Is PayPal's withheld payments policy fair to sellers?

[alexvallorosi]

This is feedback for PayPal based on my latest eBay transaction using PayPal as my payment method.

I sold an item online using an eBay auction. The bidding and selling went very smoothly, with the user paying for the item within a few hours, followed by myself shipping the item within a few hours of that. There was good and clear communication between both parties. My complaint is with the PayPal payment hold that follows after the transaction is complete. It could take up to 21 days to receive your payment after your transaction is completed on eBay. And it could be as soon as 3 days after the product is marked as received by the buyer! This practice is completely unfair to the seller. Once the product is forfeited by the seller, they no longer have the item or the money and are therefore out of pocket until PayPal decides that they want to pay the seller back. I believe that this practice heavily takes advantage of the seller considering that the seller is PayPal's customer, and is already paying a fee for using the service. This is evident by my latest customer support phone call:

After the tracking information marked the package as having been delivered, I contacted the buyer and made sure he had the item. He did and he was very happy. So I called PayPal to ask if they could release the funds on my account. The support agent was able to do so, however, she mentioned that this would be a "one time courtesy". I'm sorry PayPal, but I don't think you understand how service and courtesy works. I have completed a transaction in the best possible manner, quickly, and with a very satisfied buyer. It is not a courtesy to release the money that is properly mine. If this witholding money issue is not fixed, then my usage of PayPal will have been a one time courtesy! Honestly I have liked using PayPal in the past but there are other options out there that treat me better than this as a customer...

So I open this to the community. Do you think this is fair for sellers?

[kernowlass]

The withhold policy is for NEW sellers.

EVERY SINGLE seller on ebay has been through the process myself included.

As it is for buyer protection most of us understood, as without buyers we would not sell anything.

It also filters out poor sellers and that again is good for the rest of us.

It is also clearly stated in both ebay and paypals user agreements that YOU agreed to when you opened both accounts.

You do not have to sell on ebay or accept paypal if you don't want to, just close your accounts.

However the rest of us are happy to promote safety on both sites.

The hold does not last long and you rarely have to wait 21 days.

[alexvallorosi]

I sold on eBay and PayPal before they had this policy and never had any problems. Do you happen to know after how many sales this restriction is lifted from your account? I think that's something important to consider here as well.

You say "most of us understood" but I don't remember it being put to a vote, it was simply a policy that they instated without PayPal asking us.

Also I think this statement that you made is not valuable -- "However the rest of us are happy to promote safety on both sites." -- because you attempt to represent all sellers, however, you're just a single person. Look, I'm trying to promote a discussion here, not get into an emotional argument.

I appreciate your feedback. I understand it protects buyers, but at the same time, I believe PayPal should be better serving the interest of the seller. I would like to hear what others have to say as well.

[kernowlass]

I sold on eBay and PayPal before they had this policy and never had any problems

You didn't no, but their are poor and scamming sellers and paypal do not know who they are so that is why they are cautious with new sellers.

You say "most of us understood" but I don't remember it being put to a vote, it was simply a policy that they instated without PayPal asking us.

Well put it like this, the policy has been going for years and we only get a few threads on here complaining about it and some understand when it is explained to them. Also on the ebay boards most sellers are in favour as it filters out the poor sellers and improves ebays reputation.

Sorry i seem to be speaking for most sellers and don't mind a discussion at all. I know its a pain waiting for funds BUT i do see paypal and ebays reasons for doing so.

For example if a seller has no funds in their paypal balance and refuse to refund a buyer for an item lost in the post then paypal refund the buyer under buyer protection and then have to try and get the seller to repay them. So to stop that happening they limit a new sellers use ie the hold until they prove themselves.

You can read other threads on the same subject and a lot feel the same way you do. But if you think of the millions of sellers worldwide that go through this policy ON and OFF ebay the amount not liking it is pretty minimal. 

Do you happen to know after how many sales this restriction is lifted from your account?

From ebay help pages >>>

In some cases, the payment from your buyer might be not be available right away. Here are some of the reasons why this might happen:

• You have a limited selling history
• You have a Below Standard rating in your Seller Dashboard.
• You have started selling in a new category
• If your account shows unusual activity, such as a sudden increase of eBay Buyer Protection cases.

You can see the status of your funds in My eBay, and find out what you can do to get your funds more quickly, by clicking the button at the bottom of this message. Find out more about payments that aren't available yet.

If the estimated funds availability in My eBay is "unavailable" that means the transaction is involved in an eBay Buyer Protection case. Click on unavailable to find out more.

Your funds may become available more quickly if you provide us with tracking information:

• If you list on eBay.ca and your item is located in Canada and you have a below global performance rating and your item is shipped within Canada, your funds will be available 7 days after the latest estimated delivery date. If your item is shipped internationally and no estimated delivery date can be calculated then funds will be available 21 days after the buyer pays.
• If you list your item located in Canada on eBay.com and you have a below standard US performance rating, once you've marked your items as shipped, funds will be available 7 days after the latest estimated delivery date. If no estimated delivery date can be calculated, funds will be available 21 days after the buyer pays.
• If you list on eBay.com and drop ship from inside the US, funds will be available 3 days after delivery confirmation when you upload tracking information, or 7 days after your latest estimated delivery date if you don't upload tracking but mark the item as shipped. Otherwise, funds will be available 21 calendar days after the buyer pays.

Note: In some cases, such as international shipments, we can't calculate a delivery date or confirm delivery. It may also take longer to get your funds if your buyer reports a problem.