PayPal pending payment

[socrcoach17]

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?

[kristab]

this post is dead on correct.....I smell a LARGE class action suit on this one. Big, big money because this is not the first time that Paypal has been sited for unethical activity.

They are making MILLIONS of dollars in interest off of OUR money!!!

[femsol]

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@kristab wrote:

this post is dead on correct.....I smell a LARGE class action suit on this one. Big, big money because this is not the first time that Paypal has been sited for unethical activity.

They are making MILLIONS of dollars in interest off of OUR money!!!

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Class action has been filed but the Chicago law firm is still adding names. Check out letssuepaypal.com and the law firm name and phone number are listed-call them and they will instruct you to telll them about your hold and experience--supporting this class action right now is the most proactive thing we can do.  At least we will be a thorn in their side and this info has to be disclosed to shareholders in their annual reports. Check out one of the many financial charts to see how eBsy's earnings have steadily declined.

[Madarao]

I just recenly found out about this after I sold an item on ebay. I didnt know why my money was saying pending

till read into it.  It upset me, $170 dollars and I cant get that and its my money. Now my buyer on ebay wont leave any feedback at all. Ive sent them a couple messages last week and this week with no reply! Now I have to wait...what 20 days for it? I know its to protect the buyer but what about the seller?! I'm gonna have to wait those 20 days because I know I wont get feedback from this person and its been about 8 days since selling the item. I'm having second thoughts about ever selling anything on ebay now. 😕

[chrisbinap]

I have to agree with all of the complaints about "pending" payments. I sold a laptop that was delivered two days ago with a seven day return policy.  So far - no feedback, no computer, no money because payment is "pending".  I know it's only a couple of days, but someone try to pull something on me several years ago when I sold  a laptop before this new policy was in effect. Although the issue was resolved in my favor, I'm worried that something similar is about to happen when I have less control over the refund..  My nerves are shot!

[missyvandiver]

contact pay pal directly to confirm that the payment was even recieved. I have been Frauded this week waiting on the pending payment.

[broncofan48]

You are so right on. I sell things to pay bills I can not even do that and then when I try to bid on something I myself cant pay for it because my paypal account is pending even though I sold it on May 20th and its now June 4th and its been delivered and my money is still pending. I cant even send out my last thing I sold because I do not have the money to front out on the shipping

[rroma77]

Hi,

I know this is frustrating, but, for what it's worth, I had the same experience as most of you with the pending payment. It caught me off guard, as I'd never had this before. As maddening as this new feature is, I just called customer service (here's the trick, don't listen to the menu options, just hit "0" and it will put you straight through to an operator). I told them the tracking number, they verified package was delivered, and in minutes the funds were released to me, and I was able to transfer to bank account.

Yes, this is a pain, but I didn't get **bleep**ed, they money is mine, and for the little I use PP, it's not that big of a deal. I can see, however, if you do a lot of transactions, that this will be unacceptable. But, for the small user like me, it can be cleared up relatively easily.

[Photographer]

We are all falling victim to this unfair practice of our money being held but we can start taking control of this challenge. Leave feedback or follow up feedback on each buyer stating their timeframes in leaving feedback. This will help us determine whether to cancel a bid of a buyer who doesn't care about leaving feedback and this will also bring awareness to this issue for us. Buyers need to understand how important the feedback issue is to sellers. If there are chronic buyers who don't leave feedback, don't sell to them as best as you can, especially if its a high priced item. Also, state in your auction that you will leave feedback stating their timeframe in leaving feedback for sellers and if we start cancelling their bids unless they have a good record of leaving feedback, they will start complying. I took a long and hard thought about this issue and its not paypal thats making this hard, its buyers who aren't aware of this process or who just dont care. If you need an example of what to put in your auction, check my lens at ebay 180516914281. I advised them of what I said above and if we start doing this, we will have less problems getting our money. The same way we set buyer requirements with feedback numbers is the same approach with this.

[urban-street]

In regards to your comment;

"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."

I agree with you 1000% and more! I have expressed my opinion relating directly to this matter to PayPal more than once. It's not 1977, technology has come a long way and for them to have this up to 21 day hold pending status is so transparent that it's insulting. I have reminded them I am the client, not them. This is my money and I am making money for them, not the other way around. And it is true. Now factor in the millions of people that PP has control of their funds. In that 21 day window of "pending whatever" I guesstimate it goes into the tens of millions of dollars? More or less? I don't know the exact figure but I will wager it's a lot. The interest on whatever that number is for 21 days is pretty significant. I told them that they are essentially taking a loan from me that I did not approve. I received a big fat zero response to this concern. Now I know for a fact in some states if you rent an apt you obviously have to pay a deposit. Let's say 2k. And let's say you live in this apt for 10 yrs. Over that period of time your deposit was collecting interest. Some states have made it a law that the owner of the building(s) must return the deposit, minus usual/customary cleaning fees, PLUS the full amount of interest that was acrued from the deposit to the tenant. It's the tenants money until he/she destroys the unit which happens how often? So PP is gambling with unapproved loans from their clients. What if we all srtarted telling the buyers that when PP releases their payment to us in 21 days we will then ship their item. And if I could get a phone number and C-Level name from PP I would have it in hand at all times to give to the buyer to voice his/her concern over this policy that the sellers have implemented. This could also have enough questionable activity of the handling of client funds for a class action suit. I'm not a lawyer so I don't really know. It is total BS though!

[tangle]

When is comes down to it the seller are **bleep**ed, with all the money  PayPal going to be keeping and how much intrest are they going to be making on our money in 21 days?  I do not want to be payed intrest I need the money to keep my business going, no other credit card comany holds fund to see if the buyer returns it,  Somehow I do not think this is totally legal and how would PayPal like to be involved in a Class Action Law Suit?