Paypal wanted proof of goods when it was a donation

[Seamagician]

I recently received a substantial donation from Ko-fi. Most people dont' earn that much in five or six months Paypal put a hold on the payment and they wanted proof of invoice or of goods sold or goods received before they paid it. They also give me the option to returnt the money to the person who donated it. So I immediately told my donor, and he upped the payment (enough to live on for a year - for me) and paid me through STRIPE. Stripe did not ask me for proof of goods sold.

it's very simple. The payment comes through Ko-fi which is a site for donations.  It would be the same for patreon or gofundme, etc. 

It was obvious it was a donation.

As far as I can tell, I do not have a business account, and I do not want a business account, but I cannot figure out why Paypal thinks I have sold goods. Clearly I won't be routing furture payments through paypal, and in fact, after I've closed an account on one site (I'm a writer), all future money will either be paid directly into my bank account or through Stripe. 

In addition, paypal gave me no option to contact their apartment other than through a phone call (I loathe speaking to people on the phone) so I chose not to do so. Also, I have a prepaid phone (I make about two calls a month, and nobody knows my phone number except bank accounts and government organisations) so there is no money on it. So I don't like to call people.

Also, I was shocked at the fee that Paypal sent me. It would have been cheaper for my donor to route it through my bank. And I will take that option in future.  It would also have been faster with no questions asked.

Question:

1. What does one do when a large donation is received and paypal wants an invoice?

2. How do I check if I have a business account or not?

3. Are fees cheaper / more expensive depending on business, donations, etc?

[sharpiemarker · Accepted solution]

@Seamagician 

According to Ko-fi, PayPal and Stripe will take their standard fees so Ko-fi is not distributing funds using “PayPal Payouts” integration where the platform pays the PayPal fee so that recipient don’t need to, like survey sites do. Instead, Ko-fi uses just a straight forward “PayPal Checkout” integration. Donations are considered commercial transactions.

What you have happening is an account limitation and PayPal wants clarification about your transaction. if you do not have the info requested, write a note explaining why, pdf it and upload to each request. For example, the transaction was a donation through Ko-fi and shipping was not needed.

These limitations and holds can occur with both personal or business accounts accepting goods and services payments if there is a sudden spike in qty of payments or in payment amounts.

The standard commercial fee rate is the same for either account type too.

If you are a registered charitable organization, you may be get donation rate if approved: 

https://www.paypal.com/pt/webapps/mpp/merchant-fees#statement-4

Personal and business accounts have different users interfaces on the website. You can add business name and business information on the account settings of a business account. You seem to be posting in the forums with a personal account so if that is the only account you have then you don’t not have a business account

If you ever receive a payment where shipping is not required and the money is ever on the 21 day funds availability hold, update the order status as indicated here:

You can help to release the eligible payments by following one of the below steps:

• Add Tracking. Use one of our approved shipping carriers and we’ll release the hold 24 hours after the courier confirmed delivery to the buyer’s address.
• Update the order status if the held payment is for a service or intangible item (e.g. piano lessons, e-book), or don’t require shipping. You'll get your money 7 days after confirming the order status as Completed.
• Print USPS or UPS shipping labels with us. We’ll track the item and release the hold 24 hours after the courier confirmed delivery to the buyer’s address.

In rare cases, the payment may not be released after this time. For example, this may happen if your business model has changed or we see a significant difference in your selling price. In this case, we’ll release your payment 21 days after you received it. 

Here’s how to add tracking information or change the order status: 

1. Go to your Activity. 
2. Find the transaction you would like to update, then click Get your money. 
3. If you sold a product, select Product to add tracking information or print shipping label directly. 
4. If you sold an intangible item or service, select Service or virtual product to confirm order status. 
5. Click Submit. 

After 48 hrs of doing this, you may ask recipient to confirm receipt on their end of the transaction details.