Thank you for posting this and its funny, I just signed up for the community just to post the same information. I am currently checking into the legality of holding onto money as paypal is. Normally, this would not be an issue because it would fall under escrow type situation. However, Paypal has certain aspects of it that make it more like a bank. As such, they are exposed to a lot of state and federal laws. Hijacking money is not something either authority looks very favorably on.
My major problem here is I have been with paypal almost since they have opened. I have had zero issues on my account and they have access to my information as well as banking details. There is NO reason for me to be subjected to this because I am about as verified as someone can get. New accounts? Accounts with issues? Fine, maybe but even then 21 days is insane. There are costs involved in doing transactions and those costs go up over time (example, interest on a credit card used to ship, pay fees, or buy units) and 21 days virtually guarantees interest charges.
Anyway, so what are the alternatives here?
1) Be heard: Oh yes Paypalers, RAISE **bleep** ON THIS. Every transaction be on the phone with these people demanding your money. Tie up their system, drive up their customer service costs, be a pain in the bum. Keep in mind, I think 21 days is reasonable for accounts that have had issues. 5 days for new accounts without issues. However for vetted accounts with a zero issue track record over time? This is simply unacceptable. BE HEARD.
2) If you have the option, set your auctions, sales, etc up with a disclaimer that all shipping will not take place until 3 to 4 weeks depending how comfortable you are with waiting for Paypal to clear your money. Put a nice note as to why this is necessary and a link to paypal's customer service emails and contact numbers for the buyers to complain to.
3) Paypal alternatives. Honestly, between the dual costs of paying ebay fees and paypal fees (which have gone up) I am getting a bit tired of paypal and their nonsense. I have stuck with them because of the credibility but its getting to a point that the alternatives are looking more and more attractive. I have opened several accounts already and am prepping to shift my model around to accommodate them if for no other reason then to protest this pending move by paypal. I hope Paypal comes up with something more reasonable but I suspect they are suffering from "too big for their britches" syndrome. Kind of like Netflix. Hope they can see how well that turned out for netflix and make some actually intelligent decisions rather then greed.
Oh and dont mistake it, maybe this is in part protection of buyers but if you think this is any less about the MASSIVE amount of money they will generate on interest paid to them for moneys held in their bank accounts for this period, you are sadly mistaken. Think about it. How much money total is Paypal holding onto for this pending? Millions? Tens of millions? Hundreds of millions? Figure out the interest for a day on 1 million dollars and you tell me a company wont develop a bogus "protection" policy to open that revenue stream.
