We've just had the same 21 day hold imposed.
We've used EBay once, to sell off an item of IT surplus. The transaction went smoothly, no complaints, no chargebacks.
We uploaded a tracking number. Delivery was completed just fine.
Most of our business customers use BACS/bank transfer to pay but we have PayPal for the occasional user who prefers it, so our PayPal transaction volume is low - but so what?
With PayPal we also have a history of zero complaints, zero chargebacks, 100% delivery. We're a UK registered limited company, we're VAT registered, we have a verified regsitered office and our bank account is verified on PayPal, etc.. There's really no ambiguity over our identity as an authentic business seller.
We simply cannot fathom why this action was taken; it seems to be done on the automated whim of some broken algorithm (I personally doubt this was a human decision).
We can't afford to use a payment processor that behaves in this way. Almost all our transactions are completed from order to delivery within 7 working days. The cash-flow impact of having revenue held for 21 days for these transactions on our cost-of-goods-sold accounting is unacceptable.
Revenue from previous sales helps fund our supplies for the next round of sales. We're not comfortable dispatching product and then waiting to see if we get paid 21+ days later!
Fortunately the low transaction volumes mean the impact is currently small but its as much a matter of trust and confidence, as anything else. For example, our account will be "reviewed" every 35 days. Really? Exactly how will be reviewed and by whom? By what criteria? What delta must be corrected to ensure the next "review" is favourable?
While the observations made by 7yearseller may be correct, this does not in any way excuse or justify the behaviour.
"Because we can" is never a justification for poor customer service.
