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?

[rcmcghee]

Let me add my $0.02. I have been selling on eBay, off and on, for many years now. I am NOT a business, I sell things to help pay my bills. On my latest auction, PayPal decided to hold my money for 21 days. I had to BORROW money from a friend just to ship out the item in question. This is NOT acceptable. I had never seen this before, so I immediately contacted the buyer, thinking they had initiated some kind of escrow payment. The buyer was completely unaware that PayPal had done this to them, so they called to complain. The PayPal rep my buyer spoke to said that I must have MISUNDERSTOOD the email and that everything had went through as NORMAL. PAYPAL LIED TO MY CUSTOMER! Until this policy is PUBLICLY trashed by PayPal, I will no longer do business with them.

[kbjoran]

I do not sell on eBay. I am a business owner. Recently, I sold tee shirts on a not-for-profit basis. Out of the $1400 in sales, PayPal made $75 in fees AND they're holding almost $450 for 3 MONTHS! I now have to fork out this additional money to complete the orders!

I accept credit cards in my place of business. I will be switching over to my credit cards processor's shopping cart. I can't afford PayPal.

[rownrich]

Socrcoach17 hit the nail on the head, this post needs to be forwarded to the BBB or attorney general to review Ebay\paypals business reasons for doing this, and only to select members from what research I have done this does not effect all ebay sellers.

I sold an item i did not want to, something I bought for my grandson that i was going to give him upon graguation from HS, a few years down the road. I was forced to sell to pay my mortg. Now the item and the money are both out of my hands and i will take a hit from my financial institution for not making my mortg pmt on time.

Just another way for corporate america to kick the small guy while he is down, if ebay was a financial institution they probably would have taken a bailout using taxpayer money then turned around and gave the execs annual bonuses with it. Thats how I now view this ebay/paypal relationship and after this transaction is completed i am cancelling both accounts that I have had for over 10 years.

[AKLonewolf]

I responded to this also...

I am pasting what I wrote...

It looks like all I see are people **bleep** about the cr** that Paypal does to us!! What about a solution!! Can't ANYONE out there, (Isn't this moderated? Isn't there a moderator?), tell us how we get our FU***NG $$$ if someone WON'T leave feedback??? I AM SICK AND TIRED OF PEOPLE USING ME!! PAYPAL USES US TO GET A FEE FOR SELLING, THEN THEY USE US TO GET INTEREST ON OUR MONEY. (I think they should have to pay us every dime in interest they collect with OUR money!!)

WHAT IF ALL THE PAYPAL USERS GOT TOGETHER AND DID A CLASS ACTION LAWSUIT??? We could sue them for the interest on the money they make and not giving us a way to follow their procedures. HEY! THEY set the policies and we folow them, right? Then why if they have a policy that our money can be released earlier if it can be verified the item was delivered, do they NOT give us a way to get this info to them to get our $$ released? I will tell you why... I did medical billing for a TPA, (Third Party Administrator), called Coresource. They would stamp claims received and we would have ten days to process these claims... Well, we would restampt them after ten days and because we would have identified how much $$ we would pay out the people would have to pay Coresource and then Coresource HOLDS the millions in the bank for additional time JUST TO COLLECT THE INTEREST!! I believe this is common practice in industries world wide and people like you and me get **bleep**ed ECERY time!

So... What happens? Paypal charges us a fee from what we sell, they hold it for up to ?? many days till either a feedabck or the tiem limit runs out. THEN they take 3-5 business days to transfer that money to my bank. (So if your money is relased on Friday afternoon adn you start the transfer on Friday afternoon, they get to collect interest from Friday to possibly the next Thursday! A week's worth of interest on HOW MUCH $$ overall.

They say we can use another service if we don't like it? First, go back to Ebay and see if you can accept anything other than credit cards or Paypal. NO! Anyway, NOT the point. If you provide a service and promote that service to the masses, then you have an obligation to not take advantage of the people who do business with you. Isn't that called "operating in bad faith"? That used to be the soul of a business. If you operated in bad faith you could be shut down. The ONLY way for them to prove that they are not doing this is to show WHY it takes three to five business days to "electronically" transfer my money to my bank. All banks do it, but it ain't right!!! And why it takes 20+ days to release MY money.

What if...

I go to...say... the grocery store. I buy $100 of food and pay with a check. Then they have made me pay for my food but NOW hold my food until my check clears? How long would this be tolerated? What about ANYTHING we buy with other than cash?? You don't get it till your money clears the bank AND then it could take us 3-5 business days before you have access to ?? item(s)

Am I stretching this a bit. Sure I am, but the principal is the same.

[RegRad]

Thanks femsol for posting that info.

Like many of you I have been left without payment even after the item was delivered and 21 day period has past... The buyer is in another country and is most likely not going to leave any feedback. Launguage barrier has made communication difficult. I will be giving paypal one more week to release my funds.... if they do not, I will be contacting the Freed and Weiss Law firm.

I had no problem paying my fees in the past, we link our bank accounts and they take thier money right away.... Now why have they turned thier backs on us?

-Reg 

[blue-c]

is there a fee for adding your name to the lawsuit?

[LizaShaw]

I must admit to all of you that as soon as I reported the package as having been delivered, the hold was lifted and I received my money. It was, however, a week later than the money was paid by my buyer, and I am one hundred percent opposed to this, since I have never given Paypal permission to take out an interest-free, week-long loan from me.

Here are some things I have learned from this experience:

1.) I will join the class action suit if I qualify, simply for the principle.

2.) As a part of my selling policies, I will now REQUIRE buyers to purchase the shipping insurance and return receipt, since this is what Paypal is requiring me to provide them as proof that the item was delivered. This will also protect me from the possibility of the shipping company damaging the perfectly good item, which would make it impossible for me to get paid for the item.

3.) I will be posting a message on any item's listing that I sell, which describes in full detail, Paypal's new scam. This way, buyers are aware of the problem before they bid.

Good luck everyone!

[reynolds]

---

@LizaShaw wrote:

I must admit to all of you that as soon as I reported the package as having been delivered, the hold was lifted and I received my money. It was, however, a week later than the money was paid by my buyer, and I am one hundred percent opposed to this, since I have never given Paypal permission to take out an interest-free, week-long loan from me.

Here are some things I have learned from this experience:

1.) I will join the class action suit if I qualify, simply for the principle.

2.) As a part of my selling policies, I will now REQUIRE buyers to purchase the shipping insurance and return receipt, since this is what Paypal is requiring me to provide them as proof that the item was delivered. This will also protect me from the possibility of the shipping company damaging the perfectly good item, which would make it impossible for me to get paid for the item.

3.) I will be posting a message on any item's listing that I sell, which describes in full detail, Paypal's new scam. This way, buyers are aware of the problem before they bid.

Good luck everyone!

---

[roryt10]

I COMPLETELY agree with all of these messages. I have 100% pos feedback and have received 30 feedback scores ( I should probably have 80+ but so many **bleep** ppl don't leave any feedback) I have always had funds available to me immediately and I have sold many diff things, including a camera and cell phones. My last sale was a laptop..THE EBAY AUCTION CLOSED ON 4/23 and the shipment was confirmed OVER 3 DAYS AGO. (PAYPAL, IF YOU EVEN READ THESE COMMENTS [WHICH I DOUBT] RELEASE MY FUNDS!!)MY FUNDS ARE STILL LOCKED. PayPal's policy of freezing accounts until either 1. you get positive feedback or 2. the item is confirmed as shipped are RIDICULOUS! Does PayPal have any idea how many people just ignore the feedback option when buying/selling on ebay? Even if you take the time to message them and remind them, they still can't take 1 minute to submit feedback.  The feedback system as a whole is a complete mess, all it does is **bleep** EVERYONE OVER.

Some of you made this point already : MAJORITY OF PEOPLE WHO SELL ON EBAY SELL BECAUSE THEY NEED MONEY AND THEY NEED IT NOW. How the **bleep** do you expect someone who is selling their things b/c they need the money to drop $50+ bucks shipping, packing, insurance w/out getting paid their money?---> it just puts them in an even deeper hole. Then, PayPal just hangs onto YOUR money for 2,3 4 weeks. What right does Paypal have to mediate the flow of money between buyer and seller? They have no involvement in the transaction other then being a means of moving money. That is all they have the right to do. There is no way they should get to decide when and if a seller gets the money for what they sold.  

Until this incident I felt PayPal was a good company. I build my rep up and my positive feedback score for what? to get blindsided with a freeze on the funds in my account for almost 3 weeks now?? There is no logic there, the more positive feedback you have and the higher your score should result in LESS OR NO RESTRICTIONS.

[CHIEFRANNY]

I Called Ebay about it today and the B**** hung up on me - they all gave me different reasons and explanations - ebay pointed fingers at paypal and paypal pointed them back at ebay - I think the FCC needs to split this monopoly up! what a scam! Ebay has been going down hill fast now they are just going to drag paypal along with it!!!!