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Coping with PayPal Payment Holds

Coping with PayPal Payment Holds

Erika Garnica, eBay PowerSeller and ex eBay Top Seller account manager, explains how to avoid Paypal holds.

Although PayPal has become a common and thoroughly entrenched aspect of selling on eBay (indeed, on the internet in general), there are many aspects of PayPal that often confuse sellers.  One of the most confusing and frustrating of these is the policy of payment holds.

Hopefully this article will be able to shed some light on PayPal's payment holds policy, and provide you with some suggestions on how best to operate successfully and profitably within the confines of the policy, and how to minimize any negative impact it may have on you.

When the policy of PayPal payment holds was introduced a couple of years ago, many sellers were very upset about it.  Like many other changes that were introduced during that time, many sellers felt it was meant to be an insult to them, when in fact it was meant to help sellers by bringing more buyers to eBay.

Since that time, payment holds have indeed since proven to be a huge benefit in terms of bringing buyers to eBay (or back to eBay, as the case may be).  And isn't that what we all want, more buyers? It inspires great trust in buyers and persuades them to purchase more items on eBay, since they know PayPal won't release the funds to the sellers until it's clear they have received their items. 

When you really think about it, any seller who is honest and deals fairly with his buyers should have no problem with PayPal payment holds.   And when you realize how quick and easy it is to get the funds released to you, as well as how to avoid the majority of payment holds, it shouldn't be a matter of concern.

In short, the best way to handle PayPal payment holds is to focus on and pursue the best and fastest ways to get the funds released to you, as well as how to avoid most payment holds in the first place.  

How to Get PayPal Funds Released

First, if you ship your items yourself, from your own inventory, the best thing to do is to print your labels directly from eBay.  That way your tracking numbers will immediately and automatically be linked to their corresponding PayPal transactions, and in just about every case, PayPal will release the funds to you within 2-3 business days after the items have been received. 

And even if you're dropshipping items, it's almost as easy to get the funds released to you as well.  As soon as you receive a tracking number from your supplier,    immediately upload it to its corresponding transaction in PayPal (there's a button to do so next to the transaction record in your Transaction History), and the same process applies -- within 2-3 business days of the buyer receiving the item, PayPal will release the funds to you.

It's hard to imagine a situation in which you wouldn't be able to do at least one of these two things, but in the rare case that neither option will work, you can be very assertive without being pushy and contact your buyer the day after they should have received the package (give them at least a day to check out the item, please!), either via email or phone, and ask them if they're happy with the item and, if so, if they might be willing to help you out by going ahead and leaving positive feedback for you.  

If none of the following occurs, PayPal will release the funds after 21 days, provided the buyer hasn't filed a dispute regarding the transaction.   But obviously, 21 days is quite a long time to wait for a payment from a buyer, particularly when you've already sent the item, so that should never have to happen.

How to Avoid Payment Holds

The next facet of coping with PayPal payment holds is learning how best to avoid having them placed on your payments in the first place.  There are two components taken into account in this matter -- your status as a seller and the items which you sell.    Although one or two factors within these two areas are out of your control, fortunately, most of them are completely under your control:

Seller Status

Here are the elements of your status as a seller that help determine whether or not PayPal will hold any of your payments:

  • How long you've been selling on eBay (i.e. less than 6-12 months)
  • Your overall Feedback score (i.e. less than 100, high rate of negatives/neutrals)
  • Few DSRs (Detailed Seller Ratings), specifically less than 20 in the past 12 months
  • Low DSRs, specifically 1s and 2s (compared to your total number of DSRs)
  • High rate of buyer disputes (compared to your total number of transactions)
  • Inaccurate or incomplete account information
  •  Inconsistent payment activity (i.e. you normally receive $100-300 in payments per week, and all of a sudden receive $5000 in payments in one week)

Items You Sell

Here are the factors PayPal considers in regards to the items you're selling on eBay:

  • Sudden change in products (i.e. you've been selling in the Baby category for several years, and then all of a sudden, you start selling capital equipment in the Business & Industrial category)
  • No established history selling products in that category (whatever the category may be)
  • Selling products in a "high-risk" category -- Tickets, Travel, Gift Certificates, Computers, Consumer Electronics, Cell Phones, etc.

Obviously, at some point, every eBay seller meets at least 2 or 3 of these criteria.  The good news, though, is that PayPal judges each case on an individual basis, and just because you may meet 1 or 2 of these criteria doesn't necessarily mean any or all of your payments will be held. 

As a final note, many sellers are under the mistaken impression that this policy indicates eBay's preference for larger sellers and/or discrimination against smaller sellers.  This is absolutely untrue.   You might be surprised to know that there are hundreds if not thousands of high-volume eBay sellers who are subject to PayPal payment holds and have their payments held on a regular basis. 

About the Author: Erika Garnica

eBay User ID theauctionguru
http://stores.ebay.com/theauctionguru

eBay Powerseller and Top-Rated Seller
Former eBay Top Seller Account Manager

 

50 Comments view all Add your comment
I've had some pretty bad experiences with PayPal as well. I went into my account to do a simple address change. It wouldn't go through so I called for assistance. I was hung up on THREE TIMES!!! Each time it was after I asked to speak to a supervisor because the person on the phone could not help. I used to really like PayPal before but now.....not so much. I ended up completely closing my account with them. Reply
PayPal has been nothing but nightmare to me. I live outside of the US and signed up as an affiliate to sell clothing online. I was told that I would need a PayPal account and so I set about trying to open one. After several tries I was utterly confused. I called PayPal and asked very direct and specific questions. Can I have a business account if I live in _____ country? The agent said yes. Can you help me to set it up? She said I had to do it myself. Eventually I got it and then I received my first payment. I paid my supplier and they shipped the items directly to the customer. Then PayPal reversed the payment. Gave back the customer the money and then told me that I owe them over $100 and Put my account on hold. I went through everything and cleared the account. I started again. Then I received another payment over $1,000. They put my account on hold again. Then after many frustrated conversations with them then I was told that I cannot have a business account in the country i live. Now, I can only advertise in my country and I have to collect money by hand from my customers. -- And I cut this story short. -- What a nightmare. Reply
Yes they give no reason at all to hold money and it does not even have to be related to ebay it can be somebody just sending you money for another reason. Paypal is not safe or secure and they do hold money up to 180 days? They don't have to right to abuse your business they are suppose to be providing a service and they stink at it! The best thing to do is have you own merchant account and stop dealing with these thief's Reply
Thank you for this i am very weary about getting an account with paypal now for my website. At the moment all transactions are processed manually through customer and i with no inbetween. i am unsure if i should go ahead with starting up a paypal account or leaving it the way things are, maybe someone else could shed me some light on this please? Reply
I lost $700 because of a fraudulent claim made by the buyer's credit card bank. I was paid by credit card which paypal accepted and notified me it was okay to send the item which I did. The buyer then told his bank that his credit card had been used without his approval and that his signature had been forged. A stop payment was then issued by the bank to paypal which they did immediately. Various negotiations were made between myself and paypal, but in the end a ruling was made in favour of the bank and the $700 was returned to them. The buyer get's his free item and I have to pay for what I knew was a fraud but was powerless to do anything about it. All this was after Paypal had authorised me to ship to the buyer. DON'T TRUST PAYPAL they are not on the seller's side and neither is Ebay who will allow negative comments by the buyer but none by the seller. Reply
hi, helpful information . fortunately i did not face that bad situation until now . i do dropship business on ebay , what i do exactly as you mentioned , i sent the track number to " paypal" , once i see " on courrier website ' my customer received his item i contact him to get the key to release my payment i mean " positive feedback " - another comment to " ayman badr" . forget to do dropship business on ebay without some investment . thanks for salehoo team work Reply
hi, helpful information . fortunately i did not face that bad situation until now . i do dropship business on ebay , what i do exactly as you mentioned , i sent the track number to " paypal" , once i see " on courrier website ' my customer received his item i contact him to get the key to release my payment i mean " positive feedback Reply
Free Member
I just want to offer a few comments here about our experiences with eBay and PayPal. I was surprised to learn that so many people have had a negative experience with PayPal. We have been active on eBay for over 10 years, and were using PayPal before eBay bought it outright from its original founders. We have never, and I mean NEVER, had a problem with either entity. We have found PayPal to be a boon and a blessing to operate on eBay and, indeed, outside of eBay, too. I have purchased various items over the Internet, using PayPal as a medium of exchange. We buy and sell on eBay with no problems whatsoever. I hope that continues to be the case. I am offering these comments with the hope that others out there who may happen to review this blog, will know that all is not bad with eBay or PayPal. With particular respect to eBay, we think it is one of the, if not the only, best run website on the Web. It is user-friendly and logically functional, and was so from the outset. We hope it will be around for many decades to come! Best of luck to you all. Reply
I've only had 1 freeze placed on monies paid for an item. The question was about the item's condition and ebay/paypal informed me of the buyer's issue and concern just before the freeze. I didn't have an issue with Paypal/ebay doing that as they were trying to protect buyer confidence in their system and I was afforded the ability to plead my case for review. I would have refunded the monies in question without the need by ebay to freeze that portion of the account. The matter got resolved in a timely manner between myself and the buyer. Upon receipt of the item in question I gave ebay the go-ahead to refund the buyer his money which they promptly did. The big surprise from that transaction was getting positive feedback. Usually I don't pursue the buyer re yes or no re feedback. It's voluntary on the buyer's part. I can't help but notice the subliminal sense of condtional approval by some ebay sellers about feedback: I'll give you 5 stars if you give me 5 stars but you the buyer have to give it to me first. I don't do this either. Upon receipt of payment the buyer gets positive feedback from me. I don't hold the prospect of "approval" over his/her head as a condition. So far this non-conditional transaction behavior has worked for me. I have encountered no contentious behaviors from buyers. I also answer all questions from buyers no matter how insane. My best bidders have been the question-mongers. My main peeve with Paypal: UPS and USPS withholding of shipping funding. I don't object to the monies being tied up re "pending" awaiting USPS or UPS to do their monetary sweep periodically to get paid. USPS collects quickly, UPS is a nightmare waiting to happen. UPS will do a weekly sweep of my Paypal account and usually will get all monies owed yet every once in a while there will be 1 or 2 "pendings" they miss. When this happens Paypal releases the "pending" funds that were on hold back into my account. I wish Paypal would just hold the money owed UPS until the next their next weekly fiscal sweep because I'm tired of having to move other accounts around to re-infuse a negative balance if I dare use Paypal to buy something on ebay. Ken A. ,ebay seller since 9/05, 100% feedback, Powerseller also Reply
POOR PEOPLE TRYING TO SELL SOMETHING REALLY OR DESPARTLY NEEDING THE MONEY AND PEOPLE TRYING TO START AN ONLINE BUSINESS ON DISABILITY AND SSI AREN'T GOING TO BE ABLE TO SHIP WITH OUT THE SHIPPING FEE FROM THE SALE. THEREFORE PAYPAL IS JUST PREVENTING BUYERS FROM GETTING THERE ITEMS AND SELLERS FROM GETTING MONEY THEY REALLY NEED. TRANSACTIONS ARE JUST BEING WRONGLY DRAGGED OUT. THIS CRAP PAYPAL HANDS OUT IS RETARDED. THERE ARE MANY WAYS TO ATTRACT BUYERS WITHOUT SCREWING THE POOR AND INCOVEINENCING BUYERS WHEN THEY BUYER FROM PEOPLE THAT ARE POOR. I'M SICK OF EBAY AND PAYPAL NOT CONSIDERING AND SCREWING THE POOR WHEN THEY CHANGE POLICES AND OR ADD NEW ONES. Reply
You are so right! I want to sell a few things on Ebay but I need the money from the Buyer to ship the items. It never use to be like this. I use to sell on Ebay and get my money as soon as the Buyer paid. It's a no win situation for me. Reply
Free Member
PayPal's new hold policies apply because they don't care. All they want is your money. This happened to me several times and I ended up getting a credit card to put everything on it when I make a sale to dropship before PayPal release the money to me. But then, I learned the fact that it's extremely important for my business to never ship or dropship anything until the payments clear the bank, not paypal. Remember, the money have to be in the bank, and a person must be charged for that product so you can confirm that it was paid for before you ship it to that person. I don't care what PayPal or eBay wants. I want to work for my own business, not for eBay or PayPal. The best way to do that is to get a real online merchant account and a payment gateway like Authorize. It's much better for you. Reply
Well.....out of all the posts I've read here not ONE of them agrees with the article. Ebay/Paypal management should take note but they are oblivious and so arrogant as to think its their way or the highway. Ebay/Paypal carry the reputation of being the most hated companies on the internet they do not know how to keep their customers!....nuff said. Reply
Free Member
I have a google merchant account and have half set up a paypal account (merchant) this is for ecrater and not ebay. With the google checkout/merchant will i recieve funds before i send goods? What about paypal merchant? I think im going to stay away from paypal if this is the case. I ask as i have started dropshipping and obviously i will need all funds from the buyer before i can purchase the stock or the buyer will never recieve their goods as i would not be able to pay for the items. Paypal sounds complicated you say you have to send a tracking number to the buyer before funds are released but dropshipping you wont be able to get a tracking number until after you have recieved the funds and paid the supplier. I am assuming google will pay me the funds before i send goods and if there is a dispute then they will charge my account? If someone could just clear that up for me as i am listing electronics such as projectors and car audio which are a couple hundered dollers each and cannot cover the initial costs. Thank you guys Reply
ive recently created my own website to offer websites for customers and after reading all the comments Ive now decided to use Paypals invoicing system to send an email invoice to the customer to make payment and this is all I will do with them. I think when i decide to do DROPSHIPPING now I will only use a MERCHANT company to get receive my payments rather than use Paypal or even EBAY. Although as for my website as Im not selling any goods Paypal presumably will be ok. Ive had similar problems in the passed from others and totally agree with these kinds of issues although not exactly experienced these exact problems. Reply
Listen y'all, it doesn't take a rocket scientist to understand why eBay/Pay Pal is doing this. If Pay Pal holds even a paltry 1,000,000 in sales for 21 days, how much extra interest does eBay/Pay Pal earn? I rest my case! Reply
In response to Mr Ben Wright's comment in august 2010 about his experience with paypal. Nothing can be further from the truth. Let's examnine the evidence, he claims to be the most honest seller on ebay but he was in the business of selling illegal countfeit cell phones! Can we see the irony here? Second, he claim to be a victim of paytpal hold when when he was the one who cannot answer my repeated request for tracking number and i gave him twice the promised time to come up with the phone and it was one excuse after another. His most creative and rediculous one was he did not want to upset the clerk in china for asking her to work too hard to see where the phone is. In the meantime, the phone which was a gift for my wife as xmas gift was no where and apparently my wife's emotional state was not as important as the clerk in china who apparently was so stressed by me asking for a tracking number. His lack of common sense was astounding. Paypal asked for the same info and when he cannot supply a simple thing like a tracking number or proof of delivery to anyone, they charged him back which is how it is suppose to be, in this particular case, paypal worked the way it is suppose to protect buyer from the MOST HONEST COUNTERFEIT SELLER ! His further comment about people who did not agree with him msut be working for ebay or paypal is further evidence of his delussional claims and business ethics. It is funny that all my customer spending huge sums of money buying exotic cars never ahve any issues nor did the hundreds of sellers selling methings from camera to rolex watches also have never had a problem with me paying and finalizing all my transactions in a honest and timely manner. All i can sugest to Mr Wright is seek professional counselling, we are not all out to get you . Also another fiction by him is that there was never a hold, he got the funds and when he cannot proof he did anything, they charged him back.....that is not a hold, that is a simple charge back. Hold is when you never got the funds, which os not what he claims , but then again we are talking to the most honest seller who just happen to be jkicked off ebay and paypal and who also ahppen to be selling illegal counterfeit phones, why would we doubt his words? LMAO Reply
Erika i get the feeling that paypal has paid you to stick up for them! I love the fact that their is protection for the buyer but ebay has that protection already! I am a buyer and a seller! When i paid for an item and never received it EBAY paid me not paypal!!! Paypal is stealing if temporary but they definitely don't have a right to take what is mine for 21 days! It messes with the flow of my business and prevent me from being a drop-shipper! Please don't agree with internet thiefs! A good seller service provide will not only meet the needs of the buyer but also the seller! I wouldn't be suprised if people start suing paypal and they go bankrupt like that other one in 2007! I will be looking for other alternatives to paypal! Reply
you can't just make stuff up! we live in a civilized technology age, we can't return to barbaric ways of bullying sellers by made-up rules that are practical nor sensible! Reply
Very good article, your absolutely right about Pay pal, they really dont want to hold payment as long the supplier can ship and customer can receive and be happy. Thanks http://www.eurostarjewelry.com "Dropship Silver Jewelry, Gemstone and Body Jewelry" Reply
Free Member
I am a new member of SaleHoo. All your comments and ideas are so much helpful for the new starter. I like all the article. I am now planning to start my business on February, anyone who can give me some ideas of reliable merchant account company who is dealing with all the cards and can be is affordable for the new starter? All your recommendation and suggestion will be much appreciated. Thank you.... Reply
Site Admin
Hi twinstar888, Here's a link with useful information regarding merchant accounts http://www.salehoo.com/education/business-setup/how-to-set-up-an-online-store-2 If you need further help, do send us a message at http://www.salehoo.com/support Welcome to SaleHoo! :) Reply
PayPal & eBay. A dream turned into a nightmare. As eBay and PayPal continue to build The Fourth Reich online, If you use it in this day and age, you will regret it; if not now, in time you will. If the DSR's are so darn important, eBay should REQUIRE feedback to be left from purchasers. I, too, was a victim of the drop shipping payment holds. I couldn't order the products for the customer until the funds were released. Because they are an online payment service, and NOT an online payment gateway, they are not required to follow or abide by FDIC banking regulations, so they operate as they please, punishing the little guys and pampering the powersellers and corporate conglomerates. Also, I got an email message saying my account has been frozen until I can provide some more information about one of my sales, and an ID# was provided. I called them on the phone several times about this trying to find out what information from which sale they needed, but they say they don't know what I'm talking about as nothing is showing on their end, but my account has been permanently frozen with almost $100 still there that I cannot access for over six months, but yet I didn't do anything wrong. I asked them why, but they couldn't give me an answer other than it's something the "Back Office Execs" decided on a whim. I asked to speak with one of them, but I got a shocking, "Oh, no, they are unavailable for customer support issues such as this, and am left dealing with someone who just wastes my time by telling me there's nothing they can do about it. If you do use drop shipping services, be very wary, as you could be held accountable for mistakes made by your drop ship suppliers. One guy filed an "item not received" dispute after I provided him with the tracking number and it was showing up as being on its way. Guess what? He received the item, and eBay issued a refund without my knowledge or consent. I got an email saying, "we have refunded the buyer for this dispute and you now owe eBay for the amount refunded". I never got the item back, case was automatically closed, and I still had to pay the final sale value fee. Also, I sold an Autographed Football to a lady that complained, saying it was flat and would not hold air. She sent it back for a full refund, which I was happy to give. When I received the ball back, it was not flat, and holds air just fine. I tried to inform eBay of this and offered to pay the shipping to send the item back as the ball is fine and the lady was not honest about the condition in which she received it, but case closed and refund given, and final sale value fees paid. Bastards. I sold about 200 items last year, and only got feedback for 117, and only two were negative, but it was enough to drop my feedback percentage to about 98.6%, after which eBay and PayPal feel you are not worth their time, and punish you by putting your listings in last place on search results. I went through the same thing with PayPal. I haven't won a dispute yet, even though I provided all the correct documentation, gave refunds to buyers who received the items. Some items were never even sent back to me, and I was still forced to give refunds. So, after a year of dealing with them, and losing money instead of making money, I signed up for Authorize.net because eBay told me that was one of the options available for accepting payments for purchases, but when I tried to link it up to my listings, eBay told me I had to be a Webmaster to do it; either that or sign up for a Payflow account (which is also controlled by PayPal) for an additional $175 setup fee and a monthly fee. Forget it.With all their constant changes in listing restrictions, policy changes, and the latest and greatest "PayPal" takeover, they've made it nearly impossible to sell anything there, when it used to be the place to buy and sell anything. All this combined with a blatant lack of customer support and service, it's no wonder they reported a quarterly loss for the first time since they started operations. They have also lost more than 3 million eBay users. With over 40 million users, this may not seem like much, but most of those were Power Sellers with big time items and stores. I have been in communication with many of them, and they have completely closed their stores, removed their items, and closed their accounts due to the constant increases in fees, policy changes, and lack of technical support. I am starting to see a lot of them at www.bonanza.com, of which I am also a member, but the newest, latest, and greatest site I have found is www.addoway.com. Find me there at this web address: www.addoway.com/tuckerstuff. It is what eBay used to be and has made buying and selling online fun again. It is the friendliest community of buyers and sellers that I have yet to find anywhere online. They have a Facebook Meet n Greet Fan Page where you can post your store links, Twitter profile link, and they are more than happy to share and Tweet your listings for you. Any technical questions I posted there have been answered sometimes within 5 minutes after posting. Compared to eBay, it is a joy and a pleasure to post a question and get a kind, friendly answer without sorting through 50 pages of "Help" menus and "FAQ" pages only to discover there is no answer for your question. It is amazing and impressive, with one page user-friendly listing creation, free to list, free if it sells! If Addoway keeps going like this, eBay may have to rethink it's strategies. In a desperate attempt to get people back, they are now offering up to 50 "Free to list Auction Style" listings every month, but you still have to pay the final sale transaction fee of 10%. With the PayPal takeover, though, this has made it impossible for me personally. I hate PayPal and their restrictions, as well, and I have my own Shopping Cart service to process credit cards online, but eBay says I have to be a Webmaster in order to link it up to my listings. Either that, or sign up for a PayFlow account, which is and affiliation of PayPal, with a $175 setup fee and another monthly charge on top of that. Forget you, eBay, there's some new players in town, and they are better than ever as more and more people start realizing that eBay is no longer number 1, and is falling fast. I just hope I am around to see them totally collapse. They've made it impossible for the small time sellers, and is more of a Corporate Conglomerate nowadays more than anything. Online sellers unite! Bonanza.com and Addoway.com are the next rising stars in online selling, so join today and enjoy hassle and headache free listing, buying, and selling. www.bonanza.com/booths/tuckerstuff www.addoway.com/tuckerstuff www.tuckerstuff.ecrater.com My shops are the one-stop shop for all your Hawaiian and tropical needs, from quality Hawaiian print clothing for men, women, and adorable baby girls Hawaiian Capri sets, Hawaiian Essential Oils, Bath, Body, and Beauty products, Tropical Themed Restaurant&Tiki; Bar Supplies, Hawaiian Fabric in Cotton or Rayon available in 5 Yard cuts, Kahala Brand Shorts, Shakabera, Shakatime Hawaii, Maui Diver's Jewelry, and other major Hawaiian brands are now being featured. A combination of Novelty collectibles, household items, and quality merchandise. Open your own store today, and import all your listings and feedback with the "one-click" importer link at both Addoway and Bonanza. They both allow you to accept multiple forms of payment, from checks, money orders, and cashiers checks, to PayPal and Google Checkout, and you don't have to be a webmaster to do it! Sign up today and you will be glad you did. They do not get the net traffic that eBay does, so items may move a little slower, but I think that will change over time as more and more people realize what a "screw job" eBay has become and continue to search for alternatives. You can't get much better than either of these two sites. I love them both and am happy to be a member in the friendliest communities of buyers and sellers on the net. If you don't believe it, just try it and see for yourself. You will not be disappointed. Reply
Free Member
I sell on Bonanza, just started. Paypal is my form of payment so this is really bad news for me. I can't believe they hold payments. What other payment options are there? Reply
Site Admin
@sandysbargain: They accept Google Checkout and Money Order - http://www.bonanza.com/site_help/booths_setup Reply
Full Member
EBay and Paypal don't want small sellers on eBay. And if you are going to sell on eBay they are going to make it a steep learning curve. Donahue stated at one point that eBay looked like a big garage sale. EBay wants to become Amazon. If you're going to sell on eBay be prepared to except a harsh environment with varying rules and policies. EBay is a giant arbitrary corporation with different rules for different sellers based on ones size, money and their ever changing whims. The key is to not invest a lot in them. Only use them to sell things to make a quick buck with as little time and effort as possible because for every hour you put into their platform, a simple click from some moron CS person can end your selling on eBay. It's a jungle. Reply
Very Frustraing when the parent company ( eBay) allows one thing (dropshipping or pre-sale orders) on their website but thier child-subsidiary (Paypal) does not allow such activity. So you have one issue that will bring huge profits for a business but also may wreck that same business when a company holds your money up to 21 day(s) and have no way to pay for the item to ship it and your customer is breathing down you neck for the item that they ordered. What does a person do when first starting out in a high profit category and keeping their carry cost down to offer the best price the right hand says you can do one thing but going to be punished later on when a company decides to suspend your account and hold it longer than 21 days that ends up to 180 day(s)\6 mos. Either eBay eliminates the allowance of drop shipping or tell paypal to accept the practice. Another thing, when Paypal requests information, like name of suppliers like I did in my case ( name, address, phone numbers, etc.) and they come back verified, they need to accept such information and release the funds. Be a different story if I did not provide the info. and\or could not be verified and I just ran but did the right thing and gave my sources but still got punished and they still closed my account. Reply
I never was a seller and never will be one in view of all the complexity of the accounting necessary, and what I read here is an additional desincentive. As to regards the holding of funds I noticed the following: whenever I would transfer funds from my bank account to Paypal, it would take 5 to 7 days for my funds to be entered ito my Paypal account and thus be available to me. Yet, whenever I had run out of funds in my Paypal reserve and would pay for a purchase, via Paypal, directly from my bank account, that payment was done instantly to the buyer. I figured that any money I was transferring from my bank account to Paypal was held for Paypal's benefit (they make interest on it). I have decided not to replenish my Paypal account any more and simply use then to pay directly from my Bank account. I believe all this holding of funds is a way to make interest out of the "frozen" or "highjacked" millions of dollars due to sellers and buyers who wish to refill their account, it's like an invisible fee or tax. I use their services but I do not trust them an inch. And, Oh, all the shill bidding which is going on in the last hour or so of auctions! I have also found other auctions which I use as much as possible. Reply
Hey does anyone know what I can do to get my payment hold released? I've looked everywhere. I haven't sold anything in ages and have nothing pending. I literally transferred some money into PayPal from my bank account so I could buy something off of eBay and now there is a hold and I can't get it anymore. It's because of this crap that I refuse to use eBay and PayPal anymore but I found something I really wanted a good deal on and thought I'd make an exception. Bad idea. Do I just have to wait it out.??? Thanks, I'd appreciate any feedback. Reply
I have a 100% rating on eBay and always paid my bills on time via Paypal. Yet I got a notice that they were going to put a hold on my payments. Payments for what? Haven't used it for a while and anyway the last ones I tried to sell didn't sell. Very confused. Reply
Site Admin
@Manny: Just confirm with eBay if the messages were for you and request for more information. :) Reply
eBay even has a moderator who reads our post and determines weather to allow it to be viewed or not ? TOTAL CONTROL.....Have you ever talked to eBay`s rep`s ? It is like talking to a mindless robot who only say`s what they are programmed ( they are all stepford ) .....It is useless ...I can not believe what they are getting away with and no one is challenging them legally ? Reply
Here is another issue with both companies, if eBay belongs to PayPal, why the double charging? I hope a huge court case will be brought against this company to teach them a lesson. It just shows you don't need weapons to be a robber or a thief, this is robbery of the highest but unsophisticated kind. I made a sale for 159 pounds, ebay charged me 16 pounds for final value fee, not to mention 3 pounds or so for the initial listing and when the buyer made a payment va paypal and the funds dropped into paypal about 9 pounds was missing but yet the funds was on hold till the buyer left feedback but to add more insult when I made a payment once the funds cleared to another paypal account another few pounds went missing... thiefs I really cant wait to see a damaging court case against them. Reply
This is funny... this is my opinion, like it or don't like it - I still need to say it. eBay and PayPal deals with money whether seller or buyer; sending or receiving money... so don't be lazy and allow yourself to be ignorant to what's going on. If your money matters so much to you, then why leave it in the hands of someone/something without knowing what will happen to it? Ignorance is not always bliss - take the time to protect yourself by knowing how this people work with your money. It will not do you any harm to do so, in fact allow you to know how to use it to your advantage. Doesn't matter if its online or going to an actual store. So if you go into something that involves YOUR money and YOUR livelihood, without knowing how it works then for sure you are going to be screwed over - whether by a big company or small time con-artists on the net. Let's face it, there are real risks when trading and if you don't protect yourself - how can you expect others to protect you? @Vaison-la-romaine - when you add funds from your bank it will take time to clear but there is a payment method on PP where (if you have bank and credit or debit card on there) they will pay for you so the seller gets the money right away but the time it takes to clear from your bank is still the same. Comes in handy for me when I wanna buy something and its still a day or two away from pay day. Reply
Paypal holds are a pain, but you must prepare for them as they are not going to get any better. In fact, with increased risk in world markets, I expect them to push for 10% on every account and maybe try and hold certain payments for 30 days. Reply
I don't sell on eBay, and my payments are for services but PayPal still holds my payments and I'm stuck waiting 21 days because I can't provide tracking on a service. When I called Paypal my only option was to have my customers send an email to Paypal saying they are satisfied then wait 3 days. LOL I am NOT asking my customers to do that. Paypal is ridiculous and once I get my payments all cleared I'm closing my account and sticking with Google Checkout only. Reply
It's true what darklordau said. Has any one heard of of the hacking term man in the middle? Well that's what PayPal and eBay are doing and making a lot of money all at our expense. Would love to join up with a couple of you to do a better company. Reply
I like how the author makes it appear that the 21 day hold is a minor inconvenience and is easy to work around and get funds released. I have sold on eBay since 2000 and have never had a single negative or neutral. My DSRs are 5, 5, 4.9, 4.9 and I would be considered a Top Rated Seller but I usually sell around 50-75 items every 12 months so I don't meet the 100 sales requirement. I recently lost my job so I have to rely on online selling to pay the bills and to put food on the table. About a year ago my account got hit with the payment holds policy. I was told that I sold a high risk item because I sold a brand new sealed smartphone and the buyer quickly left a glowing feedback stating how fast I shipped and the item quality was outstanding. Just b/c I sold a phone my funds have been held for over a year now. Ebay/Paypal do nothing but lie and the author of this articles comments are incorrect. PayPal says a seller can use the money paid for shipping to ship the item if the seller purchases shipping via eBay or PayPal's shipping center. False. Your purchase will fail. They also state if you pay for shipping with your own personal funds and upload tracking info the shipping cost will be release shortly. Once again, false. I pay out of pocket w/ my PayPal funds from previous sales and if I'm lucky the shipping cost will be released in a few days. Also it says when a buyer leaves positive feedback the funds will be immediately release. False. It always takes a few days if you don't call PayPal and wait for a live person, then more waiting as you get transferred to someone who can release it. This person usually takes their time also b/c they have to look up the fb and verify you are telling the truth. Another lie is the statement about funds being released 3 days after proof that the item has been delivered. They will not release the money until about 5 days have passed unless you call again and wait some more. I do not see how anyone could use drop shipping unless they have plenty of money. Many of the smaller sellers like myself have to put forth huge amounts of effort to satisfy buyers, eBay, PayPal because we simply don't have the funds to pay for shipping. I like many sellers list around 10-20 items per listing session which I do once or twice a week. If ten items sale and the average cost to ship an item is $10 then I have to come up with $100 to ship the items. So not only are the buyers payment held our own personal money is being hijacked also. I'm sure PayPal makes tens of thousands of dollars a day in interest on "held funds" but they surely don't pay seller interest. At least this is my current experience. I used to love eBay back when you paid 35 cent to list items and paid small fees when sold. Now eBay takes around 10% and hassles sellers even worse. It also seems that they treat different sellers differently. I've read where some sellers only have their funds held on "high risk" item but their regular items are not held. eBay and PayPal are about as crooked as any company I have ever came across. If you don't believe eBay is allowing crimes to be committed here is an example: According to eBay policy these items are prohibited: Satellite and Cable TV descramblers: Items that can only be used to access cable or satellite television programming without the permission of satellite or cable operators aren't allowed. Stating the item is for educational or testing purposes does not make it acceptable to list. Examples of items that aren't allowed include: Smart Card programmers and unloopers Programmed Smart Cards Blocker devices Hardware or software DSS emulators If that is they case why is this seller allowed to sell high pass filters that block outbound Pay Per View data that the cable company uses to identify who ordered what and charge them for it? Clearly this is illegal and they seller even has and animated gif showing that is "zaps" outbound billing information so you get free Pay Per View. I know the seller was reported months ago and has sold hundreds since then. I decided to buy one to get the seller's name and found out they work for eBay. I've also seen a friend who created a t-shirt and began selling it after trademarking the image and saying on the shirt. After my friend complained that other sellers began selling shirts with the exact same image and statement on them my friend filed a trademark infringement against the sellers and provided ebay with trademark documentation and ebay quickly went to work. Unfortunately ebay's work was that they terminated my friends account and allowed the other sellers to continue selling the shirts. That was 5 years ago and they are still selling them. Before my friend passed away he bought one of the shirts after I advised him to so that he could get the seller's information and once again the name of the seller which was a very uncommon name was proven to be the same name as an eBay employee. Bottom line: eBay is crooked as can be and if you ever come up with a great idea or invention do not post it on eBay or eBay will steal it and make thousands if not millions from your hard work. Reply
Free Member
Agreed. They are crooked bastards. Reply
Sold my first item on e-bay after waiting 5 days. The buyer paid instantly and the money is being held by PayPal. I hope the buyer is a genuine one and doesn't mess me around and cause further problems? Soon as I receive payment from PayPal, I am closing my e-bay account & the PayPal one too - Your lose eBay & PayPal. * I think all the clear conscience individuals should do the same, these corporate entities have been clearing us out for years - stand up for consumers rights Reply
Love this: "When you really think about it, any seller who is honest and deals fairly with his buyers should have no problem with PayPal payment holds." How about the shipping fee hold? I have a major problem with paying $11-15 per shipment out of my pocket, eBay and PayPal should not be allowed to hold the shipping fees. Or at the very least, all shipping fees should be released for each item, once a tracking number is uploaded. Free up those funds, so sellers can keep items shipping out! Reply
This payment hold is crap. All they are doing is making more money for themselves by investing YOUR money over 21 days to get MORE interest. This is bordering on illegal I'm sure, I bet they take their cut immediately! This has to stop. Reply
Positive feedback no longer works, had a buyer leave positive feedback, thanking me about how fast the item arrived, and just got off the phone will PayPal to have them tell me "feedback is not enough to insure buyer happy", I have to wait another WEEK. This is why I vote democrat, this is what businesses do when they're not regulated. PayPal needs to be regulated as the bank that it is IMMEDIATELY. Until then, I am switching to Amazon. Reply
Is this payment hold via paypal for US sellers only?. I am an ebay seller in Australia and the only time i have had fund frozen was when a few lunies lodged disputes for items they were not happy with, only funds for that transaction were frozen not my whole account Reply
When ebay was causing me to lose thousands in orders, by holding my customer's payments, I simply kept refunding every customer payment that was being held. Ebay even allowed a customer to keep a $450 mobile phone that I accepted a return for a refund on, but I never got the phone though the customer was refunded. So near the end of my relationship with the ebay, I received an order for 5 phones totaling around $1,300, it was a dropship order, but I learned my supplier was out of stock, after saying they had the phones. I offered the customer a refund, but had to wait for my China supplier to refund me the money I sent, but the customer was inpatient and filed a complaint with ebay; so ebay refunded the customer the money and expected me to repay them once my supplier refunded me; I'll let you guess how that turned out, after being cheated by ebay, on many occasions before this took place. And my supplier did refund me the money. Reply
I just say "Royal Carriage" from back in 2010. What I sold is exactly what he wanted, asked for, and received. All in the process or using ebay and paypal to get it for nothing. As far as "illegal" phones are concerned, ebay allowed me to sell them so I did. I never claim them to be real; in fact, I stated they were replicas of originals in my listings, and if anyone want proof as how much of shyster this used car sales man is, I still have all the emails he sent stating how he would sabotage my ebay account if he doesn't get his way with a refund. Like I said in another comment, 3 years ago, I kept them, just in case. And I did give him a tracking number, and I still have proof of that also. The man was simply very inpatient., used to having his way, when and how he want it. In other words, an ebay 1%'er Reply
Well, I am about to launch my new site but I am starting off as a reseller using dropshipping services.These comments are an excellent eye opener.
Paypal can actually ruin your business and not have any repercussions.I think I will even skip eBay altogether and concentrate on my own website. And I want to choose a new payment gateway. Some say Google Wallet
but I need one that is compatible with WordPress Woocommerce sites.
Any suggestion my fellow entrepreneurs? Prevention is always better than cure.

I do not need this Paypal headache. Reply
As soon as someone comes up with an alternative to the Shylocks of eBay/Paypal I'll the first to switch over. They have just SO lost why people started using them in the first place. If I want Amazon - I'll go to Amazon - eBay.

The 21 day hold with the argument of make buyers happy isn't a very soåid one after I've gotten positive feed-back and the funds are still on hold.

And to Erice, who wrote the original article¨: You need to get off that Corporate-stooge-juice, and start to think for Yourself - All it takes for evil to win, is for good people to do nothing! Reply
My Paypal nightmare continues along with many other sellers who sell virtual goods. Outright fraudulent buyers are reversing transactions and Paypal takes it out on the sellers. There also are many hacked Paypal accounts where the funds are used to buy virtual goods (which can't bet traced) rather than just sending money to different Paypal accounts which eventually can be linked to a bank account or credit card.

So many small businesses and sellers are getting screwed. I suffered a 4 digit loss last month. There are ways to limit your risk but the bottom line is if you deal with ebay/paypal you are going to get SCREWED when the buyer disputes a charge with Paypal or the bank. You can't even leave negative feedback for a buyer anymore, just "report the buyer" which does nothing, and it's a nightmare to just recover your seller fees from ebay for a fraudulent Paypal transaction.

Paypal seller protection is only for shipped goods and it only works SOMETIMES not guaranteed 100% like is portrayed. If you deal in virtual goods, even if you physically ship the redemption codes or whatever it is to access the virtual goods, Paypal seller protection will not protect you.

It's a nightmare. Virtual goods are everywhere now and ebay/Paypal is your enemy if you deal in virtual goods. Reply
Paypal ( Ebay ) are a morally & Ethically bankrupt entity, they posses no moral standards. Holding funds for 21 day's from peoples accounts, and operating as a non licensed Bank,could be deemed illegal. You will note, when these characters, freeze your funds, they will have already deducted there fees from these amounts. Who get's the interest earned from these 21 day money seizure's, you don't have to be a chicago lawyer to work that out. Paypal's parent company, Ebay hides over in Switzerland to avoid taxes and contributes nothing to America, or at best very little. Any Mafia would be proud of this lot. Reply
I am surprised they are allowed to collect funds purported to be for the USPS, and then 1) Be the FIRST RETAILER ALLOWED to profit from postal revenues by charging seller fees to them, and 2) KEEP MONEY paid for postage, not even allowing the funds to be used to print said postage label. If this weren't bad enough, they are getting over $28 dollars in fees on an item that sold for $208. and mandating that I pay THIS TOO from my PERSONAL credit card or bank account, not even releasing enough funds from the sale to cover their seller fees. Planning to sell off all of my collectables and bail. Tired of being bullied. Reply
Free Member
PayPool and Ebastards are criminals! Reply
TWO things eBay/Paypal are doing, appear illegal, or at least "highly immoral". They are making a profit from funds sent to the USPS, and then HOLDING THE FUNDS and NOT RELEASING THEM FOR THE PURCHASE of said postage! I'm no lawyer, but this stinks to high heaven! Reply
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