-so I was going into the hole with my Website Pro account.  I really was disappointed when I had to cancel that account because I loved it.  But--it was either that or shut my business, in which case I wouldn't need a Website Pro account anyway.  They still have my money and even though the account is cancelled, won't let it go, although I have asked for it.  I am quite disappointed in Paypal and as soon as I can open a Merchant Bank account with my shopping cart provider, I am going to do so and then get out of Paypal altogether.  Not the way to go PayPal.

[jtrag]

What did you guys think was going to happen when eBay took over?  Seriously.  Think about it  😉