posted on December 20, 2000 10:15:35 PM new
Hello again everyone. I've read many threads and posts regarding how sellers have had numerous problems with paypal. I recently started using paypal to pay for auctions I've won and am wondering if, as a buyer, I need to be concerned with using paypal. Any thoughts?
posted on December 20, 2000 10:38:28 PM new
I think the important thing is to not leave any money in a Paypal account:
1. Paypal accounts are not FDIC insured.
2. Paypal has a policy of freezing acounts for arbitrary reasons. Did you catch the thread where if a buyer initiates a chargeback on his credit card Paypal's reaction will be to freeze the buyer's Paypal account?
Otherwise you just need to be cautious; for example scammers email buyers trying to get them to pay money to a phony address. And I wouldn't depend too heavily on Paypal's transaction guarantees.
posted on December 20, 2000 10:48:13 PM new
Yes, I would be concerned as a buyer. Here's why: PayPal is notorious for freezing sellers' accounts. Any seller's account could be frozen at any time for reasons that are not necessarily the seller's fault. As a buyer, you may not think that concerns you, but think again- it just might.
Say you buy from a seller, pay that seller by PayPal, and then the seller's account gets frozen. The seller will not be able to access your payment. Do you really think a seller is going to ship your item under those circumstances? I wouldn't bet on it. Some sellers might, out of good faith and an interest in keeping you happy. But I'd say, the higher ticket the item is the less likely the seller is to ship to you until they are assured of getting the money. So then there you are, waiting right along with that seller, for his/her account to become unfrozen- and it could take a LOOOOOOOOOOOONG time.
When PayPal freezes accounts, they don't even have the decency to block incoming payments. I don't think that's cool.
This is my opinion, but you can take it for what it's worth since I don't use PayPal, never have, & never will.
posted on December 21, 2000 04:32:16 AM new
IMO...
If a seller accepts credit cards directly, this is the best way to pay. It preserves your right to dispute the charge directly, should a problem arise.
posted on December 21, 2000 06:24:29 AM new
I used to tell buyers that when you pay with paypal, consider it as if you were sending cash. Don't expect any protection. If the seller has a good rating and you can trust him, then fine. But I have heard from sveral sellers with excellent ratings who have been on ebay for years. One single customer makes an unfounded charge back or one single crook uses a stolen CC and that seller's entire account is frozen. Payments come in which the seller can not refuse or refund. It happened to a seller I know who specializes in digital cameras and another who sells computers. Do you really expect a seller to ship thousands of dollars in product without getting paid? So the money sits frozen in a PP account. Neither the buyer nor the seller can touch it. The seller tells PP repeatedly to refund but they refuse. PP tells the buyer that in 180 days (that's almost half a year!) they will refund.
So it's not like sending cash. It's like throwing cash out the window and hoping the wind takes it to the right address.
As for the comment that only a small drop in the bucket has had a problem, Damon from PP has repeatedly stated that "only" 4% have had problems. That's 200,000 people, based on PP's 5 million accounts. If 4% of my customers had complains, I would be out of business. The real problem isnt just that PP has problems - it's that they refuse to admit there's a problem and keep making excuses for why this continues to go on.
posted on December 21, 2000 07:20:34 AM new
My biggest gripe about PayPal from a buyer's perspective is their decision to set up the "Send Money" feature to automatically default to pull money from your bank account, if you are "verified". I set up my PayPal account in order to be able to use my CREDIT CARD to pay for things. I gave them my bank account information because I'm also a seller and I wanted to be verified so I qualify for the Seller Protection, and so I can do electronic transfers FROM PayPal INTO my bank account (which they expressly prefer, rather than sending me checks). I feel that we, as the users, should be able to choose a default source of funds, if we're not going to be specifically asked during the course of each "Send Money" transaction.
posted on December 21, 2000 07:52:04 AM new
Pocono: Your message in praise of Paypal shows just how bad they are.
>>The buyer never contacted me, and it was a low priced item sent US Mail with no tracking or insurance. <<
The customer never contacted you. It is PP's TOS that he has to. So the customer and PP violated their TOS.
>>PayPal told me I had three whole days to respond with my side of the story, or they would reverse the charge. I did, and told them to simply reverse the payment. They did. End of story. Smmoth as silk, no problem, no hassle, no frozen account, nothing! <<
It was only "smooth as silk" because you chose to refund. Had it been a $500 item, would you have done so? Probably not. Then, despite the fact that the customer and PP violated TOS, YOUR account would have been frozen.
>>Just a professional approach on PayPals part to resolve a customer dispute. <<
No, just a lazy approach by an uncaring company that will stick the seller even if the seller follows their ever-changing rules.
>>The only problem here is, there are a select few who continue to shout fire over some personal ember they have with paypal. <<
According to PP's own numbers, there are a "select few" of 400,000 who have the crazy idea that acompany should follow the very rules they put up on their site. Incidentally, I have no "personal ember" since I have never had a problem with them. But I know lots of folks who have who are experienced sellers with excellent ratings or very good customers of mine.
>>I wish someone would dedicate their life to HAPPY paypal customers<<
I hope not because I think PP's life won't last as long as any of us unless they make drastic changes in their policies, like following their own rules.
posted on December 21, 2000 08:32:10 AM newI think Paypal is FDIC Insured.
Think again. PayPay is NOT FDIC insured.
It does offer $100,000 of insurance through Traveler's. But it only covers you if your
account is hacked or your password is stolen.
There's no insurance to cover you if PayPal goes out of business/declares bankruptcy.
In that event, PayPal accountholders would have to stand in line behind other creditors.
posted on December 21, 2000 09:08:57 AM new
Wow, I have to admit that I'm really not sure how I will proceed on the next aution I win (when the seller accepts paypal). There have been convincing arguements on both sides of the "use it" or "don't use it" approach to paypal. To date, I have used paypal to pay for five auctions and have not yet experienced any problems so my inclination is to continue to use it. However, at this point I think I'll err on the side of caution and only use paypal for "small ticket" items. Or not, I'm just not sure!
posted on December 21, 2000 09:33:21 AM new
I use PayPal all the time. I never keep much money in there and would not recommend that anyone do the same.
I have had absolutely no problems beyond the usual busy site one.
It's a dream not to have to go to the bank when payments show up or to get a money order.
posted on December 21, 2000 09:48:31 AM new
I use PayPal quite a bit, but I too am careful not to leave too much in there. I recently started listing BillPoint first in my EOA, and surprisingly the BillPoint payments are going up, although the PayPals still come in quite regularly.
I haven't had any problems (knocking on wood). I think they're too popular to go belly-up... my guess (my hope) is that a smart, reputable company (maybe a bank?) will buy them out and manage it properly.
posted on December 21, 2000 10:05:25 AM new
I've had over 200 paypal transactions in the past year and a half, with not one problem. I am sure at least some of the persons who have complained here about Paypal have valid complaints, but I have no real faith in extremists who consistently compare using Paypal to being murdered or mugged. My boss isn't FDIC insured either, but I trust him to pay me every Friday. If he doesn't, I'm out of luck, but since his track record with me has been completely consistent, I'm not going to insist he pay me every hour or quit my job. I really have no idea how many levels of incompetence the "bad experiences" here are posted through----just like you don't know mine. We all have to use our best judgement.
Also, if only 4% are complaining, they're doing great for a credit-related company. My mother worked in the credit industry and the complaint factor is generally sky high. In other industries I am familiar with, such as retail sales in large department stores, the return rate can go from 10-33% ! I bring up return rate because I believe it's directly related to dissatisfaction/complaints.
I don't think those types of numbers can be compared to any individual seller's numbers ("If I had a 4% complaint rate, I'd be out of business" People who have a bad transaction with a seller might leave a negative or complain but they are also very likely to just say "Oh well" and shrug it off, since the perception of Ebay sellers is as individuals, not corporations with a high level of responsibility to their customers. (Note that I'm not saying this perception is right or wrong, but I have some experience with marketing and I know that whoever has the deepest pockets gets the most complaints). I doubt that most buyers complain to Ebay sellers as easily as they would complain to a corporation for which they have a stronger expectation/trust level with.
By the way, you might want to put "Achex" (which I don't use and don't know much about) on your "Credit Baddies" list...they just got a major thumbs down on dot-com insider site F***edCompany.com.
posted on December 21, 2000 10:18:13 AM new
>>Also, if only 4% are complaining, they're doing great for a credit-related company. My mother worked in the credit industry and the complaint factor is generally sky high. In other industries I am familiar with, such as retail sales in large department stores, the return rate can go from 10-33% ! I bring up return rate because I believe it's directly related to dissatisfaction/complaints. <<
The return rate is the rate individual items are returned to a store. I have returned items to a store but continue to shop there. The 4% rate Paypal boasts of, is the 4% of folks who have complained that they will never use PP again. It is possible that 4% of my customers have returned an item, but if 4% of my customers are disgruntled and telling others not to patronize me, I would be out of business pretty quickly. Taking a look at auction ratings, I dont think most of us would bid on a seller who has 4% negs. Particularly if those negs were for non-delivery (as in freezing accounts and unwarranted charge backs).
>>By the way, you might want to put "Achex" (which I don't use and don't know much about) on your "Credit Baddies" list...they just got a major thumbs down on dot-com insider site F***edCompany.com.<<
They were mentioned as having cut back around 20% of staff because they are not doing as well as expected. This does not make them a bad company or one not to be trusted. Achex takes money from a buyer's bank account and sends it to a seller's bank account via the federally regulated ACH system. They do not hold it in their account. They have none of anyone's funds to freeze. If they do go belly up, their customers will not lose a dime. If a company can't be trusted just because it's losing money, then PP has probably lost more than any other payment service. They hope to be profitable in about 2 years.
posted on December 21, 2000 10:21:46 AM new
"only" 4% have had problems. That's 200,000 people, based on PP's 5 million accounts."
...and that's just currently. Next month could be another 5000 people experiencing problems, and the next month another 5000. It's really a flawed business right from the start. They should have made a clear offer for a one month free trial, after the one month automatically instate a yearly membership fee of $50 for business accounts, and $15 for personal accounts, plus another upgrade for those with substantial business. They'd have lost some customers, but would have kept a loyal and happy followers, and made another source of revenue. Now they have lots of disgruntled memebers.
For a buyer, I don't see any problems. If a sellers acount is frozen, the seller still received the money, and they still have to send your item. I'd presume the Seller still recieves an email that they've received cash despite that their account is frozen. If not, I'd say paypal is really committing suicide. It's already borderline fraud that paypal allows sellers to accept money, but not access it if their account is frozen.
posted on December 21, 2000 10:32:13 AM new
>>For a buyer, I don't see any problems. If a sellers acount is frozen, the seller still received the money, and they still have to send your item. I'd presume the Seller still recieves an email that they've received cash despite that their account is frozen. If not, I'd say paypal is really committing suicide. It's already borderline fraud that paypal allows sellers to accept money, but not access it if their account is frozen. <<
When an auction ends, the seller has no obligation until he has received the payment.
When a buyer pays by check, seller has the right to hold that check until it clears. When a buyer pays by Paypal, why does he have to ship if he can't access the money? Maybe PP will give it to him and maybe not. Maybe the buyer will charge it back. Until he can access that money, he has not received it. Paypal has received it, not the seller. I advise sellers who have had their accounts frozen to put in their EOA letters "do not pay with paypal. if you do, you will have to deal with paypal or wait 180 days to get it back." I also advise them to tell their buyers who have done so to wait 180 days or charge it back. I sell expensive items and if this ever happened to me, I will not place myself on the hook. Paypal's criminal behavior is not my responsibility.
posted on December 21, 2000 11:25:30 AM new
I've used PayPal for almost a year. I'll continue to use PayPal. The company's goal in November of 1999 was to get 1 million customers by the end of 2000. They reached 5 million customers and over half of the auctions I visit accept PayPal as a method of payment.
I've found the message board on AW does not accurately reflect the popularity of the service. I've even seen 'warning web sites' and have stooped to half truths, lies, and the tactics of supplying rumors in the hopes of discouraging it's use, all unsuccessful. Other companies are trying unsuccessfully to attain PayPal's acceptance, even BillPoint, eBay's own service is a fraction of PayPal's acceptance.
Look on eBay at PayPal's acceptance, that speaks volumes.
posted on December 21, 2000 11:27:10 AM new
Forget what everyone else is saying, if you think so many people are just screw-ups with a bone to pick. Just go read Paypal's Terms Of Use.
Paypal's terms now state that you can FORFEIT all the money in your account if you make a chargeback, or if there is "suspicious activity" or for any number of reasons. Basically, they're saying that they can grab your money at any time for no reason at all. Before you decide on Paypal, READ their terms. But remember those terms change day to day, without notice, and rarely in the customer's favor.
Those who have been on these boards longer can remember the litany of lies Paypal has offered. To some that's acceptable, but not to me. Have you forgotten "no one will be forced to upgrade?" Right. You only have to upgrade if you want to get your money. Paypal is a crook selling a $50 Rolex. Yeesh! Who would do business with them at all?
posted on December 21, 2000 11:47:35 AM newYeesh! Who would do business with them at all?
Me. Why? Because I get about 60% of my payments via PayPal, 20% (and climbing) through BillPoint, and 20% still send snail-mail payments. It's obviously still the prefered method of payment by my customers, so I'd be a fool to say no to it. I am cautious and keep very little in the account, but I don't think the sky is falling.
It's really quite simple. If you like it, use it. If you don't like it, don't use it. Why so many have a problem with that, baffles me daily.
posted on December 21, 2000 12:01:21 PM new
It must have been mentioned earlier in another thread, but PayPal users must consider that the term "account" differs from the definition of account under banking regulations.
posted on December 21, 2000 01:16:02 PM new
So from a buyer's perspective, it seems that the major item of concern would be my seller's account getting frozen (for any of the reasons stated in this thread), thereby not allowing my seller to access my payment, thereby not sending my item. As I am new to the whole paypal experience, I can't understand why a sellers ENTIRE account would be frozen if there was a problem with a single credit card. Since that apparently is paypal's policy, I will definatley look for alternative methods (perhaps contacting the seller and paying directly with my credit card) if I'm purchasing from a high volume seller. It stands to reason that the more paypal transactions a seller has, the more likely that seller may encounter a problem with one of their paypal paying customers. Of course, even a low volume seller may encounter problems but I will probably be more comfortable using paypal with a low volume seller.
Please punch holes in my thinking if I am off-base here. Thanks again for all the responses!
posted on December 21, 2000 01:33:00 PM new
That's a well thought out position, IMHO. The major risk with PP from a buyer's perspective would be unknowingly sending payment to a frozen account, assuming that one adopted a policy of only dealing with verified sellers and following all the constraints of the Buyer Protection plan. It's important to note that, unlike Ebay's fraud protection, PP's only covers cases of non-receipt. If you get SOMETHING for your money, PayPal will not process a fraud claim, even if it's not what you bought.
People who have a bad transaction with a seller might leave a negative or complain but they are also very likely to just say "Oh well" and shrug it off, since the perception of Ebay sellers is as individuals, not corporations with a high level of responsibility to their customers. (Note that I'm not saying this perception is right or wrong, but I have some experience with marketing and I know that whoever has the deepest pockets gets the most complaints). I doubt that most buyers complain to Ebay sellers as easily as they would complain to a corporation for which they have a stronger expectation/trust level with.