PayPal - Is it safe or dangerous?

Hello Community,

Came across a review from wholesaler who claims that PayPal is potentially dangerous - i.e. they have more control over our money than we have.

Wholesaler recommended using Merchant Account instead of PayPal as we would have more control over finances with Main Account. They had posted reviews of other disgruntled PayPal users who got into sticky situations with PayPal and had their accounts frozen until PayPal sorted matters out. Another gripe is that they are difficult to reach either by email or phone.

Does anyone agree or disagree. Are we treading on dangerous ground using PayPal? Is it waiting to happen to us as some of ex-PayPal users claim?

Thanks for listening. Looking forward to your replies as I use PayPal to buy and sell.

What you heard is 100% correct. PayPal really does stink! Not only will they suspend your account for whatever reason they choose they will freeze your money for weeks or months on end & really make your buyers angry. I am dealing with an issue right now with them & have been shipping my sold items with my own personal finances to avoid negative feedback on eBay. I definitely recommend using a merchant account & as soon as my issue clears up I am taking all of my money out of PayPal & closing my account.

Thanks for your reply. Can you recommend any Merchant accounts that are affordable?

Sorry but off the top of my head I cannot.

I hear all of these stories but I honestly have to say I have never had a problem with PayPal. I am a Powerseller on eBay, I have a online store, and I accept payments thru them on my wholesale site. I have been using them almost 5 years now and not one problem.

Well that's good for you. You're one of the lucky ones :)

Hi it sounds like if you sell high end items with big ticket prices they get suspicious and want to make sure that the items are being sent and that you are not just scamming. Plus if I read it right they are the ones that have to arbitrate if a claim is put against you and they don't want to potentially loose hundreds or thousands of dollars that they already have invested or profited from your sale. So they freeze the money till you provide confirmation of delivery. My problem is the same one that I have had with AMAZON.com. Which is also why I don't sell with them anymore. They hold the money and if you are a drop shipper you need the money to pay for that big ticket item from your drops-hipper. If you don't have that kind of overhead or if you don't have it personally you are screwed. They have this 'policy' that they don't charge the customers credit card until you provide proof of delivery. Which I think is great protection for the consumer. But when your a drop shipper it doesn't work. They almost make it a bad thing to be a drop shipper. Like your not wanted in the 'BIG MANS WORLD'. I feel all your pain. But I have a feeling that we are all pawns in a society of bad business minded people that are out to steal a buck when they can. Thanks Mr Bush for a recession.

Its very dangerous, its like sending money to a scammer via western union. If you send money to customer, with tracking#, few month later they can file cokplaint the never got it or not as described, then they can do chargeback. their goes merchandise and your money.

In my option , paypal 99% safe for me , 1% dangerous . we have used paypal for several years . we get payment by paypal around 5,000,000 every year .

It's true that , more and more buyer & seller use paypal

I have been using Paypal for 10 years now, and have never had a problem. However I have heard of many terrible stories, For a while I stop using Paypal on my ecrater store & my sales dropped big time. So I guess its a necessary evil

My 2 cents
John (aka bacpro)

Hello everyone.
I recently started the business of dropshipping and I met with these horror stories about paypal. We have many detractors and less on favor.
Regardless of these details, there is another thing that I think are overlooked and that only one person I have read that mention it. There are on the network, several payment gateways that are not deposited the money from sales made until the customer has received his isue, the way he wanted. Those who use the dropshipping this detail does not make us the least funny. Maybe, just maybe, if I have an "extra" way to finance purchase of my client and send him, cool for me, otherwise ....
An example of this behavior is 2checkout.com. I'm not going to dictate their policies, but they put us in a bind. Clickbank only deals in digital items. Does us no good. Moneybookers can ask each x time a "security deposit" to cover any financial eventuality against you. -I read about the enormous political-and there are more services that just do not convince me.
Anyone have a better idea or know of a less restrictive service to those who like me use dropshipping?
Greetings.

If you sell replicas, it is not so safe. To buy things is much safer i think. You can ask the sellers almost full refund before delivery.

Hello everyone.
I recently started the business of dropshipping and I met with these horror stories about paypal. We have many detractors and less on favor.
Regardless of these details, there is another thing that I think are overlooked and that only one person I have read that mention it. There are on the network, several payment gateways that are not deposited the money from sales made until the customer has received his isue, the way he wanted. Those who use the dropshipping this detail does not make us the least funny. Maybe, just maybe, if I have an "extra" way to finance purchase of my client and send him, cool for me, otherwise ....
An example of this behavior is 2checkout.com. I'm not going to dictate their policies, but they put us in a bind. Clickbank only deals in digital items. Does us no good. Moneybookers can ask each x time a "security deposit" to cover any financial eventuality against you. -I read about the enormous political-and there are more services that just do not convince me.
Anyone have a better idea or know of a less restrictive service to those who like me use dropshipping?
Greetings.

Hi Hector,

There are other relatively safe and good alternatives to PayPal like ProPay, MoneyBookers, Paymate and of course 3rd party credit card payment processors. To learn more about these please click on the link below -

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But like bacpro pointed out many customers still prefer (or feel safer) to pay via PayPal. Offering PayPal along with another option or 2 may be good for business :)

All the best!

It is definitely Dangerous as i have just found out :(

I started my drop shipping business around 4-5 months ago, im selling electronics and everything was going very well until recently, I've had my ebay and paypal accounts since 2002 and my paypal account was limited on Tuesday 9th, see the screenshot of my account limits below:

When it first happened on Tuesday, i uploaded all the docs required straight away and then called them and they said it would be sorted in 24-48 hours, so i just left all my products up for sale and just thought i could cope with some orders being slow and then the next day its still limited and now today its still limited and now there are 150 orders are on hold with 15 grand in the account.

I have called them again today and now they say it could take anywhere between today and 5 days time, ive called them about 10 times now and they seem to keep giving me the same generic answers and say i have just got to wait for an email from them and i can do nothing more apart from wait, im nearly pulling my hair out now.

Basically if they fix it today or tomorrow i could probably still manage and maybe get 1 or 2 bad feedback or disputes but if it goes on another 5 days im absolutely screwed and it is going to be another one of those paypal horror stories, i cant pay my suppliers, i cant refund customers, i cant do anything.

Anyway fingers and toes crossed they sort it out quickly.

I'll let you know what happens............................ Stirfry :(

Sorry to hear about the drama Stirfry, but your certainly not alone there. The good old fashioned PayPal freeze has brought many a seller to their knees in the past, and will no doubt do so in the future.

You're kind of stuck in the middle of the tunnel now, nothing you can do until PayPal decide to send the cleaner to unblock it, and I've seen that take some time in the past.

Fingers crossed for you mate, but for those that are just starting out, take a good read of this because it is something that PayPal can do, and as many believe, it's not limited to just new accounts and it can seriously hurt those operating on ,ow or no cash flow purchasing.

My best possible tip, be proactive with PayPal. Quite some time ago I got a little serious with one of my eBay accounts and was starting to push a lot of cash through PayPal from that account. I was expecting to have issues as for the past few years previously it had only been serving as a part time account and had been generating a low volume of cash, so I knew some alarm bells may well start to ring at PayPal.

I made a point to contact them directly to discuss what I had planned to do with this particular account and gave them a brief cash flow break down as to what I was anticipating. I found them extremely helpful, was given someone to deal with me specifically and after confirming a few minor details I was assured there would be no dramas, and there never were.

I guess I would put it under the heading of business foresight. Try and look as far forward in your business as you possibly can and identify possible issues like this that may well lay ahead for you. Once you're aware of these things don't wait for them to bite you on the rear end, get proactive and smooth out the road ahead so as to avoid as much drama as you possibly can.

I keep getting back to developing a business plan from day one. I know most sellers think why on earth do I need a business plan to sell on eBay, and here is one pretty darn good reason.

The real beauty of this forum is that so many of us can learn from others misfortune, and no matter how long you've been in business you can learn something everyday if you walk around with your eyes open

Again, good luck with it Stirfry, lets just hope your valuable post can save some others from the same drama in the future mate.

: )

Well is Tuesday 16th now and its still in exactly the same position :(

Yeah, that completely sux, although where PayPal is involved the news is usually always bad. They tend to moddle along at their own pace so not much you can do other than sit it out at this point, mind you if it were me they would be getting a daily phone call to make sure the situation it was on their radar.

@stirfry: I was a bit shock reading your post, it was just recently that I visited your store and gave you a few compliments.. I'm sure like myself and most of your customers you didn't see this coming.. Hope everything turns out okay. This might help -

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@Marc: Great tip and even better foresight! :)

My best possible tip, be proactive with PayPal. Quite some time ago I got a little serious with one of my eBay accounts and was starting to push a lot of cash through PayPal from that account. I was expecting to have issues as for the past few years previously it had only been serving as a part time account and had been generating a low volume of cash, so I knew some alarm bells may well start to ring at PayPal.

I made a point to contact them directly to discuss what I had planned to do with this particular account and gave them a brief cash flow break down as to what I was anticipating. I found them extremely helpful, was given someone to deal with me specifically and after confirming a few minor details I was assured there would be no dramas, and there never were.

Stirfry's story is scary to say the least!
I use Paypal and thankfully haven't experienced this 'freeze' yet! Hopefully I won't.
I do like that they seem to be quite reliable and as a customer I feel quite protected when dealing with suppliers as it's easy to open a dispute if I need to - I also think that they focus on customers rather than suppliers in a dispute.
Good luck!