BEWARE: New Paypal funds holding policy

OK Folks, this one is lengthy, but if you do any transacting on Ebay as a seller, then read on.

So after I had recently sold an item on eBay, I check my Paypal account for my total balance....and lo and behold, here is what I see:

Important message about your account. From now on, money you receive will be temporarily held in a pending balance. To learn more, please read our funds availability policy:

PayPal Payment Holds
We're committed to providing you and your customers with a fast and secure payment service while keeping our prices competitive. To keep ourselves on track, we've established a Funds Availability Policy.

We might be throwing some new words at you here, but we promise to explain them in full detail. As part of our Funds Availability Policy, "reserves" may apply to certain accounts. A reserve is a percentage of your payments that'll be released at a later date. A related term is "payment hold." A payment hold is a type of reserve in which 100% of the funds received are held for a specified amount of time.

Payment hold - a longer definition
A payment hold is an amount of money that belongs to you, set aside by PayPal, while we make sure that your customers are satisfied. The payments received are held temporarily as a pending balance in your account, and released after a given timeframe. The funds may be released early if PayPal determines that the transaction has been fulfilled and your customers are satisfied.

Please note: Although not available for use, the funds are yours and will be reflected in your pending balance and eligible for money market dividends* for eligible accounts.

Why does PayPal hold payments?
Payment holds ensure that sellers have sufficient funds in their account if, for example, a customer files a dispute. This allows PayPal to provide a fast and secure payment service to you and your customers while keeping our prices competitive.

We know this is a change in the way we do business with you and we hope you understand that, if your payment is held, you haven't done anything wrong. In deciding whether to hold payments, we review many factors including transaction activity, business type, and customer disputes.

When do payment holds apply?
Payment holds may be applied to some or all transactions in your account. Here are some common reasons for holding payments:

•You have limited history or selling activity with eBay and PayPal
•You have an eBay feedback score of less than 100 or received fewer than 20 Detailed Seller Ratings in the last 12 months, and do not have a record of good performance
•If you have low Detailed Seller Ratings or other indication of below standard performance on eBay
•You have a high rate of customer disputes, claims or chargebacks
•You're selling in a high risk category or industry such as, but not limited to, tickets, travel, gift certificates, computers, consumer electronics, or cell phones
•Your payment activity is inconsistent. For example, you have a spike in selling activity or you started selling in a new category without an established history in that category
•The account information you have provided is incomplete or inaccurate
If your payments are held, PayPal will provide you with notice specifying the terms. The terms may require that the amounts received into your account are held for a certain period of time. PayPal will re-evaluate your account periodically and contact you when we stop applying payment holds.

If your payments are held, the funds will be shown as "pending" in your PayPal balance.

When does PayPal release the payment?
Payments will be held in a pending balance for a certain time period. For example, if you receive a $100 payment (after fees), the $100 will be held in a pending balance for the specified amount of time. After the hold is released, the money will be available for withdrawal.

The money may be released sooner if:

1.We can confirm that the item was delivered**
2.Your buyer leaves positive feedback. (Applies only to eBay items.)
To get access to this money more quickly, please process this order right away and communicate with your customers early and often.

What can I do to avoid payment holds?
Here are some things you can do:

•Improve your DSR feedback rating
•Avoid buyer disputes, claims, and chargebacks.
•If you have a buyer dispute, resolve it quickly.
•Process your orders right away and ship quickly using a service that provides tracking and delivery confirmation
•Communicate early and often with your buyers
•Make sure you confirm your address and phone numbers and keep them up to date
•Verify your account and keep your financials up to date
I'm a new seller. Will payments I receive be held?
Not necessarily. If you're a new seller with PayPal, we may hold your payments until you establish a record of good selling performance.

I'm a tenured PayPal seller. Will payments I receive be held?
Not necessarily. If you don't have a record of good performance or have limited selling activity or other indication of potential performance problems, your payments may be held.

Can held funds be used to pay for shipping?
If you print labels and pay for shipping through PayPal or eBay, the cost of shipping will be released from your pending balance shortly after purchase. Printing labels on eBay and PayPal is free. You're charged only the cost of shipping.

* For US customers, if you are enrolled in the PayPal Money Market Fund, you will earn interest on your held funds.

**We can confirm delivery if you ship the item with UPS, USPS or FedEx and either use PayPal or eBay shipping labels or upload tracking information from the transaction details page. This applies to US domestic shipments only. Once the tracking number reflects the shipment is delivered, PayPal will review and may release the Hold after 3 days elapses. This provides enough time for the buyer to review the shipment and file a dispute if necessary.

As a buyer, I can see this as being a good thing....BUT....as a seller, this sucks arse. So what happens if the buyer receives the item, and then claims that it was damaged, or that they never received it at all? Then what? They file a refund claim, get their money back, AND keep the item??? What if the buyer fails to leave positive feedback? What if the tracking link fails? As someone who ran the shipping department of a multi-million dollar company for almost a decade, and after having done thousands of international and domestic shipments, I can assure you that tracking does not always work properly.

So now I have to wait almost a month before I can use the funds from my auction???

My record and feedback on eBay are both perfect, so I fired off an angry email to Paypal telling them this sucks. I also told them that I might close my Paypal account, and use other sources of funding for my eBay auctions.

GRRR!!!

that's not new Eric...they have been doing that since last year for newer ebay users..it killed off quite a lot of "newbie" ebayers who have less than 150 feedback points IIRC and dno.t want to wait anymore for the buyer to be "SATISFIED" --a load of crap yes..... I am not affected by the paypal hold and will continue to use paypal until something like that happens to us long time users...

this started a FLOOD of people bitching about that and paypal and ebay both said "it is for the buyers protection", meaning your funds stay on hold till the buyer gets the stuff and leaves you pos. feedback..total BS I know, but they are in command, not us end users

That may be so, but as you observed, this was meant for newer eBay/Paypal users, and I have been with both for nearly a decade.

So I get a response from Paypal after I sent them a flaming message letting them know that I am NOT happy with their decision. The reply was an obviously cut-and-pasted generic response, made even more insulting by virtue of the fact that the guy who sent it had cut-and-pasted two paragraphs twice within the email he sent me.

So, am I against protecting buyers from getting broken and/or bad crap? Absolutely not! What bothers me is that my record with both eBay and Paypal are flawless, so when someone buys something from me, chances are they are going to be satisfied. Now, in the case of sellers with poor feedback and slow delivery times, that I can understand. But why am I being penalized?

In addition to that, Paypal also has the option to withold even the shipping charges until the balance clears after the item is delivered AND positive feedback has been left! This means that if I send a coffin overseas to India, I have to cough up the shippings charges myself until the original payment clears! I'm sorry, but since the whole concept (aside from free shipping terms) is prepay and add, what if you don't have the money upfront to ship the item?

While I can overall understand why they are doing this, I simply cannot understand why they are doing this to me.

I don't have the statistics anymore of the users that they had as of jan 2009 to now but it dropped in 1/4 because of that as well as the goal of ebay is to the "stores" or big sellers only they have hindreds,thoudans,..etc of points so they can stay online with whatever feedback percentage. Back then the were forcing ALL sellers to use paypal period in all ads or the ebay nazi's were flagging them.

NO DOUBT about it it is f****** b******t and the sellers who may have been around ebay 10 years but just never bought or sold are suffering badly.

Just like a retarded boss at the office, one person abuses the internet and the whole office is now blocked from sites.


oh and don't think your anger has not been noticed. Here's the #1 rant forum and site about paypal that has been onlne for many years since the early 2000's.

http://paypalsucks.com/ <<< catchy URL huh

Huh. Nice to see that I'm not alone in my gripes. Thanks, Mike.