The story of a small business and the Evil Paypal Empire.
Discussion
I run a small business with an annual turnover of 80k. We have a small webshop and supply goods internationally. We use paypal as our web merchant but use World pay for our phone payments.
I have had a paypal business account for 13 years. It has a good rating and I have never been a naughty boy. When I get an order paid into paypal from the website I usually move the funds to my business account within 24 hours.
The problems started five weeks ago when I logged into to paypal to find my account had been limited. I could not withdraw or spend any of MY money. The worse thing was that recently I had just been letting the funds stack up in the account and not withdraw after every order. There was now several grand sat there. This is no small amount in terms of cash flow for a business our size. It almost seemed like Paypal had been waiting for the account balance to go up before they limited it!
So why had I been limited? According to the email I received it was because I was taking more funds than normal (business was doing well) and they wanted to carry out an audit.
I had to submit a whole host of information. There were at least 20 questions. What was my turn over, how much did my products cost me, copies of supplier invoices, last years P+L statement from my accountant, tracking details of random orders etc. It literally took me hours to answer and collate all the evidence.
Once submitted the wait began. There were 5 phone calls all with promised resolution timescales that all flew past. Emails were just returned with generic computer generated answers.
In one conversation I demanded to know what I had done wrong. No answer could be supplied. I was then informed that clause 10.3 means Paypal can hold onto my funds for 180 days with no reason required!
I asked how to make a formal complaint and was told to do it online. The catch being they had 8 weeks to respond.
I finally was called from a foreign number by a Spanish gentleman who apologised for poor service and said he would sort it. Once again he confirmed I had done nothing wrong and my account was in good standing.
I then got and email explain that Paypal were going to keep 2k of my money and take 20% of everything that comes through my account from now on. The 2k seems to have no timeline as to when I might get it back the 20% is 60 days.
They said they might think about releasing the 2k when the funds from the 20% takings get up to that level.
This puts me in a real predicament. After the way they treated me I am in the process of changing my website over to use Worldpay as a payment method. This means I am very unlikely to take the 10k through paypal required to ever get my 2k back.
The only option I have left is to wait 180 days and then ask for it again.
Basically what paypal have done is remove all my cashflow in one swipe so I will struggle to trade and then ensure that I don’t get any profit for the next two months by taking the 20%. They say they are doing this in case my business fails but what it really feels like is they are trying to make my business fail.
Did you know paypal are not regulated by financial services authority in the UK? Although they do s
t loads of business in the UK they are “officially” based in Luxumberg so get away with no regulation of their practices.So my warning to all you business owners that have to do business with paypal is always, always, always empty your accounts when funds appear.
Nothing to add, other than that I will shortly be jumping back into these waters, and your post has made me reconsider my customer payment options. Paypal need to understand that they're not the only option out there, and if they want to improve u0rake, they need to apply some decent business practice.
When I first read your post, my reaction was "They're complying (perhaps over-zealously) with money laundering regs." But if they're already unregulated, then they provably don't give a st and are just throwing their weight around.
When I first read your post, my reaction was "They're complying (perhaps over-zealously) with money laundering regs." But if they're already unregulated, then they provably don't give a s
t and are just throwing their weight around.I've just sold something on eBay for the first time in a couple if years. Buyer pays but nothing shows in my account, eventually I discover that PayPal are holding the funds for 21 days "to ensure eBay is a safe and trusted place to buy"! This is despite signed for delivery and positive feedback from the buyer
Needless to say this will be the very last thing I ever sell via eBay. Only if they start to see revenues fall (which they truly deserve) will these sharp practices end.
Needless to say this will be the very last thing I ever sell via eBay. Only if they start to see revenues fall (which they truly deserve) will these sharp practices end.
MercScot said:
I've just sold something on eBay for the first time in a couple if years. Buyer pays but nothing shows in my account, eventually I discover that PayPal are holding the funds for 21 days "to ensure eBay is a safe and trusted place to buy"! This is despite signed for delivery and positive feedback from the buyer
Needless to say this will be the very last thing I ever sell via eBay. Only if they start to see revenues fall (which they truly deserve) will these sharp practices end.
I used to be an avid user of ebay both selling and buying. Basically anything around the house i wasnt using i'd stick it on ebay, plus the odd item i bought to resell.Needless to say this will be the very last thing I ever sell via eBay. Only if they start to see revenues fall (which they truly deserve) will these sharp practices end.
Got to the point where its simply not worth the hassle. The fees, the risk of bad feedback, the demands of buyers, buyers not paying, complaining of being sold a "faulty" item, wanting a return, etc, etc.
I now sell to webuybooks, CEX or GAME, or on Gumtree.
I used to deliberately not pay for things with paypal as it sounded like a middleman taking a cut of the profits, which would eventually put prices up for everyone. I've since changed to using it more regularly, mainly for the convenience and safety of not having to enter my credit card details online.
What I don't understand is why stuff is usually cheaper on ebay when both ebay and paypal are taking a cut? For example, I needed a new headlamp switch for my TR7. I found the part on a few different websites, but ebay had a few sellers listing it cheaper.
What I don't understand is why stuff is usually cheaper on ebay when both ebay and paypal are taking a cut? For example, I needed a new headlamp switch for my TR7. I found the part on a few different websites, but ebay had a few sellers listing it cheaper.
Simpo Two said:
Get another e-mail address and another bank account and start again. It will keep you trading until you get your money from the other one.
Seems to me that this advice may be unsound - if they notice it could look like you're trying something dodgy and reinforce their arguments. Currently you've done nothing wrong.We had a similar thing a few years ago with PayPal. They would hold a percentage of turnover going through them. 30% for 90 days rings a bell. This was because we had a couple of genuinely idiotic customers kick up a fuss over nothing. One received a product, part of which they claimed was damaged (scratch). We asked for the damaged part before sending a replacement, they refused and complained to PayPal.
Took a long long time to get the reserve removed, around 18 months. Since then they regularly contact us to try to get us to put all our card transactions through them (millions) at which point we oh so enjoy regaling them the above tale with the conclusion of absolutely no chance you disgraceful money grabbing business hindering soleless law unto themselves shysters!
On another note haggle hard on transaction fees. They do want business, they will drop significantly on their charges. Although they'll never match the minuscule charges you'll pay a normal merchant service provider for debit card transactions.
Took a long long time to get the reserve removed, around 18 months. Since then they regularly contact us to try to get us to put all our card transactions through them (millions) at which point we oh so enjoy regaling them the above tale with the conclusion of absolutely no chance you disgraceful money grabbing business hindering soleless law unto themselves shysters!
On another note haggle hard on transaction fees. They do want business, they will drop significantly on their charges. Although they'll never match the minuscule charges you'll pay a normal merchant service provider for debit card transactions.
If you email Paypal they send you generic email responses.
It seems the only way you can contact Paypal is by phone. This means you have no written record of your correspondence with them. I really would like to have a response about why they are holding onto my money in writing.
I will try the email address of the UK director and see if I get anything back from that.
The more you look into it on the internet the more other dodgy actions you find they have taken with peoples money. The thing is, they are by all intents and purposes a bank but some how they get away without having to comply with any of the UK financial regulation that any other financial service in the UK has to.
I think it is a case of big American corporation thinks they can do what ever they like. I bet they do not pay hardly any tax in the UK either.
It seems the only way you can contact Paypal is by phone. This means you have no written record of your correspondence with them. I really would like to have a response about why they are holding onto my money in writing.
I will try the email address of the UK director and see if I get anything back from that.
The more you look into it on the internet the more other dodgy actions you find they have taken with peoples money. The thing is, they are by all intents and purposes a bank but some how they get away without having to comply with any of the UK financial regulation that any other financial service in the UK has to.
I think it is a case of big American corporation thinks they can do what ever they like. I bet they do not pay hardly any tax in the UK either.
Doofus said:
When I first read your post, my reaction was "They're complying (perhaps over-zealously) with money laundering regs." But if they're already unregulated, then they provably don't give a st and are just throwing their weight around.
Not strictly true.t and are just throwing their weight around.They are regulated in Luxembourg and will have some money laundering regulations as they are in the EU.
I had a similar issue, but with the suspension of eBay accounts. On the same day, my personal eBay account and the one I used for the company I worked for were both suspended. The most annoying thing is that they won't tell you why they chose to suspend it, just point you to the Ts and Cs and say "you must have contravened one of those". And at the level I was dealing with them, the only option was to email them and wait while they lowered themselves to respond.
Garage19 said:
So my warning to all you business owners that have to do business with paypal is always, always, always empty your accounts when funds appear.
IMO that is why you have been flagged, usually have small amounts transferred but waited for larger amounts? I've been with Pay Pal 14 years and had no issues (touch wood!). They did limit our account last week but that was resolved within 48 hours (we hadn't emailed PCI compliance as they hadn't sent the request to us). Don't get me wrong they are a ball ache to deal with at times but don't think other providers are automatically any better as they aren't in my experience. BTW, if you get Pay Pal Pro you could use their virtual terminal rather than World Pay so all sales go via the resulting in better fees. The downside is obviously you then have all of your eggs in the Pay Pal basket. It's a shame Google Checkout went out of the window as offering multiple payment gateways is never a bad thing. Try this email address :- europeanservices@paypal.com or business-support@paypal.co.ukGassing Station | Business | Top of Page | What's New | My Stuff