I was using Pay Pal to process payments on my furniture website. Never had any problems until I had an exceptionally good month in Jan. 2010. After that month PP Risk Management sent me letters wanting to see proof of delivery which I promptly sent them. A few weeks later they notified me that they were going to keep 7% of my gross sales until I had accumulated $30,000.00 in a operating reserve account. I had no chargebacks on the website and had 100% feedback on E Bay. After doing this for a few months and seeing my profits dwindle considerably I removed Pay Pal as an option for payment on my website. The last transaction was done in August of 2010 and by this time they were holding $9,083.53 of my money. They told me they would have to hold these funds for an additional 180 days in case of chareback. In Decenber I did have a charge back of $1,066.00. They still had over $9,000.00 of my money and I had no seller activity since the previous August. Keep in mind I was not even accepting Pay Pal as a form of payment. When I talked to risk management they told me that the money that was supposed to be refunded to me in February of this year would have to be held another 180 days. They had more than enough of my money to deduct the chargeback and refund the difference. When asked why they couldn't do that the agent said "It's our rules". Luckily I have a real credit card company that handles my transactions and am a member of the Better Business Bureau in my community with A rating. I wonder how many small businesses have gone belly up due to self serving institutions who are not in fact banks but make their own rules concerning peoples livley hoods.
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