PayPal pending payment

socrcoach17
New Community Member

I would like to hear from someone at PayPal the answers to several specific questions relating to the pending payment policy. I have read the various threads on this, and the relevant section of the Terms of Service Agreement, but these are questions not answered elsewhere.

 

FIrst, the background. Like so many others here, I was caught by surprise when payment was held up for an item I sold on eBay. The item sold for $455 and because it is heavy and bulky, the shipping charge was $225 (in the actual fact, it cost me more than that amount to pack and ship and I ate the difference). The winning bidder paid immediately via PayPal. PayPal immediately marked this as a "pending" payment. The item was shipped less than 48 hours after the auction closed and delivered yesterday. I supplied the tracking information to PayPal/eBay as instructed. The payment still shows simply as "pending" and when I click on "Details" I am told that status applies for another 14 days, OR 3 days after PayPal can determine that the item was delivered, OR 3 days after the buyer leaves positive feedback.

 

There is no way for me to verify that PayPal/eBay knows now that the item was, in fact, delivered yesterday. There is no way to know when and if a change in pending status has occurred. The policy is ambiguous as to whether delivery even matters for an eBay auction item, or if only positive buyer feedback will release the funds in less than 21 days.

 

QUESTION 1: If the item was sold pursuant to an eBay auction, is the pending status changed when the SOONER OF or LATER OF the two listed events occur: provable delivery or positive buyer feedback? How can I verify that PayPal now knows the item was delivered and, therefore, that the 3-day clock has started to count down?

 

PayPal positions itself as the most convenient way for a seller to accept payments, especially on eBay transactions. I was charged a $20+ fee for this transaction. I had to front the $225 shipping charge. I now have to wait an arbitrary amount of time for payment, with no feedback from PayPal as to status before or after the buyer submitted his PayPal payment transaction. In the very best case, the funds will hit my bank account two weeks from when the auction closed because of the holiday weekend.

 

QUESTION 2: Why is this good for me as a seller? You are charging me premium transaction fees, what service am I AS A SELLER getting in return for this policy and the fees charged?

 

The most basic tenet of contract law is that the parties have to agree to the terms in order for there to be a contract. PayPal's Terms of Service Agreement relating to pending payments is hopelessly vague, to the degree that I question that it constitutes a contract. It would not be a valid contract for me to say, for example, "I can do whatever I want for any reason" and for you to agree, and for me to then take your car and your house. I could argue that your agreement was stupidity on your part (which is, essentially, PayPal's response to sellers in the various threads and is vaguely insulting), but I could not defend such capricious actions in court based on that "contract." Particularly in a dependent situation like this

 

The PayPal pending payment policy does not, for example, let me know, as a seller, whether I or any given transaction are subject to being pended, what I can do to prevent it, or what specific criteria PayPal will use. PayPal relies on terms like "high risk" that clearly mean something very different to the sellers who have spoken out in this forum than they mean to PayPal. In no way would I, as a reasonable seller, read the text of the TOSA and interpret it as meaning what PayPal is, in fact, doing. You are doing things that are not reasonable interpretations that a reasonable seller would be expected to conclude are consistent with the TOSA's language. They appear to be arbitrary and capricious and unrelated to the stated policy.

 

In short, a seller "agreeing" to the TOSA can have no basis for understanding what it now turns out PayPal means by those words.

 

QUESTION 3: How does the TOSA, regarding pending payment holds, constitute a valid contract, given that you provide no way for the seller to know what he/she is agreeing to and that reasonable sellers clearly think you are interpreting this language in ways opposite to the way they understand it?

 

Given that PayPal relies on its "sole discretion," there is an implied obligation for the policy and its enforcement to rationally relate to its purpose.

 

As with so many others, there is no evidence in my case of any kind of a problem. This was a personal sale, but I own a company that accepts credit cards based in large part on my own credit history, and have had no problem with approvals for those transactions from banks, or any problems with any specific transactions. There is no history of complaints against me personally or my company, I have no criminal history, no financial fraud, solid credit rating, bank account has been verified. In other words, PayPal has reached a decision about my "risk" that is opposite what other financial institutions that provide similar services have concluded.

 

QUESTION 4: How does the pending payment discretion policy of PayPal rationally relate to actual risks to buyers, its putative purpose? What does the term "high likelihood" mean anyway - 50%? 10%? 1%? What statistical evidence does PayPal have that the criteria used are predictive of a "high likelihood" (whatever that means) of buyer dissatisfaction? Is there any such evidence at all that eBay frequency is a reliable predictor, or is this just someone's guess?

 

Clearly, this policy benefits PayPal financially. You get the benefit of interest on the funds while they are in pending status. It is like travellers checks - the financial institution makes money on the float. Therefore, PayPal has set itself up with a clear conflict of interest, between fairly interpreting ambiguous or discretionary sections of the TOSA, e.g., what constitutes "risk" to buyers, and what is financially beneficial for PayPal.

 

QUESTION 5: Will PayPal remove this conflict by paying interest on the funds held? If not, how can you claim to not have an egregious conflict of interest in your unilateral interpretation of the TOSA?

 

Login to Me Too
489 REPLIES 489

tech5896
Contributor
Contributor

I have been plagued by this rule as well, I think that all the interest paypal is making is subject to a class action lawsuit. Doesn't seem right that buyer's have no clue of this rule, as their money is immediately withdrawn from there bank account, but yet I have to wait forever to get my money. I have provided tracking numbers,kept in constant touch with buyer and he has left feedback and now it can still take up too 4 more business day's.

 

I will never ever use paypal again as a seller and I hope one day they do get sued for the millions in interest they are making off of regular people trying to make a buck or 2 doing this ebay thang. Good luck people getting your money in a timely fashion. 3 freaking week's to get a measley 100 buck's, that's high risk,come on.that's b.s.

Login to Me Too

temp02212012x
New Community Member

Pay pal stinks they are not geared to the seller Boycott Paypal!!!!!!!!!!!

Login to Me Too

chodaboy
Contributor
Contributor

Question on this policy.  I see that you have to front the shipping payment..  And that's what paypal did, they took the money for my shipping out of my bank acct, but it seems that paypal took the money out of my pending funds as well.  Is that supposed to happen?  Do I get re-imbursed on my bank account?  How has that worked for people?  Has that happened to everyone?  why would they take from the pending AND my account?

Login to Me Too

systemlord
Contributor
Contributor
 
 
I was told by one of my friends that even though he had over $1000 dollars in his PayPal balance he was still charged from his bank account, so while I was about to sell an item I left .25 cents in my bank account to see if PayPay would dare try and PayPal did withdraw the .25 cents all while I had several hundred dollars in my PayPal account! If PayPal thinks this kind of thing will continue they are mistaken!! The Federal Government and/or the FCC needs to step in and regulate these pirates!! 
Login to Me Too

TeaPartyPam
Member
Member

I totally agree with this fellow.  When I sold an auto on Ebay I was told under no circumstances to accept PayPal for payment, that they hold onto your money for a ridiculous amount of time and if the buyer has any complaint (in the case of an auto that can easily happen, especially if the buyer is a whiner or scammed) PayPal will continue to keep your money.

 

In my present situation, I simply sold a small product for a couple of hundred dollars and did accept PayPal.  True to form as I had been warned, they are keeping the money for over 20 days waiting for a "complaint" when I specifically stated that there are no returns. 

 

PayPal scores on both ends of the seller.....They keep the money and earn interest which is not passed on to the seller, and they charge the seller a "Fee" to earn the interest!!!  Crazy!!!!!!!!

 

I have confirmed my bank account and entered the shipping confirmation information but they still are keeping the money with no complaint filed and it has been days since I did those things.

 

Never again will I get involved with PayPal as a seller.

Login to Me Too

Leprechaun25
Contributor
Contributor

The Original Poster had an excellent post. I agree with just about everything he said. And I'm also glad to see that a class action is in the works. As an attorney myself, I have no idea how this holding of funds could be construed as a legal practice. In essence, Paypal has turned itself into an escrow service. Last I checked, no one agreed to escrow funds in their auctions. Paypal is supposed to process payments, and for the trouble of doing so and dealing with complaints, they take a cut. Now they want to take a cut without taking any of the risk anymore.

 

The best part, as the OP stated, is that they set themselves up into conflicting positions of gaining interest on funds being held, while being the sole determiners of whether funds are held or not. Very very shady stuff. The best thing they can do for themselves is to cancel this policy immediately in order to lessen the amount of damages they will inevitably be forced to pay for this shameful business they're doing right now.

Login to Me Too

LSPP
Contributor
Contributor

 


@Leprechaun25 wrote:

The Original Poster had an excellent post. I agree with just about everything he said. And I'm also glad to see that a class action is in the works. As an attorney myself, I have no idea how this holding of funds could be construed as a legal practice. In essence, Paypal has turned itself into an escrow service. Last I checked, no one agreed to escrow funds in their auctions. Paypal is supposed to process payments, and for the trouble of doing so and dealing with complaints, they take a cut. Now they want to take a cut without taking any of the risk anymore.

 

The best part, as the OP stated, is that they set themselves up into conflicting positions of gaining interest on funds being held, while being the sole determiners of whether funds are held or not. Very very shady stuff. The best thing they can do for themselves is to cancel this policy immediately in order to lessen the amount of damages they will inevitably be forced to pay for this shameful business they're doing right now.


Thank you so very much for your insightful and truthful post! There are a few posters on here, who think that since a user "agreed" to PayPal's "user agreement" that they've waived their rights under the law. PayPal must abide by the laws just as any other business or person, regardless of what protection they "THINK" they have with a so called "agreement". PayPal has reaped MILLIONS of dollars in interest from funds they've illegally held. If for any speck of possibility that PayPal claims they did the holds/freezes in "good faith" or some BS like that, then I can wait to hear WHY they HAVEN'T offered or given the interest earned BACK to the rightful owners to whom they withheld it from.

 

Login to Me Too

Leprechaun25
Contributor
Contributor

^Yep. I've seen this many times with people who think that just because they sign something or agree to something, that it must be legal. Not very PC to say, but they're almost like the Uncle Tom's of society. Rather than fight against an obviously unjust agreement, they'd rather just keep picking that cotton and saying "yessuh." Don't want to cause any trouble for the massah. Maybe society has conditioned people to think that they can sign away any and all rights, I don't know.

 

The only problem I see in that complaint filed on 5/12 is that it doesn't address the 21 day holding, but rather focuses on the 180 day frozen funds issue. They're no doubt related issues, and the class includes anyone whose funds were held up to 180 days, but it would be nice if the complaint addressed the 21 day crowd.

Login to Me Too

lorie7318
Member
Member

i"m also very mad about this new policy, how dare them hold our money, when we have done nothing wrong. paypal takes there money right away, but you can wait for yours, what does that say about a company???

Login to Me Too

timkurk
Contributor
Contributor

Right ON!!!!!!!!!!!!!!!!!  I sold items on ebay because i needed the money now im out the items and my money for a month, really a month the buyer should know in 3 dys at the most if they want the product! I am extremely disappointed with paypal i will take the risk of using craigs lit from here on out because this is absolutely ridiculous. there is nothing convienant about paypal when it comes to the seller! they have my account number if there was a dispute but its been weeks and ive even gotten feedback from the buyers on ebay I hate you paypal!!!! GIVE ME MY MONEY!!!!!!!!!!!

Login to Me Too

Haven't Found your Answer?

It happens. Hit the "Login to Ask the community" button to create a question for the PayPal community.