The Wholesale Forums

[more4less]

After two weeks of ranting on everybody else's threads, I thought it was appropriate to create my own thread. I hope that this will become a sticky because I would like to just generally address what has become common PayPal issues and questions here.

PayPal is a great idea and for 95% of users it is a wonderful way to do business without any problems. BUT there are drawbacks and you should know them if you want to protect yourself. I would like to offer a few pieces of advice so you may avoid becoming another PayPal VICTIM.

1. PayPal is a great option for payment, but if you have any kind of volume in sales you should immediately consider a merchant account as well. If PayPal decides to freeze your account you are no longer able to accept online payments and you WILL see your sales dramatically decrease. Just like the saying goes, NEVER PUT ALL OF YOUR EGGS IN ONE BASKET. (This is also good because PayPal is less likely to freeze if they see you have an established merchant account)

2. Be aware that the Seller and Buyer Protection offered on PayPal is not exactly as it seems. You can follow the direction to the letter and still find yourself on the losing end of this 'protection'. Never buy or sell any item that you are not prepared to lose. We all know there are scammers out there and if they really want to get you they are going to get you. Trying to follow the rules is still recommended but don't expect them to protect you at all times. Keep your own documentation, research as much as you can, and do good business and your are bound to come out ahead. (Also note that typically neither of these 'protection' policies apply to international sales.)

3. As an extention of #2, never 'offer' insurance and signature confirmation as an option. For anything of value these must be required, at the very least you have to get a signature confirmation. These are the only tools you have to prove that the transaction was completed. Don't give up your protection because the buyer doesn't feel like paying for it. Because in the end it is up to you, not the buyer, to provide proof of delivery.

4. Always use your CC for transactions on PayPal. Mastercard and Visa only. AMEX and Discover are not recommended because in the case of chargebacks they do not hold PayPal responsible for chargeback and disputes. Also keep in mind that you have every right to dispute the charge with your CC company, but if you win, PayPal may very well debit your account for that amount. Be prepared to lose the money or spend a lot of time fighting with PayPal over lost funds, a frozen account, or worse, an 'authorized' withdraw from your bank account.

5. If you have to supply PayPal with a bank account in order to make withdraws, you may want to consider opening a second account just for PayPal and internet transactions. This can limit your vunerability to unauthorized charges. Keep in mind that these charges may cause your account to be overdrawn and assessed NSF charges, but typically you can have these reveresed if the charges were not authorized.

6. Never let anyone log into PayPal using your computer and vise versa. PayPal has a great way of linking accounts and occasionally it has no rhyme nor reason. PayPal does use ISP to link accounts though and although this is a silly way to link accounts, it is done and it causes problems for many. If at any time PayPal has 'linked' your account with another and the other user has a problem with PayPal, their problem now becomes your problem. For example, I found a story on Ebay's discussion boards of a woman who was frozen because her account and 17 others had been linked to a deceased persons account because of ISP 'rolling' assignment. Now it seems strange to me that PayPal would actually assume that all 17 accounts were truly linked but they did AND even though they actually did debit one of the accounts for the debt of the deceased person's account, the other 16 accounts were still being held responsible for the same amount. Talk about double dipping??????

7. Along the same lines as #4, don't try to fool the PayPal system. They do link accounts and even if people do not know each other they will freeze accounts for the misdoings of another. Example, Customer A buys from Customer B and pays with PayPal, Customer B then buys something from Customer C and also uses PayPal. PayPal discovers that Customer A has used a stolen credit card. All three accounts will immediately be affected. Even though Customer C had nothing to do with the original transaction they are still considered to be a receipient of fraudulent funds. This is the hardest problem to avoid because in all likelyhood your transaction was valid and without fraud. Again keep in mind that you shouldn't complete any transaction through PayPal that you are not prepared to lose.....

8. READ PayPal's ToS, and understand it fully. They are not very flexible if they catch you breaking a rule and if you have any kind of funds in your account they could be held for 180 days. Their ToS is long and complicated but it's the small print that has most often caused problems with users.

9. Keep in mind that despite knowing the ToS, you could still get burned because of the simple phrase found in it, "If PayPal 'believes' that you cause a liability to yourself, PayPal, or other members". This statement is so broad that it is often the only thing in the ToS that PayPal can get you with. Many people on this forum are dealing in high-risk electronic items. Although PayPal doesn't specifically disallow these items in their ToS, it seems that selling a large quantity of them in a short period of time is enough to trigger their system. I suggest selling these items one at a time and withdrawing the funds after each sale. Do not make another sale until the first one has cleared the bank. Once you have a little history you may be able to slide under the radar, but that is not guaranteed. Unfortunately, PayPal has no means of qualifying sellers before they get caught up in this nasty situation of account 'freezes' but if you only have one payment in your account at any one time the 'freeze' shouldn't hurt as bad. Also, refer back to #1. PayPal is less likely to freeze you if you have an established merchant account. If you get one, contact them and let them know, MAYBE it will help, but who really knows.....

10. If your PayPal account is frozen or you feel you have been unjustly treated, remain persistent. Supply all the information requested and follow-up constantly to assure they have received said information. Know your rights, there are many sites like www.paypalwarning.com and www.paypalsucks.com that can give you advice and resources in bad situations. Be prepared to report PayPal to all the appropriate authorities. BBB, FTC, and the AG of California and Nebraska to name a few.

As for me, after one month of a frozen account, I finally had my account released this weekend. They just acted like nothing had ever happened. It took more than 30 phone calls, more than 10 faxes, and I eventually reported them to all the named agencys above and more.

I am not sure what that final push was, but I did start a thread on Ebay Friday afternoon letting everyone know of 'My PayPal Hell'. I also kindly informed Ebay they would not be receiving my monthly fees unless they got them from PayPal. Again who knows what finally made them release my funds, but knowing that PayPal employees read all the Ebay discussions, I can't help but think they were hoping for some good publicity on my positive outcome.......

Please feel free to contribute any pointers of your own and I will add them to this post. Hopefully it will help people from getting caught up in the sticky mess that PayPal has become known for.

UPDATE: I just checked the email for my business and strangely there was an email from PayPal regarding my complaint to the AG of California. It kindly stated that the actual reason for my account termination was that I had failed to completely submit ALL of the requested information. It appears that one of the tracking ID's which I submitted 3 times had not made it into the computer and that is the reason for my account termination.

I know that is complete junk because my husband made only one sale on his account before it was frozen and cancelled because of mine and he had provided the proper information and PayPal even called his 1 customer, but his account is still cancelled, maybe we should file an AG claim on his account as well, NOT.

[MustHaveMobiles]

Did you write this or was it taken from another source? Only ask as I have recently read a similar post on another forum. Will take a look and see if I can re-find the forum post.

If it is your then you may need to speak to the other poster as they may be ripping your work.

[more4less]

Originally Posted by MustHaveMobiles

Did you write this or was it taken from another source? Only ask as I have recently read a similar post on another forum. Will take a look and see if I can re-find the forum post.

If it is your then you may need to speak to the other poster as they may be ripping your work.

Nope, this is all me, and I highly doubt someone could have ripped it off so quickly because I just posted about 10 minutes ago. Anyway, I wouldn't object any way. The more people who have the information the better they can protect themselves.

I can see how someone may come up with similar information because I myself have merely found this information from the hundreds of postings and stories I read at the previously named 'information' sites. I have spent a lot of time reading stories on these sites lately and I was just hoping to pass on some of the things I have learned.......

[guru4us]

I have stickeyed this thread for now. Good post. IMHO: doesnt matter where its coming from...its giving out good advice

[TheNiceGuyOK]

this is exactly why I now have a paypal account with false information. It has a virtual CC, and virtual bank account. Paypal has scammed me for alot of money ( someone hacked my account), and I will NOT alow this to happen again.

[maithai]

paypal recently decided to suspend my account, along with eBay. I was given no indication that they were going to do this. Its put me in a catch22 situation as i need to pay the suppliers, but if I cant get the funds from paypal, cant pay the supplier, buyer doesnt receive goods. Have sent the required information to paypal, but I will be very surprised if any of the buyers now give me positive feedback on eBay.

Thoroughly miffed about the whole situation, and having spoken to other people this has happened to, it might take months before paypal unsuspends my account!

[djltrading]

brilliant information and great advice, i temporarily took paypal off my shopping cart because i was worried they would freeze my account. but now i have a lot more information, am more confident on accepting paypal now.

[BillyA]

My friends Paypal account was recently frozen. In an official email and through securely logging into Paypal's Resolution Center, they are asking for his supplier information.

Is this normal?

[ara-uk]

Originally Posted by BillyA

My friends Paypal account was recently frozen. In an official email and through securely logging into Paypal's Resolution Center, they are asking for his supplier information.

Is this normal?

Yes David, they asked me for my suppliers as well when my account was frozen last year.

[Anthony]

Originally Posted by ara-uk

Yes David, they asked me for my suppliers as well when my account was frozen last year.

How on earth can they justify wanting your suppliers information?

What a complete farce!