paypal holding every transaction for 21 days

brettcta

on sunday i received my first ever dispute for an INR. i didn't know anything about it until the dispute appeared (buyer never contacted me).

i've woken up to an email this morning which reads:

Dear XXX

We're writing to let you know about a change to your PayPal account.

Starting 12/06/2012, money from payments you receive will be placed in a pending balance for up to 21days. By doing this, we're making sure that there's enough money in your account to cover potential refunds or claims.

Even though you can't access the money right away, please send orders quickly and communicate with your customers. After 21 days, you can withdraw money from each payment as long as the customer hasn't filed a dispute, chargeback, claim, return, or reversal.

The money may be available sooner if:
We can confirm that the item was delivered and 3 days elapse. This gives the buyer enough time to review the order and file a dispute if necessary.
Your buyer leaves positive feedback. (Applies only to eBay items)
This change isn't necessarily permanent. We'll review your account every 35 days and re-evaluate if we should continue to hold your payments. If we decide to stop holding payments, we'll email you to let you know.

Why are my payments being held?
We reviewed your account and determined that there's a relatively higher than average risk of future transaction issues (such as claims, or chargebacks, or payment reversals). We understand that it may be inconvenient to have your payments temporarily held but please know that we didn't make this decision lightly.

Before deciding to hold payments, we consider many factors. These factors include account and transaction activity, the rate of customer disputes, the type of business a seller runs, average delivery timeframes, customer satisfaction, performance and history.

so one dispute in 137 transactions (with 100% feedback and stars no lower than 4.8) that was refunded in full within an hour of being received and i'm deemed to be of a sufficient risk that they want to hold my funds for 3 weeks for EVERY transaction?

this was my sole source of income at the minute as i'm out of work. god knows what i'm going to do now, this is going to really affect my ability to post anything out in a couple of weeks when my available funds in my bank get low.

THANKS PAYPAL, YOU'RE THE BEST

brettcta

this is a particular kick in the spuds because i was just in the process of opening up my own webstore (and using ebay to promote it).

i don't think i'm going to be able to afford to stock it whilst this is in place as i need the funds obtained from selling to be able to re-stock and re-sell

hermum

Are you selling expensive items? Or selling on a private ebay account when you appear to be a business?
It may be worth phoning paypal & seeing if there's any way round it.
I'd sell lighter items at the moment so that the postage will be relatively low & always FB for your buyer in the hope that they are quick to leave for you as well.

brettcta

my items are no more expensive than £30 and i'm registered as a business.

the item that was disputed and refunded was £16

i always leave feedback when i'm marking the item as dispatched

Invalidation

From what I can see what Paypal are doing is illegal, they have no legal right to hold money which is not theirs to start with

hermum

Invalidation wrote: »

From what I can see what Paypal are doing is illegal, they have no legal right to hold money which is not theirs to start with

It is in their t&c's I believe.

OP I would try & get through to someone sensible on the phone, it does seem crazy over such a small refund that you gave easily.

RFW

Invalidation wrote: »

From what I can see what Paypal are doing is illegal, they have no legal right to hold money which is not theirs to start with

It sounds harsh but can't see how it is illegal, lots of financial/legal institutions temporarily hold funds. The reasons they claim to hold are for the benefit of the customer.

As for the OP, if you are sending higher value items, if you send them tracked and log the tracking details with Ebay then the funds will be released sooner.
I'd also look at my listed despatch times and try and speed things up as much as you can.
If you keep doing everything right and don't have any problems then the hold won't last long.

I was in the US for a while and set up a new account there to avoid confusion with my UK one, I had a hold there and used their postal equivalent of recorded delivery (except it works!), which I paid for through Paypal, funds were released as soon as an item was signed for. Not sure if you can get special or recorded logged through Paypal, I know you can Parcelforce, but that may be too expensive for you/your customers. All worth looking at though.

soolin

Ignoring all the 'its illegal' unhelpful posts I would echo the other posts and suggest you cann paypal and reason with them. Try just as they open or towards the end of the working day- I've actually managed to get things sorted quite comfortably if you get the right person on the phone.

Invalidation

hermum wrote: »

It is in their t&c's I believe.

OP I would try & get through to someone sensible on the phone, it does seem crazy over such a small refund that you gave easily.

Their T&C's dont override Consumer Law.
Yes reason with them by all means but if that fails tell them you will be charging them 10%interest per hour over base rate for every hour they hold your money, then send them a formal Letter Before Action.
Theyll crap themselves and give you your money.
Ebay and Paypal dont do court, it would open too many floodgates.

Invalidation

soolin wrote: »

Ignoring all the 'its illegal' unhelpful posts I would echo the other posts and suggest you cann paypal and reason with them. Try just as they open or towards the end of the working day- I've actually managed to get things sorted quite comfortably if you get the right person on the phone.

It wasnt an 'Unhelpfull post' dear, it was telling it like it is. Its illegal for them to hold you to ransom or hold money that doesnt belong to them

Their contracts state that they will pay out any monies owed and if there is a deafult they will claim it back from you NOT that they will illegally steal your money which is what they are doing

George_Michael

It wasnt an 'Unhelpfull post' dear, it was telling it like it is. Its illegal for them to hold you to ransom or hold money that doesnt belong to them

It would be more helpful if you could post a link to the relevant legislation covering this and also a case or two where a judge has actually agreed that what Paypal are doing is illegal.

but if that fails tell them you will be charging them 10%interest per hour over base rate for every hour they hold your money

So are you suggesting that the OP attempts to introduce terms into their contract with paypal after that contract has already been agreed by both parties? something which in itself is illegal.

Their contracts state that they will pay out any monies owed and if there is a deafult they will claim it back from you NOT that they will illegally steal your money

Well I suggest that you read the paypal user agreement again because the possibility of a 21 day hold IS ststed in there (and this user agreement forms part of the contract.

I don't agree with the 21 day hold in all instances, but stating that it is illegal without providing anything other than an opinion to back this up is pointless.