PayPal Sucks

[e d o]

I used to think PayPal was great until about two weeks ago. If you use it to only pay for things then it probably is great BUT the first time you sell something and mail the item after the funds show up in your account and they burn you with a hold or reversal, you will have to deal with their incredible ineptness. Frustration will ensue as you waste hours dealing with them and still remain in the dark. You will get different stories depending on who you talk to and in the end you will probably loose your money. Your opinion, like mine, will change. I no longer take PayPal payments because PayPal sucks.

[Al From Maine]

Sheesh -- don't sugar coat your feelings for us.... ;-)

Al

[Walravine]

As a merchant processor and bank, Paypal's fees can be high. I've never been confronted with a chargeback but I can well imagine your difficulties.

[Johnnya475]

From one of my OTHER favorite sites:

http://consumerist.com/361642/what-can-you-do-if-paypal-holds-your-funds-for-21-days-gamble-with-it-in-their-money-market-fund

[castlecraver]

Edo... what are the circumstances of the chargeback? I'd be kind of interested to hear, as I've been reading about a lot of "item not as described" disputes/scams that fall through a loophole in the seller protection policy.

I know it doesn't help you any, but this is why I don't take electronic funds for anything I'm not willing to eat the cost of if it comes back to burn me. These stories abound, unfortunately.

[Hendu3270]

Use a stipulation that funds must clear prior to shipping. Only way around that hassle I think.

[letterk]

I've been using PayPal for many many years, and thousands of tranasctions later, I have yet to loose any money that was PayPal's fault, and that includes a few holds and reversals. The few times that has happened, they caught them before I even had a chance to ship (like within 30 minutes).

That said, PayPal is not the only place you'll have to deal with these problems. Merchant accounts get chargebacks, Postal money orders can be fraudulant, etc...

[riooso]

I hate Pay Pal because they hide the payment source button. I don't like it taking funds from my bank account yet them make you jump through hoops every time you want to pay with the credit card. Never mind they have the ability to save the settings and then they lecture about why you should use your bank account. They do suck and I would like to find an alternative way to pay someone.

Thanks,
Richard

[Randy]

The down side of not using them is that many buyers will not bid on your items. I've a friend who tried to stop using that payment type once on his auctions and he found that his final prices dropped by about %35-40 on average over what he had been getting when he took paypal...

- R

[stevensj2]

I closed my account two years ago, and will never use PayPal in the future.

I'll try to make a long story short, but here is the basics:

I am a computer science student, very paranoid of security, and only access sales and things like PayPal while at my home computer - which is always virus free, with the tightest firewalls ( Linux FTW).

Did I say I was paranoid? I meant it. My passwords are ridiculous, I never share my information, I do not go to mysterious websites or open unknown emails, etc.

So you can see why I was very surprised when I noticed my bank account was -$1350 in the hole, with all funds being pulled directly from PayPal.

Being as responsible as anyone else in this situation, I promptly logged to freeze my PayPal account. But I couldn't. PayPal would not let me stop further transactions, change my password, remove my account #'s, or make any changes to my account. Calling them on the phone lead to further frustration as they basically said "Yes, a lot of money was pulled from your account, but we have no reason to believe it was theft or mischievous. " Even after their computer specialists were able to see that my IP address, or any in my state, had not been making these transactions, they refused to help.

My PayPal details even showed the shipping information (name only) of the person who was having items shipped to them (in an entirely different state). Yet PayPal said they could not prosecute because they have no reason to believe it isn't me.

It took 2 weeks on the phone with PayPal to get my account frozen, with an average of $400 dollars being spent from it per day. That's money that my account didn't even have, and money PayPal was asking me to pay back.

I had my bank account shut down immediately when I noticed the money missing, so no more of my actual money was gone. But PayPal still let someone spend money that was neither in my PayPal account or being pulled from my bank account.

It took the fraud prevention staff from my bank threatening PayPal before any action was done on their side. It was literally months before PayPal admitted it was theft, and allowed me to close my account.

In the end, all my money was reimbursed, but it was the most ridiculous experience I've ever had with this kind of thing.

PayPal is not safe, and no matter what you do, your money CAN be stolen. Easily. And when it does, YOU get treated like the criminal and they refuse to assist you.

I know most do have fairly OK experiences with them, but I just don't feel the risk is worth it.

[ScottS]

I opened a small bank account for only Paypal transactions. I think you have to be a little nuts to just give paypal what amounts to a limited power of attorney over your real bank account.

[Must Dash]

My only experience with them is as a buyer. I'm thoroughly unimpressed - but at times I have use them to make a purchase if the seller doesn't offer an alternative.

Their automated responses are mind-numbingly moronic and some of their processes are frustratingly inane. I'm agog at the sheer crap that they dish out. As for their parent company, e-bay, even if I was down to my last puck of soap or blade, I wouldn't use them.

Cheers

Jeremy

[jellywerker]

I dislike them, but continue to use them due to lack of any widespread alternatives. Hopefully google's payment form will catch up soon. They cost me $150+ in overdraft fees since I started my account, and refuse to do anything about them. I had to cover them out of my own pocket.

[Sabledog]

I opened a small bank account for only Paypal transactions. I think you have to be a little nuts to just give paypal what amounts to a limited power of attorney over your real bank account.

That's a great idea! I wish I thought of that a very long time ago!

I've never had issues with them other than high fees, but have always been concerned about leaving money in the account--didn't think about the bank account part :blushing:

[New2DEShaving_Montreal]

Don't even get me started with PayPal monopolizing this way of payment. I just saw that my bank now accepts INTERAC ONLINE (it's like paying at a store with your bank debit, but online) Yes I know I'm behind on all this. But I agree.

PAYPAL DISGUSTS ME.

As a buyer, I have recieved 2 refunds for whatever reason Paypal refused to put it back in the bank as fast as they took it out! They put a "HOLD" on it. Do you guys know what this "HOLD" is? If you logically think about it, shouldn't they put the money back in ASAP? But no, Companies always CHARGE the account right away, to get money right away, but putting it back will always take longer. Or atleast that's what they tell you. While your money is on "HOLD" floating around, they, the bank/paypal etc, use that window of time as an opportunity to take those floating funds and INVEST THEM to make 10 times what it is.

If they HOLD our money, shouldn't they pay it back with INTEREST? We live in a DIRTY World.
The only thing we can do is make B&B a good and safe place to be. It's the best internet hangout I've ever been a part of. :)

[New2DEShaving_Montreal]

Forgot to add

And thought it should be on it's own post.

Anyone seen PayPal's exchange rates? And FEES to top it off??? HOLY MOLY.

They top even the highest form of legal-crookery of the top 3 banks of Canada. They are Crooks Supreme. And it's funny how stealing is perceived in our society.

[letterk]

For what it's worth, the "hold" they have in place is partly due to fraud prevention, and partly the time for the transfer. It's not immediate, and that's NOT a paypal issue.

[e d o]

Pat,

The circumstances of the chargeback have nothing to do with a complaint on the buyers side. There was none. The item, a laptop computer (sale price $529), was as described and the buyer received it just fine. PayPal suspected something fraudulent in the authorization of the transfer yet they won't divulge any details. They site privacy BS and yet they take no responsibility for telling me the funds were there initially. There is a clear problem with them vetting people that use their service. Like I said earlier if you just buy stuff you've probably not had a problem. It's selling where things can get dodgy especially with more expensive items. They have a seller protection scheme but it's pretty lame. To qualify items must be shipped to a confirmed address and if the value is $200+ it must be shipped with delivery confirmation. The slightest variation and your not covered. Yet anybody with an account can buy your stuff and send payment which can be pulled by PayPal up to 180 days. So if you accept PayPal payments the chances are pretty good that you eventually get burned. How do you avoid it?
1. Don't ship to an unconfirmed address.
2. Don't sell to anyone on eBay with no/excessive negative feedback (void and block their bids).
3. Don't sell outside the U.S. & Canada.

This is really all about big ticket items on eBay and not $10 razors on B&B (we're all outstanding, honest chaps with fine taste right)

[sphughes]

Here are a couple of links to more PayPal shenanigans that occur daily.

http://www.aboutpaypal.org/

http://www.paypalwarning.com/

Like most I use them when necessary but I cannot fathom why I have not isolated them from my main bank account. Time and time again I plan to set up the dedicated account with a small balance for exclusive Paypal but I still have not done it. I have read many times that they are not accountable to banking laws and regulations and essentially they write the rules they follow...

-Scott

[New2DEShaving_Montreal]

Ok Sir, if this 'hold' is about fraud prevention, why is there no 'hold' when they take the money OUT of the bank? I am sure you may know better but it still makes no sense. Putting the money back in the account it came from, why should there be a hold for it? If someone takes your money, sends it back, how is that fraud prevention? LOL.

[Mejnoon]

I've heard many stories of paypal freezing accounts due to disputes, and ultimately keeping the balance (due to a loophole in their TOS). For this reason I am careful to never leave a balance (I transfer funds to my bank account as soon as they're received).

That story about the fraudulent charges scares me though. I think if that happened to me, and the amount was within the limits, I'd hit paypal with a small claims action.

[miza_b]

I don't even know where to begin with paypal. We have been burned multiple times, but never from a charge back. We have had hundreds of dollars frozen for BS reasons. We had $300 locked for 3 months because my wife sold a bunch of her baby carriers and we moved too much money through paypal. They told us that if we upgraded to a business account, we could have access to the money, otherwise we would have to wait for 90 days. Before that, my wife tried to buy something with the money in paypal, but the withdrew it from our checking account instead.

Oh, and paypal is not a bank and is not backed by the FDIC, so they can pretty much do whatever they want.

[Lionhearted]

I've used PayPal for more than seven years with over 3,000 transactions the vast majority as a seller. I've never had a single problem. I was involved in two disputes with sellers (non-delivery and item not as described) and both times my money was refunded. Most items I sold were well over $300. For some years I sold new high end cell phones, PDAs and laptops as well as rare books.

A dozen companies are authorized to withdraw money from one of my checking accounts ranging from my ISP to my insurance company to my satellite TV provider — in short any company that has a system to withdraw money to pay monthly or annual statements. I've never had a single problem. My checking balance is always over $10,000 but never has anyone taken a penny more than they should.

PayPal fees aren't particularly high based on standard merchant bank rates for low volume accounts. I've accepted credit cards via my bank in the past and the fees were considerably higher and the service was much slower.

I have a PayPal debit card and can withdraw money in cash at any ATM machine immediately after the buyer pays. I did this only once to confirm that it could be done.

I used other online payments systems in the past, Billpoint, PayDirect, etc. but in the end none of them could compete successfully with PayPal and went out of business.

I've used PayPal for foreign transactions for example in Argentina, South Africa and Thailand that would be been expensive and time-consuming to do in any other fashion.

My wife had one problem with PayPal. She had a mysterious never-explained hold on her account for about 72 hours. It disappeared before she got a reply from customer service.

Richard

[Mejnoon]

Heres a couple sections from their user agreement:


10.2 Actions by PayPal. If you engage in any Restricted Activities, we may take various actions to protect PayPal, eBay, a User, a third party, or you from Reversals, Chargebacks, Claims, fees, fines, penalties and any other liability. The actions we may take include but are not limited to the following:

We may close, suspend, or limit your access to your Account or the Services (such as limiting access to any of your Funding Sources, and your ability to send money, make withdrawals, or remove financial Information);
We may contact buyers who have purchased goods or services from you, contact your bank or credit card issuer, and warn other Users, law enforcement, or impacted third parties of your actions;
We may update inaccurate Information you provided us;
We may refuse to provide our Services to you in the future;
We may hold your funds for up to 180 Days if reasonably needed to protect against the risk of liability; and
We may take legal action against you.



Also from their user agreement, these are the aforementioned "Restricted Activities"


9. Restricted Activities.
9.1 Restricted Activities. In connection with your use of our website, your Account, or the Services, or in the course of your interactions with PayPal, a User or a third party, you will not:

Breach this Agreement, the Card Processing Agreement, the Acceptable Use Policy or any other agreement that you have entered into with PayPal (including a Policy);
Violate any law, statute, ordinance, or regulation (for example, those governing financial services, consumer protections, unfair competition, anti-discrimination or false advertising);
Infringe PayPals or any third partys copyright, patent, trademark, trade secret or other intellectual property rights, or rights of publicity or privacy;
Act in a manner that is defamatory, trade libelous, unlawfully threatening or unlawfully harassing;
Provide false, inaccurate or misleading Information;
Send or receive what we reasonably believe to be potentially fraudulent funds;
Refuse to cooperate in an investigation or provide confirmation of your identity or any Information you provide to us;
Attempt to double dip during the course of a dispute by receiving or attempting to receive funds from both PayPal and the seller, bank, or credit card company for the same transaction;
Use an anonymizing proxy;
Control an Account that is linked to another Account that has engaged in any of these Restricted Activities.
Conduct your business or use the Services in a manner that results in or may result in complaints, Disputes, Claims, Reversals, Chargebacks, fees, fines, penalties and other liability to PayPal, a User, a third party or you;
Have a credit score from a credit reporting agency that indicates a high level of risk associated with your use of the Services;
Use your Account or the Services in a manner that PayPal, Visa, MasterCard, American Express or Discover reasonably believe to be an abuse of the credit card system or a violation of credit card association rules;
Allow your Account to have a negative Balance;
Provide yourself a cash advance from your credit card (or help others to do so);
Access the Services from a country that is not included on PayPals permitted countries list.
Disclose or distribute another Users Information to a third party, or use the Information for marketing purposes unless you receive the Users express consent to do so;
Send unsolicited email to a User or use the Services to collect payments for sending, or assisting in sending, unsolicited email to third parties;
Take any action that imposes an unreasonable or disproportionately large load on our infrastructure;
Facilitate any viruses, Trojan horses, worms or other computer programming routines that may damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or Information;
Use any robot, spider, other automatic device, or manual process to monitor or copy our website without our prior written permission;
Use any device, software or routine to bypass our robot exclusion headers, or interfere or attempt to interfere, with our website or the Services;
Take any action that may cause us to lose any of the services from our internet service providers, payment processors, or other suppliers;
Use the Service to test credit card behaviors.


As you can surmise from the bold sections, paypal can hold your funds for 180 days essentially at their discretion. They do not have to justify their belief that the transaction was fraudulent, so they basically have carte blanche.

[e d o]

Mejoon,

Moving funds from your PayPal account to your checking account is by no means any kind of protection. They will just pull it right back out of there if there is any kind of problem. By signing up you have given them that right.

For all you guys with hundreds of transactions and no problem, that's great but the day will come when you will have a problem due to no fault of your own and you will be powerless and kept in the dark for an unreasonable amount of time. Chances are that it will be for something other than a cheap razor and it will certainly be for something that you have sold. It's a little hard to fully understand just how you can so easily get burned by PayPal until it happens to you. Much of the government mandated protection for banking consumers does not apply to PayPal. Their incompetence is driven home when on your third call to them you spend 45min. talking to someone in their resolution department and the conversation ends with them apologizing about the inconvenience and ensuring you that the funds will be in you account in 24 hrs only to find that two days later the funds are still not there and that there is no record of the previous conversation or of anyone promising anything.

[e d o]

Richard,
What do you think Paypal will do if you withdraw a balance with your PayPal debit card after you sell a five hundred dollar item and either the buyer complains (rightly or wrongly) or they suspect something dodgy about the source of the funds. They will pull it right out of the bank account that you have linked your Paypal account to. If there is not enough funds there because you removed them then you get stuck with the overdraft charge. This is the point where their service starts to loose it's appeal. After three months you forget about the 3000 fine transactions and all you can think about is the $500 your out and the $35 overdraft charge they caused and all the frustrating phone calls to them.

[Silb3r]

Even if you're a buyer it's not so great--they just disabled my account because I use CitiBank virtual account numbers (which are supposed to be used just like credit cards). I might miss out on the SCS sale because they say it takes 24 hours to "investigate". Nonsense.

Vendors: Start accepting Google checkout (http://checkout.google.com/seller/experience.html)!

Thanks :smile:

[jellywerker]

but I cannot fathom why I have not isolated them from my main bank account.

Take a tip from someone burned by them, do this AS SOON AS POSSIBLE! The reason I was charged so much in overdraft fees is that the account I verified paypal with is one I no longer use. I added a new account using info from the bank account I use daily, and made it my primary account, and paypal ignored the change, continuing to use the old account without my knowledge or consent. When I got my paper statements, I saw what was actually going on. Upon confronting paypal, I was told that it was my fault and I would have to cover and charges incurred from their faulty service.

[bigmo]

I spent time as an ebay selling manager, we used paypal primarily. What I've found is Paypal doesn't care about their own user agreement. Paypal does as they please. I had a transaction that was covered by buyer protection. We shipped the items and a claim was filed for unauthorized use of the paypal account, we lost the items and the money.

[Sabledog]

Can anybody give me a quick summary of the Google Checkout? I'll read it in depth when i get a chance, but a summary from experience would be great.


I just signed up, it looks like a good alternative. I'd still like to hear more about how it works (through ebay etc) from those that know.

[Suzuki]

I'm not a high volume transactor, I tend to do most of my transactions with B&B members (which I think provides a measure of security), but have done several transactions with e-bay merchants.

I have had a single instance of someone putting fraudulent charges on my Paypal account and the situation was rectified by Paypal within 24 hours.

However, I have administrative issues with my account and clearing those up is a nightmare - some of the worst customer service I've ever seen. I am also troubled by the new policies of both e-bay and paypay - this will likely impact how I do transactions in the future and with whom.

As many have said, the reason e-bay and paypal can implement policies like this and have crappy customer service is because they face no effective competition.

[letterk]

Can anybody give me a quick summary of the Google Checkout? I'll read it in depth when i get a chance, but a summary from experience would be great.


I just signed up, it looks like a good alternative. I'd still like to hear more about how it works (through ebay etc) from those that know.

Google Checkout is NOT a substitute for PayPal. It aims to give small time vendors an easy and sort of inexpensive merchant-like account. What it doesn't do is give individuals the ability to easily send money to other individuals, the feature that made PayPal what it is today. Along the way, PayPal made it too easy to use for vendors to not use it as well, which is why you see it so widely accepted. Google Checkout may become a decent option for small vendors, but it's not there yet, not even close. They put some severe restrictions on how it's used, the technical support for vendors is poor, and their service doesn't follow many industry standards. As a vendor, I've looked into using Google Checkout and keep finding reasons for not using them. I'm probably just going to get a real merchant account.

On a side note, as a user Google Checkout user, I've already been burned by them more than PayPal and I've only used them a few times.

[e d o]

A little over a month ago eBay announced policy changes. For the most part fees went up, especially for inexpensive items, although they tried to make it look like fees were going down. At the same time they announced that there would be no more negative feedback. I thought great, make it more difficult to see who the flakes are and easier for me to get ripped-off with PayPal. I don't think they ever implemented the new feedback scheme though. Probably had too much protest from users. The feedback system is certainly not perfect but it is a measure of a persons track-record.

[Sue]

I just looked at the Google link and although it looks very user friendly I worry this too will bring problems to my customers in some form.

I would also like to see what format/records the seller will have available to them. How is it displayed?

---- Paypal the "Good", the "Bad", and the "We love to piss you off" ----

SCS is a 'Business Account'. Paypal offers "Business Overviews" in several formats. As a seller/vendor; I require different information for taxes that are unnessary for buyers. Changing to a different service is not a decision to be taken lightly.

Can I streamline Customer and Tax records from Paypal to Google?

What are the transaction fee percentages?

Can I link my supply purchases into a monthly, weekly or Yearly Business Overview, how about shipping charges?

I have had major headaches with Paypal and have been trying to work with them for close to a year. My Account was set up in the 90's. It was a personal account initially. I changed it to a Business from Personal Account. This was fine until I wanted to obtain a Paypal credit card for supplies which would link all payments of my supplies which I would purcase only with the Palpal CC so the balance sheet would automatically include this information.

So far this is impossible because the initial account was set up in my late husbands name. To make matters worse he used the name Dave instead of his legal name of Howard. (he went by Dave, his middle name since childhood).

I have been asked to fax a copy of the Death Certificate. I was told it was't Certified. It was. I takled to three morons who didn't seem to understand a fax will not leave the emobossing. So I snail mailed a second. That wasn't good enough. So far I've sent a copy of two pages of our Revocable Trust which I am a Trustee. The Trust allows me, as a surviving Trustee, the rights afforder Dave if he was the survivor. Well, Palpal doesn't think so. Ive been asked and also sent a copy of our Marriage Certificate. A copy of a bank Statement which is in the name of the Trust. A copy of Dave's birth Certificate.

Why don't I just close this account and open another in my name? I will lose my seller rating which is excellant and have to start over, my records will be disjointed, my customer files will be a mess. PP cannot assure me easy access to the former account if it is closed. I can't understand many of the CSR's as I only speak English.

What's to love about Palpal?? Absolutely nothing!
Sue

[Silb3r]

Sue,

I don't know much about Google Checkout, I just wanted to throw it out there as an option for you to investigate; Since I don't do any online vending I'm not familiar with its incentives/disincentives or how it stacks up with PayPal.


A little over a month ago eBay announced...that there would be no more negative feedback.

The change(s) to which you refer (http://pages.ebay.com/services/forum/new.html) will take effect, however it does not eliminate negative feedback.
Instead, the feedback system will no longer permit sellers to leave feedback for buyers (buyers will still leave feedback for sellers).
This is being done to enable sellers to receive more appropriate and accurate feedback. Often times a buyer will not leave negative or even neutral feedback out of fear of retaliatory feedback from the seller--This measure is designed to put a stop to that. This way buyers can feel free to evaluate the transaction accordingly without putting their own feedback score at stake.

In addition, any negative feedback one has thus far accrued as a buyer will, after one year, not factor into your feedback score (allowing you to go back to 100%!). I am not sure if the feedback itself gets removed, but the point is your score can get back up to 100%.

I think it's a good plan and as far as I know it's set to take effect some time this year.

[New2DEShaving_Montreal]

Richard, I read your post, and I don't want to say anything mean, but if you've got a $10,000 balance in your checking account, and you have given Paypal access to it, can you please come back in here and write a post when Paypal decides to freeze your account, and rips into your bank account to take your $10,000 ? Please let us know will ya? I know you are very smart and all knowing, so I doubt this will happen to you, but just be sure to let us know when it does, so you can join the rest of us who've been burned by paypal.

BTW, does anyone think it's better to add a Credit Card to paypal and NOT a bank card? I am started to get VERY nervous about this whole thing.
Paypal's function makes life a little easier, but their implementation of it, horrible customer service, and just plain deceit..as if their SYSTEM targets people randomly once they are reported to have a high volume...just makes me cringe!

I know most members here prefer Paypal to get a payment, but is there a better way?

p.s. Great posts SUZUKI.

[Sue]

Well, while we're on the topic of Paypal I neglected to add three more of their requirements to change my deceased husbands name on my account.

A Drivers License, no biggie but I no longer drive since I can't trust my legs to stand on. (I used to have a CDL) PayPal had deaf ears, they want a copy. DUH!

Next -- send a copy of Letterhead. I don't have letterhead, so I put a copy of the logo and address info on bond paper and snail mailed it. I called to confirm its receipt. Yes, now they only need a copy of my SCS bank statement indicating my name on it.

I don't have a commercial checking account as I do not accept checks at my address instead I use PayPal that does accept e-checks and other forms of payment.

Who cares at Paypal about helping a person out?
Sue

[mistercoffee]

As a guy who works for a large bank, I deal with PayPal issues every single day - fraud, complaints, holds, etc.

I swore off PayPal a long time ago, after getting burned by PayPal. I had shipped $3500 worth of computer memory to a confirmed address/buyer via FedEx with signature requirement and insurance. I had notarized inventory counts of the memory, and actually included a few extra pieces than what the buyer had paid for (we were liquidating memory from 500 old PCs).

I was a confirmed seller, with nearly 1000 transactions, all positive, on both eBay and PayPal. The person who bought the memory had 1 transaction on eBay and 0 transactions on PayPal.

I got the money, shipped the memory, and moved the money from my account into our Bank's account. About two months later, the buyer claimed that I had shorted him 5 pieces of memory, and as such, PayPal dinged my account for the full $3500. It took 6+ weeks to get that mess sorted out, and they did find in my favor, but for a month and a half, I was held "hostage" by PayPal.

I'll never use them ever again. No matter what. PayPal could become the monetary standard in the USA and I'd move to Canada or Mexico instead. They are absolutely horrible, are not regulated by anyone, and can basically do whatever they please.

Although, I posted about this before, and got ridiculed a little... (http://www.badgerandblade.com/vb/showthread.php?t=30719&highlight=paypal), so what do I know?


To the folks that have good luck (so far) with PayPal, don't worry - you'll have a bad experience eventually. Count on it.

[gugi]

My personal opinion of PayPal is very low. I have not lost any money, but seeing how they've handled few situations when they have made an error made me read some more on them and the horror stories abound.
Certainly if every person had a horror story to tell, paypal will be probably out of business. It's worked perfectly for many people like Richard, but that doesn't give me any comfort.
Paypal certainly has one of the worst policies and customer service I have encoutnered. I started using google checkout as soon as I found it works and I've always offered it as an option to people. A non-profit organization I've been helping is also using Google checkout and not paypal.
Google may be even worse, but so far I have not read any examples of things gone wrong. And I'm much more impressed with Google's security measures than with paypal's.

Google checkout is not where paypal is - you can't arbitrarily send a payment, the seller must create the invoice or the shopping cart. Also google's shopping cart interface is quite unfriendly at the moment. They need to make an easier interface on top of the API if they want small merchants to use it. But google isn't doing it because they want to provide transaction processing - their interest is in gathering data on consumer purchasing, so at this stage I think it's an experimental thing for them.

In any case financial institutions are regulated for a good reason. Paypal has a lot of similarities, but they are under a completely different category and are not regulated - as many have found out they do as they please. And ebay is the parent company to paypal, so I'm not sure who really has interest to keep it this way. Certainly not the buyers and the sellers.

[Lionhearted]

As a guy who works for a large bank, I deal with PayPal issues every single day - fraud, complaints, holds, etc.
Unlike PayPal I've had numerous problems with banks large and small. Once State Street of Boston lost a $167,000 deposit I made. I had a receipt stamped by a teller. It was a cashier's check so eventually I got it straightened out but it took over three weeks with the heavy cooperation of the person who gave me the check and the bank issuing the check. I had to submit a notarized statement and provide a bond to get the original check lost by State Street canceled and a new one issued.

Numerous times over the years banks have bounced pocket change $10 or $15 checks when I had thousands of dollars in my account. They apologized and wrote letters and made phone calls to the merchants who took the checks but that didn't excuse their carelessness.

Actually PayPal is far more regulated than most banks. It's primarily regulated by the Federal Trade Commission but also by Federal Reserve under electronic fund transfer laws and by each state individually as a money transfer service provider. It's regulated under the Patriot Act by Homeland Security. It's regulated as a bank in Europe and by the Financial Services Authority in the UK.

Richard

[New2DEShaving_Montreal]

Yet even with all these regulations, what does it matter to the average users who have been burned? Paypal should start by having a better customer service. Toll Free. Their agreements are to protect them, not their customer. It's wise to read all the small print. I had a friend that made volumes of sales, and when paypal saw he had a high volume account, they froze it for 6 whole months! About $13000 dollars worth that was in his PayPal was gone! He fought back and was able to get about $5000 back, the rest is history. The only reason I even have it is because it makes it convenient to send a buck or two, but there's just no way in hell I would run a business trusting it with Paypal. No way.

[mistercoffee]

Actually PayPal is far more regulated than most banks. It's primarily regulated by the Federal Trade Commission but also by Federal Reserve under electronic fund transfer laws and by each state individually as a money transfer service provider. It's regulated under the Patriot Act by Homeland Security. It's regulated as a bank in Europe and by the Financial Services Authority in the UK.


I don't even know why I'm bothering to respond to this, but for some reason, I can't resist... Saying that PayPal is regulated by the Fed because it conducts EFTs is like saying that your local Denny's and/or BP stations are regulated by the Fed (because they can convert checks to ACH and they process debit/credit cards, pay their employees and vendors via EFT, and so on). They may be loosely responsible under Reg E, but for the most part, PayPal = the wild wild west.

I'd also love to see someone claim that PayPal was responsible for returning funds or releasing a hold because it has to comply with the Patriot Act. These days, nearly everyone that conducts any business that transacts funds electronically has to comply with various portions of the Patriot Act.

The simple truth is that PayPal is almost completely unregulated by any entity with any teeth when it comes to matters fiduciary. PayPal even admits it themselves. They indicate that they "believe" they are regulated by Reg E (and by association, the Federal Reserve). They are not regulated by anyone like the FDIC, or OCC. Those are "the big boys" that banks have to deal with.

[Dent]

I only have small experience with Paypal as a buyer. Personally I will never, ever link a bank account to Paypal. I pay by credit card only, and here's why.

Credit card vendors offer much more protection than bank account transactions. This is usually what sellers know as the charge back process. From a buyer's standpoint, credit card disputes are usually the first and easiest way to solve an issue with a charge on their account.

I used to work for a very large bank in their credit card disputes department. From that standpoint, Paypal offers the lousiest protection for their sellers. I can easily understand why so many sellers no longer use Paypal. While we worked for the buyer and were on their side, many of us sympathized with sellers who had no way to get their money back.

The joke around disputes was that Paypal was such a pushover that you could win any charge back. Good for buyers, very bad for sellers. Sometimes sellers would call us to try resolving things directly instead through the credit card vendor.

tl;dr: Use a credit card as a buyer and never link a bank account to Paypal. Visa, Mastercard, and most other major credit cards offer very powerful tools for consumers who need to settle disputes and fraud charges, etc.

[e d o]

I've just received my first Google checkout payment from someone who's PayPal account is frozen. So far so good. It's cheaper than PayPal and will hopefully become more widespread.

[Mr. Gillette]

I use it, and have had not problems....but I "Manage" it...I keep a small amount of money in it-- along the lines of 3-5 dollars. I make very few, if any, purchases with it, and when I receive funds from the proceeds of a sale, I move it immediately into another, non-linked account.

I have been fortunate. Yes...there are some Paypal-scumbuckets out there. But you have to keep your eyes open. To me, Paypal is like a credit card or checkbook-- if you leave it lying on the counter and walk away, someone is going to get creative and find a way to use it.

So I keep it closed, "empty" and in my pocket.

[samsfriend]

Yet even with all these regulations, what does it matter to the average users who have been burned? Paypal should start by having a better customer service. Toll Free. Their agreements are to protect them, not their customer. It's wise to read all the small print. I had a friend that made volumes of sales, and when paypal saw he had a high volume account, they froze it for 6 whole months! About $13000 dollars worth that was in his PayPal was gone! He fought back and was able to get about $5000 back, the rest is history. The only reason I even have it is because it makes it convenient to send a buck or two, but there's just no way in hell I would run a business trusting it with Paypal. No way.

I had a similar experience with Paypal. Had my money frozen, luckily just hundreds and not thousands. I visit a website that discusses the truth about paypal (http://www.aboutpaypal.org/forums/). I have been burnt by them once. Never again, I'll tell you.