Paypal or not

[Jim Underwood]

What's wrong with PayPal?

[Josh Bass]

Hi. Bored. Posting.


I recently asked that same question, on a thread similar to this. Know what I found out? With Paypal, even AFTER your transaction has cleared, and the money is in your REGULAR BANK ACCOUNT, the buyer can STILL do a chargeback, and screw you! Unbelievable.

Here's my question from that other post, and the response:

Q: "once in your bank account, it's untouchable, no?"

A: --The answer is no. Paypal will hold the seller responsible if there is a charge-back and the buyer can show a valid reason, such as item not being delivered, etc.

The problem is, the seller can still get ripped-off because sometimes the buyer will say things about the item that are not true and do a charge-back and the seller will have a lot of problems getting it solved with PayPal if at all.

This is why a number of sellers refuse to use PayPal.

Also, the seller must have a feed-back score of 50 or better to actually qualify for PayPal protection. Less than that then the seller could be out of luck.--


Doesn't that make you just wanna cancel your Paypal account right now?

[Kaleem Maxwell]

Doesn't that make you just wanna cancel your Paypal account right now?

Indeed. lol. Thanks for the info.

[JM Underwood]

<<<-- Originally posted by Josh Bass : With Paypal, even AFTER your transaction has cleared, and the money is in your REGULAR BANK ACCOUNT, the buyer can STILL do a chargeback, and screw you! Unbelievable. -->>>

Josh,

Simply not correct.

I didn't really sign up to be a defender of PayPal, but I have to jump in here. I'm sorry to say most of what you are saying about PayPal simply isn't correct. What is the source of your information?

It's really not fair, and in fact does us all a big dis-service to keep repeating these mis-statements about PayPal. PayPal is one of the easiest and cheapest ways to pay and receive money safely on the Internet. Without it, it becomes very difficult to conduct online transactions unless the seller has a merchant account (accepts major credit cards). Most sellers on eBay and other auction sites and online classified forums (like DVInfo.net) do NOT have a merchant account.

So I would ask everyone, before you repeat hearsay or a rumor, check your facts with an authoritative source.

And a word of caution. Many of the sellers who DON'T use PayPal and claim it's due to bad PayPal policies, also want you to pay using money order or Western Union. Guess what? If you sent them your money in either of those ways, you have NO recourse if the seller doesn't ship. These sellers are highly suspicious IMO.

The reason I know your statements about PayPal are incorrect is that recently I have been looking to buying and selling some expensive items, and the question of PayPal and chargebacks came up. Or rather, it was grossly misrepresented. So I'm concerned about safety and getting my money. :-) So I did some extensive research.

The proper sources are:

1. The PayPal User AGreement
2. The PayPal Buyers Complaint Policy
3. The PayPal Sellers Protection Policy

Here's my summary of the above. You can read the detailed legal docs for yourself. But let me be clear. I AM NOT A LAWYER AND THIS IS NOT A LEGAL OPINION. This information is for non-legal, informal discussions only, and is not to be relied upon for any business, financial, or legal purpose.

If the Buyer files a complaint with his/her credit card company, or with PayPal, stating that he did NOT receive the goods, then the Seller will be asked for proof of delivery. If the seller provides proof of delivery, then nothing happens.

If the Seller cannot provide proof of delivery, PayPal will attempt to recover the funds from the Seller's PayPal account. If there are no funds in the account, PayPal can NOT debit your bank account. The worst they can do is suspend your account and/or seize any funds that come into your PayPal account in the future.

The key here is that just because a Buyer makes a complaint doesn't mean that the Seller is automatically charged for the funds. As with any good business practice, the seller should always require and maintain proof of delivery.

If the buyer's complaint is that the goods received were not as described, PayPal takes no actions to recover the funds.

On top of all that, PayPal has a Sellers Protection Policy. If you follow the proper steps when you sell the item, PayPal will not hold you responsible for a chargeback.

The bottom line is that if you, as a seller, have done nothing wrong, then you will not lose the money paid by the buyer.


On the other hand, as a buyer, you should be fully protected by your credit card company. But the terms of each company can be different, so you may want to call your company and ask for the specific details and steps to recover your money.

My credit card company is great. If I file a complaint with them that I did not receive the goods, they immediately give me a temporary credit until the dispute is resolved. They then ask PayPal and the seller to provide proof of delivery. If none is provided, then my credit becomes permanent, regardless of what PayPal does or doesn't do. Furthermore, there are no adverse actions taken by PayPal against me for filing a valid chargeback. YMMV.

[Jeff Donald]

Jim, you might want to spend some time at this site, PayPal Sucks.

I used to feel like you, and found myself defending PayPal. However, I have met too many individuals lately with "horror stories" about PayPal for them all to be false. I've not personally had problems with PayPal, but I do believe they are a company with serious problems. People use PayPal because they are convenient, not because they are a great company to do business with.

[Christopher C. Murphy]

Didn't Ebay buy Paypal? I'm pretty sure that Ebay would be better at managing the Paypal problems. Does anyone know the update on that?

Murph

[JM Underwood]

Jeff,

First, let me state that I do not care for PayPal's attitude nor their policies. In fact, if there were any alternatives, I would certainly give them serious consideration.

But the problem is there is no real alternative if you want to buy from small sellers. If you know of one, please let me know.

Now, this site, www.PayPalSucks, is another good example of misquoting PayPal policies. On the home page it states that the terms of service means that you waive your rights to a credit card chargeback. And then they provide a link to "credit card waiver page". Here they are supposed to be quoting PayPal:

quoting PayPalSucks:

PayPal reserves the right to terminate or limit account access privileges of buyers in any of the following cases: abuse by a buyer of the reversal process provided by the buyer's issuing bank; filing a chargeback against an unauthorized transaction; consistent failure to pursue PayPal's Buyer Complaint Process before pursuing any alternate reversal process provided by the buyer's issuing bank.

Here's the actual policy from PayPal:

PayPal reserves the right to terminate or limit account access privileges of buyers who misuse the credit card chargeback process to get their money back and keep the goods, or to recover payment twice for the same dispute, or to file multiple chargebacks without attempting to contact the seller or make use of the Buyer Complaint process.

This is quite different. The operative word is "misuse". I suspect the credit card companies will cancel you card if you continually file bogus complaints.

Perhaps it has changed since the law suit was filed.

IAC, I specifically asked my credit card company if I was protected against failure to deliver from sellers on eBay who used PayPal. The answer was an unqualified yes.

If you look at their "Alternatives" page -- I don't seen any viable alternatives to PayPal.
Again, if you do, please let me know.

Here's my problem. If a seller doesn't offer PayPal, and doesn't accept credit cards, the only viable option for anything over $100 is escrow.com. And that costs extra money, and it takes a long time for the seller to get their money. So most sellers aren't willing to use escrow.

What I don't understand is why some of the major banks and/or credit card companies don't open up a competitive service to PayPal. Could be a banking regulation thing.

In the meantime, I suggest that people only report on the facts. If they personally have had a bad experience with PayPal, then let us know. But like all rumors, they shouldn't be repeated unless you have the facts.

[JM Underwood]

Oh, here's an idea to protect your bank account against improper actions by PayPal. I have implemented this idea.

Open a separate account with your bank (usually no charge) that you associate with PayPal. Keep zero, or very small ($5.00) funds in it. IF you sell something via paypal, withdraw the funds immediately. THem transfer the funds from your 2nd bank account to your regular bank account.

This way, any "errors" by PayPal will only result in a returned check. And if you tell your bank that you did not authorize the check, then no overdraft fee.

Somebody should probably move all these PayPal posts to a new thread called PayPal Issues or something.

[Jeff Donald]

Open a separate account with your bank (usually no charge) that you associate with PayPal. Keep zero, or very small ($5.00) funds in it.

This would not be viable in Florida. I can't find a single bank that has free checking (or savings) without a minimum balance or direct deposit.

PayPal's policies have changes several times recently with the purchase by ebay and the recent litigation.

[JM Underwood]

Check out the BAnk of America Advantage Account. For $20/month gives you up to 3 checking accounts, and 2 savings accounts, no fees on anything (like MOs, cashiers checks, travelers ck, stop payments, etc.), free checks, free online, free online bill pay, etc. I have been extremely happy with BoA.

Oh, they also have more FREE ATMs than anybody. The online banking is great, you see all debit card charges within minutes of the charge. Customer service people are very friendly and helpful.

And with the $20/mon there no min bal required. But if you do have combined balance over a certain amt, there's no monthly fee.

[Josh Bass]

Well, I apologize if I gave out incorrect info. Here's the thread:

http://www.dvinfo.net/conf/showthrea...l&pagenumber=3

My question and the response to it are on the third page of the thread. Now, let's all play nice. This isn't DV.com .

[JM Underwood]

Hey Josh,

I see where you got your info. The problem is that the info Danny Fye posted is incorrect. And who knows where he got his info. And so it goes on and on, people repeating incorrect statements.

I believe that the proper response when you "hear" something like this is to check out the claim with the source. That's what I did when I first heard stuff like this. I read the PayPal policy docs, talked to PayPal, and talked to my credit card company.

The current PayPal policy documents simply don't support these statements. Now I suppose that PayPal can violate their own policies in which case they would be subject to another class-action suit.

As a seller, the best thing one can do is to get your own merchant account. But if you are only selling a few things here and there, it's not worth it.

The real problem with PayPal is that there is no real competition for the service they provide. If there were, a lot of the arrogant, one-sided policies that PayPal has would get changed to keep/attract peoples business.

If you want to buy something online from a seller who doesn't have a merchant account and you don't want to use PayPal/MO/Western Union/Escrow, then how do you pay for it?

[Giroud Francois]

use COD (cash on delivery) so the risk is not on your side.

[Josh Bass]

Well, my bad for the bad info. I shall be more careful in the future, and preface such statements with "hey, this guy said. . ."

[George Ellis]

On the free checking... If you qualify for a credit union, do it. Mine is $5 for a savings acct. Free share draft, free second savings acct.

http://www.creditunion.coop/how_to_join.html

Edit - The $5 is the minimum balance. There is no fee.