posted on October 18, 2000 06:21:20 PM new
Well, it didn't take long for us to reach that $500 limit on money coming in from credit card payments. If you're curious, when I hit this limit I received a brief email from PayPal explaining that I would not have access to this money, or additional monies, until I upgraded. There was a personalized link to an upgrade page. And there was a (too-brief) explanation of the fees associated with the upgrade and the subsequent Premier or Business service. In my opinion they glossed-over the actual fee schedule mightily.
I had always assumed, as this fiasco of the last few weeks progressed, that PayPal would face a buyer's revolt. I suspected that, when people tried to send money to recipients through PayPal, and when those payments were not processed and kicked back, that the buyers/senders would be upset with PayPal, not so much with the seller/receiver.
This is NOT what is apparently happening. I hit the $500 limit today, but the money is still coming in. I cannot get to it. Instead I receive a reminder notice with each payment that in order to GET the money I must upgrade my account. The sender of the money thinks the money has reached me.
Now, how can PayPal do this, legally and ethically? How can they process a credit card payment on my behalf and NOT deliver the money to me? They should be turning down the transactions completely and face the buyer's wrath. Instead, they collect the money, hold it as 'ransom' for my eventual upgrade, and earn that precious 'float' on that money in the meantime. Seems almost, um, well, crooked.
I emailed two people who tried to send me money today after I hit the limit. I have had one response so far: he says he had no idea that his payment had not reached me.
I am frankly dumbfounded and have no idea yet how I will handle my account going forward. I had not expected PayPal to trade on my good name and hard work to collect money that they may, or may not, ever send on to me. If I refuse to upgrade will the sender get the money back? When? How will I ever know?
Needless to say, I'm ticked and deeply concerned. Billpoint, you have my number, feel free to call...
posted on October 18, 2000 06:27:54 PM newNow, how can PayPal do this, legally and ethically? How can they process a credit card payment on my behalf and NOT deliver the money to me? They should be turning down the transactions completely and face the buyer's wrath. Instead, they collect the money, hold it as 'ransom' for my eventual upgrade, and earn that precious 'float' on that money in the meantime. Seems almost, um, well, crooked.
ALMOST crooked? This is disgusting. Are you saying that unless you upgrade, you can NEVER get the money that is already in your account? And they continue to accept additional payments into the account? This MUST be against the law! The money that is already in your account is YOUR money, payments (I presume) for merchandise already shipped or due to be shipped. There is NO WAY that PayPal can legally get away with this...
posted on October 18, 2000 06:40:23 PM new
I have no sympathy for you, last I knew you were closing in on 20,000 feedback, were running thousands of auctions and are def. a BUSINESS, so why not upgrade? Heather
[ edited by hcross on Oct 18, 2000 06:41 PM ]
posted on October 18, 2000 06:45:32 PM new
hcross:
You may have a valid point, but PayPal should at the very least give him the option to close the account and retrieve the money that he has already rightly earned. But to tell him that he can NEVER get his own money unless he upgrades is ludicrous.
posted on October 18, 2000 06:50:48 PM new
Heather, like many here who put their faith in the printed word of PayPal, I accepted at face value their offer of a perpetual free service. I even spoke to them by phone last week and asked to be continued as a free user. Yes, I run a lot of auctions. 2,500 individual items a week. I was recently told we are the largest individual recipient of hits within the eBay system.
Each one of the pages has a PayPal ad on it. Also, my credit balance with PayPal is always fairly high. I am an valuable commodity to PayPal.
I am unlike others here who seemed oddly concerned with how PayPal would earn money (although I have never sensed a concern on PayPal's part on how I might earn money), and I am not one of those who felt somehow sympathetic to apparent problems with the PayPal business model. I sense sour grapes on the part of PayPal users who upgraded and began paying heightened fees too early while others decided wisely to wait.
I'm afraid I'm a struggling 'dot-com' myself. I see no point in paying for something, ever, that is being offered to me for free. That is good business sense, ma'am.
posted on October 18, 2000 06:51:00 PM new
I am quite sure that if he chooses to close the PayPal account, the balance in the account will be sent to him.
PayPal has made it clear that he has two choices: Upgrade or Look Elsewhere for Service.
posted on October 18, 2000 06:53:20 PM new
It has nothing to do with how much is in the account. A personal user may only receive up to $500 per 6 months. If he does not upgrade after receiving the 501th dollar he can retrieve the money at the rate of $500 every 6 months. Meaning that if he has $3000 in the personal account, and nothing more added, he will receive all the money in 6 years.
posted on October 18, 2000 06:56:06 PM new
I didn't realize exactly how the funds would be rejected. However, I'd suggest you do what I did. Make a business decision as to whether you want to accept PayPal or discontinue the service.
I decided after considerable internal wrangling to keep it so I upgraded. Of course I liked it better w/o the fees but if I get fast payment from international customers it will help to speed up the process. My biggest concern is 1.9% will turn into 2.25, 2.5, etc. Then I will reevaluate.
The business model of the internet has always been bait and switch. Pay Pal - even though they said "always free" was unfortunately no different.
posted on October 18, 2000 07:17:58 PM new
...uhhh...
unless you were hiding somewhere in Uzbekistan for the last month, you saw this plan of Paypal's discussed endlessly here on AW. People who exceeded the 500/6 month limit would need to upgrade to get access to the monies in their account. Where is the surprise? It sounds like you thought they would make a special exception for you and continued to encourage paypal payment although you must have had *some* inkling that you were getting close to the 500 dollar mark.
I'm sure if you close your account they will send you a check. You know exactly why they are keeping your money---you exceeded their limits per six month period and the penalty is having to upgrade or leave to get the money back again. With the volume you do, you are costing them money regardless of the eyeballs who catch your ad on your site. So although I find Paypal to be a company that deceived its users, I also find your cries of foul play ingenuous. Two wrongs don't make a right.
If you think they are screwing you, close your account and get your money back. If you think they are screwing you yet you choose to use them anyway, then why send up a hue and cry over what is after all just a case of Paypal following its own rules?
Kim
"This isn't Burger King and you can't have it your way."
posted on October 18, 2000 07:18:21 PM new
Though I might have certain feelings about a person who has 20,000 feedback complaining about paypal, since they don't want to upgrade their paypal account, I will keep my comments to the original post.
How can paypal do this? They are not a bank, therefore they don't have to follow any rules and regulations that a bank would have to follow. They are free to change the rules as often as they want to.
posted on October 18, 2000 07:24:06 PM new
I thought Damon said there would be a way to ask the buyer to retract the transaction.
If not, wellll - that's a far piece too far in tromping on customer rights to their own money. I'd say it's a good time to contact a lawyer and have him or her write them a rather threatening letter.
posted on October 18, 2000 07:35:40 PM new
Well here's something you can try:
AuctionBytes has a new feature where you can rate and review Payment Services, Image Hosting services, Counters, etc. What's cool about it is that each time a review is left, the company is notified via email that someone has left a review.
Maybe users should QUANTIFY their opinions of services such as PayPal. It MIGHT help change a company's policies, and it would DEFINITELY help other users see how services rate!
Link's at http://www.auctionbytes.com/bin/bizdirectory/biz-dir-index.pl
[ edited by vidpro2 on Oct 18, 2000 07:37 PM ]
posted on October 18, 2000 07:40:12 PM new
If you want to keep more customers from being victimized, get your eBay e-mail address OFF that PayPal account-- pronto!
Next, you'll have to decide if PayPal and its business tactics are worth it for you and your business. (Remember "Always Free" and "No one will be forced to upgrade".)
If the answer is yes, then upgrade and re-evaluate after the next sneaky PayPal move (it may be sooner than you think, check out what happens when a user pays with an echeck that's not guaranteed by a credit card).
If the answer is no, then you have a couple of ways to go:
Upgrade in order to honor the free advertising you're providing PayPal in your listings, don't put PayPal banners in any further listings, then close the account when all of the PayPal-related auctions are paid for...
or open a separate business PayPal account in order to honor the PayPal ads in your listings, remove the PayPal logos from future listings and close the account when all of the PayPal-related auctions are paid in full. Close your personal account and hope PayPal sends all of the funds at once.
posted on October 18, 2000 08:05:36 PM new
Well as you could clearly see this was going to happen then the time to settle all this was before you hit that $500 mark. By ignoring it as you saw it coming you clearly set yourself to "butt heads" with PayPal on this. You should have closed down the account bnd stopped taking PayPal as a payment method if you could not agree to the terms.
Or upgraded and accepted the change. The only way this has any value is if you wish to force a test case. Otherwise it is just a bullheaded pain in the butt for everyone concerned to ignore what you knew would be a problem.
posted on October 18, 2000 08:22:53 PM new
I'm sorry, but I don't have any sympathy either. For a number of reasons.
1) Seems to me you had ample opportunity to *get a whiff* of the foul odored ways PayPal does business. You also, of course, had ample notice from THEM that the fees were increasing. They made a business decision -- and basically, you didn't. (Or, perhaps slightly more accurately, you chose NOT to decide, which is also a decision. They are helping you off the fence, which they flat out promised to do.) Where's the surprise?
2) Some of us teeny tiny sellers took some heat because we objected to the fees and to the idea of upgrading (since we're barely businesses and simply couldn't afford the fees), and were for the most part thoroughly trounced by some of the haughty Power Seller types around. Now you saunter in and complain? Sorry, the other Power Sellers before you pretty much eroded any sympathy some of us MIGHT have had.
3) I am always dazzled by the sense of ENTITLEMENT some people have. Why did you think you were different, and entitled to *special treatment*? Just because you're so big? All the more reason, I would think, that PayPal wants its cut from you. Personally, I think you've been stealing from them -- and I don't mean that as a personal attack.
4) The notion that your buyers would have changed PayPal's mind is also astounding to me. Not only in the naivete on your part (after all you've surely read here -- ??), but also -- again, that sense of entitlement, that YOUR case is special, and your buyers would *save* you. Amazing.
But I'm no PayPal lover either. I relish the thought that you'll perhaps be considering moving your hefty account elsewhere -- unless, of course, you can convince them of how *special* you really, really are.
posted on October 18, 2000 08:32:34 PM new
In the meantime, PayPal's sending its flak out to tell people that he "understands" that sellers who hit their limit can refuse credit card payments.
Check out "Vehicle for CC Charge Refusal?" in the PayPal forum at OTWA.
posted on October 18, 2000 08:37:01 PM new
Clever girl - I'm a power seller also (whoop de do) we are not all head cases. PayPal runs their business and if they want to put forth a set of terms I will accept them or reject them. Right now they are worth the cost and risk. If that stops I will drop them. Reality is I have run as much as $3k a week through them and it is silly to think they can do that for free. If they would just fix the problem with freezing the entire account for a problem transaction I can live with them.
Surely this is just to force a test case!
posted on October 18, 2000 08:46:20 PM new
I closed my merchant account because PayPal seemed to be such a great deal. My fees when I ran them myself .11 per authorization, and 1.770% of the transaction, but there was a 15.00 per month statement fee.
I closed my merchant account because there were too many chargebacks. Buyers can now do chargebacks on PayPal so I guess we have that to look forward too.
PayPal said they would be free forever because they make money on the float. Who do you think makes them more money?? Jereth having a thousand or two in there and probably transferring it to X.com where they probably have several thousand dollars sitting and making x.com and PayPal money? or the little guy that has a free account that moves a few auctions and has next to nothing for them to draw interest on?
in the real world the more business you do the cheaper it gets, not with PayPal. the little guy will be next, then they will be able to offer the discounts on the fees to get back all the people they have chased away.
for me, I'll probably close my account when I hit 500.00, which will be this week, and just use the free services or just go back to taking checks and money orders. It's really easier to process monies sent in the mail than monies sent by PayPal, especially when they don't send an email letting you know they've sent the monies.
posted on October 18, 2000 08:55:13 PM new
Thanks for the notes! No, we are not naive or conniving. We spend 80 - 100 hours a week on eBay and auction related sales and research. My personal background comes from 18 years with Merrill Lynch. I have a business degree. I understand the internet, the dot coms, the business models, etc.
I have not upgraded simply because I (1) didn't feel like paying fees until I had to, but more importantly (2) I was ready to test the market. Would my customers come with me if I dropped PayPal? Would they move with me to another service? Would they stick with me if I raised postage fees or something else to offset the PayPal/CC fees? How many of the PayPal payments I receive ARE Credit Card payments, and how many are just inter-account transfers? These are all exciting and interesting tests for the growing business. Marie and I had geared up to study the activity this week. We are constantly thinking of ways to tweak the business model here and see what works and what doesn't.
As I said in my original post, it honestly had not occurred to me that PayPal would not reject payments immediately that they would not be passing onto me. They obviously know quite quickly as I reached my limit (they 'you have reached your limit' email, and the payment from the buyer that sent me over the limit, arrived within seconds of one another).
Unfortunately, my hands are tied: I must upgrade in order to process the payments that have been made. The customers apparently don't know otherwise. They'll be expecting their product from us in a couple of days. At least the first couple of PayPal payments I got following hitting the limit that WERE credit card payments (the non-credit card payments are flowing in to me in normal fashion) did NOT contain the auction and name/address information I am accustomed to receiving. I know WHO sent me money, and HOW MUCH they sent me, but I do not HAVE the money and I do NOT know what they are PAYING FOR. This may be a fluke, we DO have people who pay for items and don't tell us what they're paying for, but it initially appears I must upgrade to not only get the money but to learn what the buyers are paying for.
BTW You'll have to try harder than that to rattle me, CleverGirl, I've been doing this (and nothing BUT this) for a long time.
posted on October 18, 2000 09:01:45 PM new
Jay -- this is off-topic, but I'm sooooo curious! If you're Jay and your wife is Marie, who is Jereth? That's the name on your PayPal account, or it was when I bought a CD from you a couple of months ago.
posted on October 18, 2000 09:04:36 PM new
Jerry and Ethel Senese are my parents. They named me Jereth. I go by Jay. Typing auctions in the other window as we speak. Whaddaya want me to offer for a penny minimum bid tonight?...
posted on October 18, 2000 09:10:20 PM new
Aha... it kind of dawned on me that might be the case after I asked.
Your CD auctions are fun because of the penny minimum bid. I'm not a big CD buyer (my stereo hasn't even been hooked up since I moved in last January) but I like your interesting offerings. I bid on an Ultra Lounge CD the other day but was outbid (as usual).
posted on October 18, 2000 09:47:24 PM new
Macandjan -- yes, I know not all Power Sellers are head cases.
Jay -- not trying to rattle you, troll you, or anything else other than saying my piece. Glad you weren't offended -- tho I was fascinated by your comment about raising *postage* to offset PayPal fees. Maybe that doesn't fit the technical definition of *conniving,* but I find it distasteful if not deceitful in any case. OTOH, perhaps you're talking about handling fees and just misspoke. Doesn't matter, really. I have a thing about handling fees too.
posted on October 18, 2000 10:15:54 PM new
CleverGirl
so your against small businesses making money, or offsetting operation fees? if you compare the sellers on ebay with any other business on the net you'll find that they usually are far lower and most sit right at the actual cost.
but it's ok for big business to change their fee structure, or change the rules when they said they never would?
if your not paying a fee for the service and Jereth has to I guess you'll be steeling from Jereth, is that ok with you?? Jereth looks like in his last post he will be upgrading. I guess your sence of ENTITLEMENT is that you should get everything for free because your small?? you have less monies on deposit with PayPal and therefore they make less money off you than they do from someone that does more business??
posted on October 18, 2000 10:43:36 PM new
The problem, it seems to me, is that there is no way to tell Paypal to REJECT payments that you do not wish to accept. Paypal accepts the monies, with no kind of warning to the payer, and refuses to release it to the recipient. The payer thinks the money has gone through, but the transaction is stuck in limbo.
I think the moral (unless you plan on making yourself a test case) is to close your account NOW and remove the links from your auctions BEFORE customers get caught in the crossfire.
Just because we do business on the Web does not mean that we should allow ourselves to be victimized by "bait and switch." Paypal is a multimillion-dollar scam operation and you folks are empowering them.
