PayPal - Friend or foe?

[UKRay]

I'm having a bit of a struggle this week. Essentially I'm struggling to stop myself getting in my car and driving 200 miles to choke the living sh*t out of a guy who has virtually shut my online business down by making a spiteful (and wholly unjustified) complaint to PayPal.

Essentially I sold the creep an amplifier and a few bits of musical tat including a foot pedal/switch thingie on eBay. He complained about the delivery costs so I offered to deliver- free of charge - next time I went to his area. I handed the amp and stuff over and he grumbled about the way I had described one of the foot pedals and said he had expected an effects pedal not a switch pedal. I told him that if he wasn't happy I'd gladly take the stuff away again but no, he wanted the amplifier and agreed to accept the delivery. He took the amp out of my car and carried it to his own vehicle - this man wasn't under any pressure to accept the deal.

I got back home two days later to find an email that said he had changed his mind about the deal and if I didn't give him a £25 refund because of the 'poor description' he would make a complaint to PayPal. This was far too close to extortion to please me, so I told him to do as he pleased but the deal had been agreed and it stood.

Next thing I know he actually made the complaint and PayPal have frozen all the funds in my account. £250 quid's worth. I was furious and fired off a spate of complaints to PayPal including a complaint about the jerk who caused all the problems.

I tried to resolve matters by offering him his money back as long as the goods were returned to me but he said he wanted to keep the amplifier... but he still wanted a £25 refund. At this point the jerk has my amplifier and PayPal has all the money - two weeks later nothing has changed.

This is what PayPal wrote back today (yup, almost two weeks after the event they finally wrote me an email):

Dear Ray,

Thank you for contacting us in relation to the status of your Buyer Complaint case ***********.

First let me begin by apologising for any inadequacy or inconsistency of service you feel you have received to date.

I realise that you are not satisfied with the way this dispute has been handled and I can confirm that our policy to hold funds that are disputed.

Please note that this policy was approved by you at the time when you opened your PayPal account and it is a standard measure in the buyer complaint resolution process.

The money will be released into the buyer's account once we can verify that the item in question was returned back to you.

I understand your frustration regarding this matter and regret any inconvenience it might have caused you.

Sincerely,

Marek

Protection Services Department

PayPal, an eBay Company

That would have been bad enough if I hadn't already had an email from the pompous little jerk a few days ago as follows:

From: Nicholas Forty

Sent: 25 May 2009 20:17

Subject: Apologies

Dear Ray,

Although aggrieved by the absence of the effects pedal, on reflection I've

come to realise that our meeting was the time to protest. Things may have

been rushed but you had acknowledged your error and did give me an

opportunity to object ('If you're not happy...'). Unfortunately I was too

weak to assert myself...

I apologise for not having come to this conclusion sooner (the irritation

had got the better of me) and will cancel the PayPal claim.

Yours sincerely,

Nicholas Forty

,

That was four days ago and the claim is still in place... I am furious, frustrated and fit to cause all kinds of mayhem.

How would you have dealt with this guy and how would you deal with PayPal given that I need PayPal to run my online business.

Ray

Edited May 28, 2009 by Johanna
removed email addy

[King's X]

That sucks, but they get you on the small print. I feel for you brother.

[rdb]

Long distance transactions stink! There's too much room for error, but a lot of us still do it.

I can't offer anything but commiseration...(sp?)

I was talking today, to someone who will not ship to some countries because of credit card deals gone bad. That being said, Paypal has been a convenience to me, but not a necessity. Same with ebay. I've learned to keep just a small amount in paypal for this very reason.

You gave this guy every chance to back out, instead he acted the spoiled little kid, apparently.

Hopefully he sees the error of his way, and this gets resolved...but in the meantime, maybe you can get a new account under some other name or email, and just rewrite the webpages to change it. I know I have several paypal accounts (because I kept forgetting the password...lol). I'm lucky enough to have several bank accounts (peanuts in them) to use for this very occasion. Flow like water, Ray, Flow like water! Don't let the b@#$&ds get you down.

I also have a merchant account that allows me to take ccards over the phone. As long as I get visa/mc verification everything rolls along smooth.

Paypal and ebay have grown to the point where they are huge businesses, and many people are unsatisfied with them now. They have all the business, and treat their customers like dirt. There are a few other companies that do the same online thing, the trouble is everyone is already on paypal...catch22.

[yehagirl]

When I started my business I was going to use paypal - until I read the whole contract. They basically said that they owned my web site if I used pay pal. You might try using Mals http://www.mals-e.com/ for your credit card processing. It is pretty simple to use and they have a forum to help if you get stuck!

Edited May 28, 2009 by yehagirl

[Johanna]

In the US you can tie a checking account into your payPal account. If any money accumulates in my PayPal account, I "withdraw" it to my checking account. If I want to buy something with PayPal and the money isn't there, they debit that same checking account. Was he able to freeze the whole account because that was the total of the original transaction? If he was only disputing $25 then only that much of the account should have been on hold, not the whole balance.

Johanna

[electrathon]

Just so you know, you as the seller will always be ruled against. Take it in the shorts and move on. You need paypal, suck it up. Look at it like your store was just shoplifted.

[UKRay]

In the US you can tie a checking account into your payPal account. If any money accumulates in my PayPal account, I "withdrw" it to my checking account. If I want to buy something with PayPal and the money isn't there, they debit that same checking account. Was he able to freeze the whole account because that was the total of the original transaction? If he was only disputing $25 then only that much of the account should have been on hold, not the whole balance.

Johanna

That was exactly what I did, Johanna. I withdrew almost all the 'cash' in the PayPal account as soon as it was paid in, but PayPal simply put a minus sign on the balance for the whole £250 transaction which means anything that came in (up to £250) was annexed and I couldn't pay anything out - unbelievable. Okay, there is a credit balance in there now but I had some small bills to pay last week. I really hate feeling so completely powerless!

PayPal even demanded that I paid money in to the account to cover the outstanding balance... I declined!

[Bree]

Let's talk about the consumer end. Paypal is all about EBay and if you use Paypal as a consumer for purchases outside of EBay you're probably nuts. Use a credit card.

I bought a GPS from an outfit named eSC Stores. I was in a hurry and didn't do my homework. I used Paypal thinking that they would protect me. BIG MISTAKE!!

ESC Stores turns out to be a bunch of thieves. They took the money and that's about the last I heard from them. No replies to communication... no goods shipped. I file a Paypal claim and they don't reply to Paypal. Paypal rules in my favor but they say that they can't recover any money from eSC Stores so I won't be getting any money.

Bottom line... I am out $424.22. Thanks thieves at eSC Stores. Thanks Paypal.

Take my advice use your Visa card and forget Paypal. You may get protection for EBay purchases but nothing else.

[JohnBarton]

Paypal is both a friend and a foe. I have been very lucky to have had no major problems with PayPal and they have been extremely friendly to me whenever I have had issues that needed to be resolved. Luckily I have also not had anyone file a claim like this.

Lately though I have become very concerned about Paypal's dispute policies.

I had another friend in England have $20,000 frozen for months because of "suspected fraudulent activity".

Paypal operates in a gray area - they are not a bank and so aren't subject to the law the way banks are - not that banks are any better to deal with. But essentially they own ALL records of transactions that you do on their system and that's why I am not keen to place too much of my business health on my ability to transact through Paypal.

This really sucks that it had to happen to you. I suggest investigating alternative means of electronic payment such as Google Checkout, Neteller, WesternUnion, MoneyGram, etc.... or even merchant accounts. When I had my merchant account I had probably five claims in ten years and on all of them I was able to keep the money because I had gotten ALL the information needed to verify identity.

Another thing that I have done in the past regarding paypal is to have multiple accounts set up. You will need a few bank accounts and a few email addresses but this has been something I have done in the past to make sure I always had a "working" paypal account.

I also do NOT tie my paypal account to my real email address. I use a catch-all box on my domain that allows me to make up email addresses on the fly. The catch-all box accepts all emails that are addressed to @jbideas.com and are not already assigned an email box. Thus I can make up a new email and get a new paypal account instantly if need be. Of course this doesn't mean that you can get around the other things PP wants to "verify" the account. I do that by having several bank accounts and using the "virtual credit card" feature that my bank offers. This assigns a valid credit card number that I can use for online purchases. So I tie that to the new PP account and they are none the wiser because their computer can't distinguish between a credit card number assigned to a real card and a virtual one.

Of course none of this actually helps you to get your money from this jerkoff. On that score I'd start out by explaining to Paypal that you are going to start a class action to protest the way they handle claims. I don't know what to tell you. Maybe file a complaint with the police in this man's town? This is one of the crappy downsides to the internet. Even crappier since this time you personally met the guy and offered to rescind the deal.

I wish I had a better answer for you. Hope it works out soon!

[UKRay]

Interesting story, Bree - but I use my PayPal account to pay small overseas bills because it is so much cheaper and easier than using a bank. THis is the first time I have had any problems with PayPal and, trust me, I'll be much more careful in the future . The thing to recognise is that making any kind of payment to a private individual in the US, or even in mainland Europe, is a nightmare if you live in the UK because of the astronomical charges the banks impose for international transactions. I have bought great stuff from several forum members without a glitch using PayPal and been paid for all kinds of leathergoods. The essence is being able to trust the folk you are doing business with.

It is also very easy and much cheaper to deal with trusted businesses in other countries. Just picking up the essential bits and pieces for my new sewing machine was made easy because the vendor was happy to take PayPal (thanks Ryan!) so I simply spent my dollar balance and didn't incur any exchange fees.

The problem comes when you get a piece of poop like the guy who tried to rip me off - you simply can't legislate for weirdos, mad people and sad little men like him.

The financial aspect isn't a bother so I'll get over this quite quickly, but it has definitely left a bad taste.

Thanks for your support folks - I'll stop moaning now and get back on my horse... my stitching horse!

Let's talk about the consumer end. Paypal is all about EBay and if you use Paypal as a consumer for purchases outside of EBay you're probably nuts. Use a credit card.

Take my advice use your Visa card and forget Paypal. You may get protection for EBay purchases but nothing else.

Edited May 28, 2009 by UKRay