posted on January 12, 2002 01:11:46 PM new
I was wondering about the piece of the puzzle that was missing, now I understand.
Paypal really created a mess. They're taking money out of an account, but decide after the fact there's not enough reserved (due to past history) to cover the transaction so they freeze the money. Just like a typical bank, screw their customers for no logical reason except for their greed.
[ edited by quickdraw29 on Jan 12, 2002 01:21 PM ]
posted on January 12, 2002 06:01:59 PM new
As I stated above. Go to a different board than this eBay board and air out your problems. All of us here can think of what should be done but we do not own PayPal or what ever NWREBEMM sells. We do not know the whole story and I am sure we never will. It's to bad AW doesn't have a monitor to come in here and stop this. This is a She said He said and then there is a They said. We as posters will never know both sides of the story. Well 3 sides of the story. Go to a different forum to discuss this. This is not Ebay related. Ebay is never mentioned in anyway in this Thread.
posted on January 12, 2002 06:16:10 PM new
Every issue brought to this board is "she said he said".
Paypal has a lot to do with eBay. The vast majority of credit card sales on eBay go through Paypal.
If for whatever reason the issues raised on this thread confuse or upset you Libra63, stay off the thread. No one is making you participate or read this thread.
posted on January 12, 2002 06:33:24 PM new
this is a question for NWREBEL- if you are having problem with paypal,then why do you use paypal to send fund to your vendor,as i understand it is a e check drawn on your bank account.
you can do wiretransfer or just write this vendor a check and priority the payment in 2-3 days.
now paypal said they dont have the money it is on the way back to your bank,your bank said not so,paypal has the money>it will come out in a few days,but then you muddy up the water some more by closing your account??
posted on January 12, 2002 07:01:36 PM newREAMOND It doesn't upset me it is just that WE don't know the whole story or what problems they are incurring. There has to be problems we don't know about so to air them out here is useless. In life we have problems and to solve them we have to do it ourselves not depend on others. No matter what all of us say here there are still things we don't know about. I suppose if it makes them feel better to bring their problems to us the so be it. But be honest and tell the whole story. We do not know the selling habits of NWREBEL so I feel that this is a useless thread so I won't read anymore.
posted on January 12, 2002 09:41:49 PM new
Libra, this is an important topic to discuss. Something serious happened concerning what could occur to anyone using Paypal. The whole point of any thread is to get the facts into the open and discuss them. I did't even know Paypal held reserves before I read this thread so don't dismiss this thread as irrelevant or unimportant.
posted on January 12, 2002 10:44:25 PM new
THE FACT REMAINS THAT WHEN I WOULDNT AGREE TO PAY THE BOUNTY PAYPAL WAS ASKING THEY CREATED AN EXCUSE TO CLOSE MY ACCOUNT AND FREEZE $2600.00 AND BLATANTLY LIE TO THIS FORUM WHEN THEY STATE THEY DONT HAVE THE MONEY. PERSONALLY I FIND US BANK HAS MORE CREDIBILITY THEN ANY CAMEL JOCKEY AT PAYPAL. GO AHEAD PLAY RUSSIAN ROULETTE AND IN THE MEAN TIME I AM GLAD TO BE PAY PAL FREE AND SMELL THE AIR FROM THE OUTSIDE OF ALL THEIR PROPAGANDA.
Correct me if I am wrong.....
In one of the more recent changes to the TOS new users (After Dec 8 2001) automatically agree to let PAYPAL withdraw funds as necessary to cover chargebacks & other necessary Fees..... as part of there signing up.
posted on January 12, 2002 11:11:47 PM new
THE ONLY THING YOU HAVE WRONG IS THAT PAYPAL TOLD JESSICAPITAL I CANCELLED THE ECHECK AFTER PAYPAL CLOSED MY ACCOUNT. GO FIGURE.
posted on January 12, 2002 11:19:31 PM new
BUT YOU DO HAVE THE STORY LINE DOWN. I REFUSED TO ANTI MORE CASH TO A DOTCOM WITH TRAIL OF FINANCIAL ISSUES WITH OTHER USERS. I WAS WILLING TO PUT $18,000 UP OVER 6 MONTHS AS WE AGREED BASED ON MY VOLUME AND THAT WAS THE AGREEMENT MADE WITH TODD AT PAYPAL THEN THIS CABOT GUY CALLS ME PUTTING THE STRONG ARM FOR MORE. I BLATANTLY TOLD CABOT THAT I CURRENTLY HAVE A MERCHANT ACCOUNT WITH GOOD HISTORY AND FELT UNJUSTIFIED PAYING 2.9% AND TRANSACTION FEES PLUS 5% HELD IN A PAYPAL SLUSH FUND FROM DAILY TRANSACTIONS. MY CURRENT ACCOUNT CHARGES ME 2.25 AND 30 CENTS AND I HAVE NEVER EVER IN TWO YEARS HAD ANY ISSUES WITH A REGULATED BANK. CABOT ASKED ME TO GIVE HIM MY CONFIDENTIAL MERCHANT INFO SO HE COULD VERIFY AND I LAUGHED AT HIM. 5 MINUTES LATER MY ACCOUNT IS LOCKED AND THE ECHECK IS CANCELLED AND REPORTED TO THE VENDOR THAT I DID IT. HOW DO YOU CANCEL AN ECHECK WHEN YOU CANT LOG INTO THE ACCOUNT? I KNOW PAYPAL WAS HOLDING OVER $2600 WHEN THIS ALL HAPPENED BUT NO BIG DEAL AS MY CUSTOMERS HAVE ALLREADY FILED BUYER COMPLAINTS AND ALSO STARTED THE CHARGEBACK PROCESS AND THE MAJORITY HAVE DOEN PAYED ME DIRECT FOR THEIR ORDERS AND HAVE BEEN VERY SUPPORTIVE.
posted on January 13, 2002 08:16:31 AM new
folks,dont believe the float is paying paypal bills,look at your own money market interest you are earning and tell me if this is enough to pay for paypal customer service rep time on the phone with you or working to resolve the issue.
it is not the float issue,it is the potential chargeback paypal is afraid of.
there is a major flaw in paypal business model,like they said over and over again,when a member withdraw the fund from his account and the chargeback comes a few months down the road ,who is stuck with the liability?????
posted on January 13, 2002 09:29:46 AM new
Well folks the story gets better now I am able to cancel payments while the account is closed. I just got another vendor who wants to know why I cancelled the payment? Let the record reflect I do not have access to any paypal screen to cancel any payments and have no desire to cancel any payments. This is nothing but paypal cheating the system brazenly.
>From: swapsell
>To: *****\Subject: Payment Canceled
>Date: Fri, 11 Jan 2002 13:56:04 -0800
>
>This email confirms that Swap Sell Trade has canceled the pending $112.17
>payment earlier sent to you.
>
>Amount: $112.17
>
>Note: refund
>
>
>To view your PayPal balance or other account information, login at
>the PayPal website.
>
>Thank you for using PayPal!
>
>Please do not reply to this e-mail. Mail sent to this address
>cannot be answered. For assistance, login to your PayPal
>account and choose the "Help" link in the footer of any page.
>
posted on January 13, 2002 10:15:48 AM new
hey folks,wake up and smell NO INTEREST INCOME ON FLOATS!!!
or it would be so small we would have a hard time finding it.
11 interest rate cuts and more to come from the fed.
leave this earning interest on float crap out of discussion please,you just dated yourself when you keep reiterating this,just like some senior citizens milling around looking to park their megabucks savings into jumbo cd yielding 12%,they may as well be in utah hunting for dinasaur eggs.
banks are SLOW in updating their online customer records,so if NWREBEL bank shows paypal has taken the fund on 1/8/02,TRUST ME it is gone,gone and gone.
where did it go and would it come back to NWREBEL EX BANK ??
stay tuned to this continuos cybersaga!!!!!!!
posted on January 13, 2002 10:28:00 AM new
I joined Paypal around when they first started. I haven't read the FAQ lately, but they explained it this way:
1. Buyer sends money to Paypal. Buyer is purchasing Paypal's service of transfering money.
2. Paypal takes a cut and gives the rest to seller as requested by buyer. Paypal has fulfilled their contract.
3. To successfully complete a chargeback, a buyer has to show that Paypal failed to give the money to the designated buyer and thus fail to deliver the promised service.
This made Paypal immune to chargebacks.
Hmmm, methinks this business model has fallen by the wayside. Paypal could probably go to court and get back any chargeback money the credit card companies took from them. But, then the credit card companies would refuse to allow any of their customers to deal with Paypal and Paypal would be out of business. So, Paypal has to allow chargebacks.
I bet you there was panic in the Paypal office when they realized this.
Now, to the issue at hand. It seems the issue is with "reserves" required of large companies. This doesn't effect me; I only get $50.00 - $100.00 per month via Paypal. So, for me this is a more philsophical question. And, so far, I have had excellent service.
For the most part, buyers RULE when they use a credit card. Buyers seem to have ALL the power. That is something sellers just have to accept. We live in a "consumer" society and consumers get all the breaks (from us honest sellers, anyway ).
Paypal is in a unique postion. They are subject to chargebacks as if they were a credit card company. However, unlike the banks, they are not making 10% - 20% interest on a huge pool of money they have lent out to credit card users. The banks can afford to eat a few chargebacks, bankruptcies, etc. Paypal cannot. Paypal has another problem. Paypal's sellers are all over the country. If they skip out, Paypal probably will not recover any money.
We internet sellers are also in a unique position. If a brick & mortar store gets an unwarranted chargeback, they can go to small claims court. My parents own a store and have done this a few times. We internet sellers are not near our sellers. So, credit card payments are much more convenient than checks. Yet, unwarranted chargebacks are much more difficult because we cannot threaten local court action.
So, for small sellers Paypal, Billpoint, etc. are very nice. An honest seller can give more time to work with buyers and avoid chargebacks.
For large sellers, maybe getting a merchant account at a local bank would be better. The local bank knows more about you and feels they have some leverage over you (where you work, your property, contacts with your family, etc).
For large sellers, Paypal is totally exposed. They have totally liability of chargebacks, yet absolutely no leverage with seller or buyer. I do not envy their position. I guess this is where the "rolling reserve" comes in. This gives them the leverage, or "margin of safety."
I cannot blame them for this. After all, as a seller, I do the same thing. I always insist the buyer sends payment before I ship my product. This gives me leverage (though, in the case of credit card payments, the leverage may be more illusion than fact). Still, I insist on this and consider it a reasonable margin of safety.
In effect, this is what Paypal is doing. This may be different than how things were done in the past. But, then, the internet is changing almost everything. New paradigms are popping up all over the place.
posted on January 13, 2002 10:40:17 AM new
NWREBEL,
sounds like things do not look good in your part of e commerce,are you expecting large chargebacks??
it appears paypal thinks it is coming
posted on January 13, 2002 10:47:52 AM new
The only chargebacks I am expecting is the ones I am telling my customers to initiate so the can make other arrangements to pay me which 98% of my dealers have allready done so. We have normal fdic regulated merchant accounts that we use as well. Paypal was just one option for our customers and by no means was our dedicated payment processor. I learned early on that you never leave your eggs in one basket and I feel that I have taken the precautions needed to stop these tactics by paypal. I do hope people listen to these stories and consider their options as if your riding with just paypal you could be bankrupt without notice.
posted on January 13, 2002 10:58:37 AM newTechnerd, no one is blaming Paypal for taking adequate security precautions. But what they are doing also amounts to a protection racket. If a buyer refuses to pay, they lock up the account, with the excuse that the member is somehow involved in fraudulent activity. Instead of giving adequate notice to the member, Paypal thinks nothing of putting the member's business at risk.
If you multiply this shady business practice by hundreds of thousands or even millions of users, yes the amount does become significant.
Now Paypal is creating a slush fund of users' money. Sure it's for Paypal's protection. As if they don't make enough money already. How long will it be before Paypal starts using that capital to cover operating expenses? Then when the bottom falls out, the money will be gone. What protection do users have other than Paypal's empty promises?
posted on January 13, 2002 11:26:12 AM new
paypal is born from an ingenious idea of facilitating person to person e commerce on that big gorilla site aka EBAY.
most ebay sellers back then sell from home,sell a few items and are happy to make that extra dough.then comes the traditional retailers who have merchants account and their own storefronts,they have bigger and better merchandise and they learn to accept paypal payments as their bidders like paypal.
then come liquidators,wholesalers,drop shippers ,overseas participants and the picture gets complex-more volume,higher dollar amount,scams and squabbles.
not all cyber transactions are good candidate of paypal form of payment,some should have gone thru wire transfer,cashier check or money order or merchant account.
paypal is not exactly an innocent victim,it should know how to say NO to certain transactions as someone points out ,its busines model does not prepare paypal for large losses such as chargebacks.
it is true that cc company sides with its cardholders,if you think mc/visa are bad news for the seller,wait till you hear more about how AXP sides with its members.
but then like i pointed out to a lady in customer service,there comes a time we retailers are either wiped out or just cant afford to accept too many cc transactions,these customer service staff will be out of a job!!!
the credit card industry has yet to come up with a fair and equitable way to process internet transactions,all that real time authorisation,avs etc dont mean much when you dont see a person face to face or have him sign an order receipt.
remember the telephone company which used to complain interent surfers are using too much of their resources staying on line while the traditional customers usually yak no more than 20 minutes on the phone,well,what about the extra business (second line)it is getting from internet users?
now they are offering internet service provider.
never a dull moment.
merchant account is not exactly a rose garden either,you have to listen to your banker lecturing you on how you should assess your risk and build that into your profit margin,nothing worse than listening to a backseat driver)
posted on January 13, 2002 01:39:41 PM new
http://www.swapselltrade.com/PAYPAL.htm
here is a screen shot of my credentials. We have done over 2200 paypal transactions in 2 years and in that time we have had 32 attempted chargebacks that we have won through the seller protection plan. Now what it boils down to, is some of these people paid with plastic and paypal is getting hit with $20 per complaint and occasionally has to refund a purchase even though we delivered product or service and won the dispute in the paypal chargeback process. So paypal basically said their risk was huge because the amount of volume we run on average is $15,000 to $25,000 a month and if for some odd reason we close out our account paypal would still be open for chargebacks from the credit card companies because in legal terms paypal is the merchant accepting cash from the card company and credit card chargebacks can come in for over 6 months from the time a company would close its accounts and paypal could not recover from the company because they are not a bank, nor do they have the regulated right to go after your funds electronically. So in closing, if paypals dispute team lost 15 of 33 chargebacks there exposure would be to lose the cash back to the card company. I agreed to a reserve as a business person I agree with that concern. But after I set the reserve up paypal called and asked for more cash which would have been $20,000 tied up over 6 months and I could not fathom some private unregulated dotcom holding that type of cash as we all know you have no recourse but to file a lengthy lawsuit and hope you can collect. With Paypals recent history and horror stories I told paypal I was refusing to honor that request. If paypal would have offered a regulated trustee to monitor thesefunds then I could see the possibility of playing ball under these tersms. But on the other hand I do have normal merchant accounts that charge me way less and require no deposits. My opinion is that paypal is squeezing the system as much as they can legally do, prior to the IPO, with the intention to manipulate its position at the opening bell. Or another theory is cash flow is tight and the devlopment team created these new strategies to enhance paypals slush fund to pay operating expenses.
posted on January 13, 2002 03:12:32 PM new
in your earliest thread,you said you do 50-75k a month? now you said you do 15-25k a month,which one is correct?ar are they both correct?
if you have 32 chargebacks thru paypal ,i can see you just answered your own question in your prior post,paypal may shelter you from the loss because you comply with their seller protection program but paypal is paying 20 dollars chargback fee and eating these chargebacks on your behalf.
so in that sense you are a bad risk,nothing personal but like in the insurance industry,the actuarials crank up the numbers and tell the underwriters,enough is enough.
-continue the coverage with this client,and more losses will come,thats why auto insurer,health provider ,disability insurer do to protect themselves,
insurers do not have o take on bad risk,that s why they have the assigned pools.
i belong to tripe a AAA and they come to jump start my car twice,i bet if i abuse this privilege to the extent the 57 dollars a year membership is worth earning,they will not renew my membership.
i know you are in a difficult situation,may be the best thing to do is to review your business practice and see why your customers are initiating charge backs.you said you have a merchant account and there is never any problem,then why are you getting them via paypal,is that a diff breed of customers who are troublemakers??
only you can gauge your business and decide what next??
posted on January 13, 2002 03:30:00 PM new
yes we do 50 to 75K a month total sales with all payment systems in place and as I said before we never keep our eggs in one basket so thats why paypal only gets a percentage.
With respect to claims, I think we have lost two even with proof of delivery. All of our claims were addressed with tracking documentation as required by paypal, refunds for electronic products, or order replacment.
I think our number of complaints versus our number of sales is normal with any internet business due to buyer remorse, credit card fraud , people trying to beat the paypal systeme.
With respect to the fees paypal pays that is something that should have been equated into their business model and not expect to change the terms when as they go along.
My final question is this, if a seller has $5000 a year chargeback protection and has documented all deliveries, how does a reserve allow a seller to use the entitled $5000 protection that was offered at signup? Or why would paypal ask for $20,000 to cover potential chargebacks? In doing so they void the seller protection clause offered in their terms of service.
In closing how many people here would allow paypal to hold onto $20,000 with no regulations or assurance to the safety of this deposit?
posted on January 13, 2002 05:47:48 PM new
is that 5000 a year protection from the X.COM days??because i am not aware paypal has extended this protection to me or anyone i know who uses paypal??
so if you do 50-75k a month and 15-25k is through paypal and so far you have incurred no chargeback with your merchant account and yet 32 with paypal,and you said this is all normal course of internet business.
if so,then why not your merchant account getting chargeback,do you have a brick and mortar store,do you use paypal in cyberspace and merchant account on land??
i am trying to fathom why bad apples only exist in the paypal portion of your business?
you have also added more to this paypal chargeback statistics by urging your recent buyers to do chargeback.
this is becoming a catch 22 situation -close your account,urge customer to do chargeback,close bank account.
all these lead paypal to protect itself by asking for more reserves,locking up your money and freezing e check to your vendor.
since the loss ratio between your merchant account and paypal account is so lopsided,0 versus 32,i am beginning to wonder if you have deliberately encourage those potential troublemaker customers to go thru paypal??
posted on January 13, 2002 06:07:15 PM new
I have pondered that many nights.
I do take phone orders from our site and we have no retail setting as we ship from many facilities within our network of suppliers.
I think that chargebacks are higher with paypal because of the fact people are fearful they may not receive the goods because the customer never actually speaks with a person as its an instant purchase.
With my merchant account, I must verify the billing address and zip code and we do talk verbally with these clients so they are more confident in their purchase as they make live human contact rather then a dry web purchase.
As I stated before I would say 100% of my buyer complaints were addressed with tracking numbers, refunds, or product replacements.
posted on January 13, 2002 06:31:19 PM new
slowly and surely you are answering your own questions-you ship from your network of suppliers.i assume these suppliers are all over the map,and you dont have absolute control over what and how they stock and when they reorder and when their employees work on your orders??
all these factors out of your control could just spell one thing -CUSTOMER DISSATISFACTION.
yes,when customers are dissatisfied,THEY DO CHARGEBACK in your case.
i may also assume these customers of yours who use paypal are cyber resellers,ebay perhaps?? so they could have already presold your items and now your shippers have either backordered their items or substitute items without their permission or just plain slops in packing and shipping could make them MAD AS HELL,not to mention the infamous loss of face and getting a big fat NEG from their ebay or yahoo bidders.
my friend,it is your business model of being a drop shipper of diversed product lines,selling what you dont own to someone who presell before items arrive??
a pretty bad scenario when things dont work right.
posted on January 13, 2002 06:52:30 PM new
When I state we ship from facilities, we attend wholesale shows nationwide for buying purposes. When we attend these shows we make purchases of product that is either delivered to our warehouse for distrbution or we purchase the goods and arrange for shipments from the vendors warehouse as some items may be to bulky and not cost effective to ship from one storage unit to another for resell purposes. How many times have you went to your local store and your item had to be delivered or shipped from another location. Its the way business is done Our policy here is to ship within 72 hours and we allow up to 21 days for complete deliveries of any product and in accordance with federal law we do offer refunds if somehow the order was not delivered in full due to error on our part. We offer rush shipping for additional fees. But once again all orders we process can be verified and proven shipped in accordance with our user agreements.
).