posted on May 23, 2001 10:17:25 AM new
I know the advantages to Paypal (convenience), but please list a point by point list of the NEGATIVES in accepting Paypal.
posted on May 23, 2001 10:23:34 AM new
You could start by checking out the PayPal forum- there are lots of messages there which detail users' experiences and opinions.
posted on May 23, 2001 10:31:46 AM new
Thanks, but I came here because I wanted the points listed in short form. It seems everyone over there is likely to go on rants about Paypal, and I don't want the long version.
posted on May 23, 2001 11:09:27 AM new
First of all, you addressed this post to paypal experts. There is no such thing. If you call paypal 6 times with the same question, and you are lucky enough to get an answer on at least half the calls, you will get three different answers, even if you speak to the same person.
The short answer is: Paypal is not a bank. Paypal is not regulated. They make up the rules as they go. Paypal has only two real customer service people and one of them is out on vacation. Just check the paypal section of this forum and you will see hundreds of folks who have had problems. Having a problem is not of itself a concern. It's the weeks to months they are waiting for an answer that's the problem. It's the fact that the Better Business Bureau gave them a bad rating months ago, they promised to fix it and they STILL have a bad rating. It's the fact that the only way to get their attention is to post a tirade here. Calling, emailing and faxing them doesn't help.
Why not sign up with a real bank like Citibank's C2it?
If you want more info on payment services, there are ratings on my site. I am not allowed to post the direct URL.
posted on May 23, 2001 11:49:49 AM new
To me the fact that someone can pay for a auction immediatley and now with pay pal debit card I can Access the funds immediatley is well worth the fee
I had a real merchant account for 15 years and beleive me pay pal fees are not out of line.
posted on May 23, 2001 11:54:00 AM new
short version of negatives:
1. They charge seller
2. They require seller be able to PROVE shipment was made-FOR ALL INTENTS AND PURPOSES THAT IS DELIVERY CONFIRMATION to get DC you must use a shipping method that allows it. That increases your shipping cost.
3. They are difficult to get ahold of if you have a problem.
4. If a problem should arise, they "FREEZE FIRST" and maybe ask questions later.
5. If a problem should arise, you will not be provided details in a timely manner and may be left feeling left "out of the loop". It can be a shock to suddenly find your account "restricted" and a canned message that your account is being investigated for "possible fraudulent activity" without an explaination as to exactly what is meant by that. You may NEVER be told. The fraudulent activity may be the fact someone paid YOU with a stolen credit card. Not your fault, but you are automatically lumped in there with the theif. Guilty until proven innocent.
6. Right hand does not always know what left hand is doing. Different answers from different people at different times of day, or days of the week.
7. Their "investigations" seem to take an unusually long time with no real FB as to progress or when to expect a solution.
8. They are not a bank and do not have to abide by banking rules/regs. (already stated)
9. They require your banking information to "verify" your account.
10. They do not seem to have a way to really protect you against someone using a stolen credit card. (so much for "verifying" users)
I know that sounds like a lot of negatives, but those are the one I have observed from following the threads on those who have had problems. Personally I have never had a problem. I prefer them to any other payment service I currently use. I do intend to check out C2it, but currently I believe PP is the most recognized Payment service to buyers and sellers alike.
[ edited by sulyn1950 on May 23, 2001 11:56 AM ]
posted on May 23, 2001 12:16:01 PM newThey do not seem to have a way to really protect you against someone using a stolen credit card.
How many people steal credit card information and have you ship to the credit card's billing address?
The confirmed shipping address is a hard obstacle for a credit card thief to overcome. If you ship high dollar items to somewhere other than the billing address when someone has paid with a credit card you've taken the risk. Sellers are given tools to protect themselves from stolen credit card use, not employing or ignoring those tools isn't PayPal's fault.
posted on May 23, 2001 12:27:34 PM newuaru-You are on the one hand absolutely correct. However, I have had a message from PP that the sender did not have a verified address. That turned out to be because they were new and had NOT had time to receive their snail mail letter and to complete the verification process. That can take quite a length of time. In my case I had two, business AND home. It took 26 days!
When a person is using an eCheck, the seller is notified to hold shipment until AFTER the transaction has cleared. I have had a few buyers upset because I wouldn't ship until the money was in my account, but I just explained I was following PayPal's instructions.
In the case of credit card use, you do NOT receive that same time of advisement. You just get the confirmation the transaction IS complete. Maybe it is, maybe it isn't. If it turns out NOT be be a useable card, overlimit, unauthorized ect., it can take more than 72 hours before that is even discovered.
I was only listing complaints that I have observed voiced by others, or have personally run into.
posted on May 23, 2001 12:34:03 PM new
I'm fully aware of all the horror stores that exist with paypal, but have to tell you that been using the service since inception without so much as a hickup. It seems to me that if you follow the rules and use common sense, you will not experience any problems. Have I been luck? I'm not sure, but can tell you I've accepted thousands of payments and I'm batting 1000%.
Premier business accounts also get $100,000.00 insurance protection.
posted on May 23, 2001 12:59:15 PM newuaru-You are on the one hand absolutely correct. However, I have had a message from PP that the sender did not have a verified address. That turned out to be because they were new and had NOT had time to receive their snail mail letter and to complete the verification process. That can take quite a length of time. In my case I had two, business AND home. It took 26 days!
The confirmed billing address isn't tied to the verification issue at all. If the buyer uses a credit card the credit card has a billing address that is supplied (unless the buyer chooses not to). If a person signs up with PayPal and 10 minutes later sends a payment via credit card funding the 'confirmed address' is available unless blocked by the buyer.
posted on May 23, 2001 01:13:50 PM new
Well, I was just going by what PayPal told me. Then again, I think my "number 6" probably applies here.
I am not trashing PayPal, I like PayPal, I have already stated I think it has the consumer recognizition that will keep it close to the top, if not the top. I also have never had a major problem with them. Just a glitch or two!
The poster asked for a list of the Negatives. I would assume to compare to a list of Positives. I was just trying to accomodate them.
posted on May 23, 2001 02:29:25 PM newThe confirmed shipping address is a hard obstacle for a credit card thief to overcome.
For a stolen credit card this is true. But a large percentage of credit card fraud involves identity theft, where a thief fraudulently uses another person's personal information to open a credit card account. The "verified billing address" is simply whatever address the thief uses to open the credit card account (usually a mail drop box). PayPal's "verified billing address" is only slightly more reliable then the useless "bank account verification to establish the user's identity".
posted on May 23, 2001 02:44:57 PM newa large percentage of credit card fraud involves identity theft
I've heard of identity theft, but I didn't know that was a large percentage. In the case of identity theft the person can use the credit card at any brick and mortar store and walk away smiling. Why go through the trouble of identity theft and then use it on mail order purchases? BTW, PayPal won't accept a P.O.Box as a confirmed address.
posted on May 23, 2001 02:53:21 PM new
Maplestar - My suggestion to you would be to sign up for paypal and check it out for yourself. If you don't like it than just close your account. There are too many people that post here that have their own hidden agendas (especially people who have websites devoted to trashing paypal while singing the virtues of another company).
posted on May 23, 2001 02:53:42 PM newBTW, PayPal won't accept a P.O.Box as a confirmed address.
No thief with half a brain would use a PO box to open a fraudulent account. He would use a mail drop which is pretty much anonymous. And PayPal WOULD accept a mail drop as a verified address because it looks like a regular street address.
Why would the thief use PayPal instead of buying at a brick and mortar store?
1) Internet transactions are for the most part anonymous (again, if the crook has half a brain).
2) The theif doesn't have to worry about being IDd by a cashier or caught on a security camera.
3) By the time the thief has been found to have stolen thousand$$, he can be long gone and none of his victims have ever seen or talked to him.
posted on May 23, 2001 03:02:12 PM new
BTW I'm not saying that PayPal is bad. I use them for dozens of transactions on a daily basis.
What I AM saying is that PayPal is less than candid in their answers to specific questions. And the originator of this thread asked for negatives in relation to PayPal. I could provide a whole list of positives as well.
PayPal and ONLY PayPal is to blame for all of the negative attention they earn on these boards.
They could:
1) Be straight-shooters who provide honest answers to specific, legitimate questions
2) Not try to insult the user's intelligence with double-speak
3) Handle customer service issues promptly through normal customer service channels at PayPal instead of heaping everything on Damon as the CS Rep of last (only?) resort
If PayPal could find a way to do these things, most of the negative posts about them on these boards would quickly evaporate and they could even earn a favorable rating from the BBB. Will they? Doubtful.
posted on May 23, 2001 03:31:04 PM new
You can have a confirmed address using a PO Box... I do.
The verified address is the billing address. yes you can get defrauded by a crook that stole an identity and set up new addresses... that's a pro and you're dead meat in that case or any case when you accept credit cards.
Yes, PP customer service sucks... but the service is remarkable and has transformed the way we do biz on the web and ebay.
For all it's negs, it is certainly an important, valuable and excellent tool. Especially now that they can do foreign transactions.
Paypal is bank regulated... as they purchased a bank in order to be able to run these cc transactions.
posted on May 23, 2001 04:11:15 PM new
OK, I'm an expert on nothing but here is my observation....
We have been PayPal registered for about 6 months now. So far, ZERO problems. None.
I have had money transfered to our bank in one day!
We just got our PP debit card and used it yesterday for the first time. Again, no problem.
We get payments faster no doubt. A big selling point when the bidder doesn't have to go get a money order for payment.
From our last couple weeks of auctions PP payments cover about 80%!
Sure, PayPal costs us a few $, no big deal. It's figured in with the cost of the item.
Also, PP sends out our customized invoice on every auction, and that saves me a lot of work! (we have a lot of BIN auctions)
For some PP is perfect, for others it stinks.
A lot like ebay.
posted on May 23, 2001 08:32:16 PM new
I dont think there is an expert on the subject.
I can however tell you a few things other have noted some.
1. They are not a bank or a card processor. They ARE a merchant. LEGALLY the consumer is doing business with them, not the seller.
2. Liability. Should ANY claim occur you agree that they arbitrate dispute. VERY dangerous legally. Should someone issue a claim for example that you sold them stolen goods you dont have a SINGLE leg to stand upon for example.
3. Their card processor, Chase, told us NO business entity should be using the service.
4. You SIGN OFF on all claims of libel towards service.
5. As others noted, when problems do arise... Good luck to your team. We have a merchant account. When PP deployed we called them 8 times with common questions. Each time we were placed on hold while someone was to get us a manager to answer questions and each and every time the phone was hung up followed by us calling back and being told we never called before.
6. This area is VERY VERY grey legally still. Should a cardholder end up in breach of contract for using third party payment YOU THE SELLER may be held libel for damages as you NEVER informed them (the buyer) of that possibility. Again, thats grey. An FTC rep told us that, yet an attorney said that WHOMEVER appears on a buyers card statement is lawfully who they did business with.
7. Allowing ANY party other than a QUALIFIED FDIC Insured processor/bank access to your account(s) is just nuts.
8. There is NO, NONE bill of consumer or sellers rights on site allowing "policy on the fly".
9. We have a 300+ page book on the various circumstances and how they are managed with our merchant account. Should we be defrauded, be given stolen cards whatall we have guidlines and RIGHTS, again, nothing like that at PayPal.
10. BOTH buyer and seller are FORCED by terms of service to not hold the service libel for ANYTHING other than processing error. For a business, thats just down right stupid to ever enter into.
11. You will NOT see Barnes & Noble, Gateway, Dell, Egghead.com or ANY branded name business on the web using the services as they know exactly what we do. They are NOT a bank, they are NOT a card processor and they ARE having you and buyers sign off on rights given you by your bank/bankcard company. So, when it comes to THEIR contract with YOU (the banks) they are fully within their rights to sue under breach of contract or seek damages as well as notating credit reports etc.
In the case of illegal use, in a court of law, not a leg to stand on. Someone can make a simple claim against you... You sent me stolen goods.
What is your response? No I didnt? The first thing authorities will be asking is WHY your selling things accepting payment (if you are a business) via a third party instead of getting a merchant account thus legitimizing your business.
For buyers its VERY simple... Can you walk into your bank that issued your debit or credit card and have them perform a charge to send the money to say me? The answer is NO, they WONT do it. They WILL do a wire transfer, they WONT charge a credit/debit card and transfer funds via card processing.
IF your bank WONT do it why in the world would ANYONE think its perfectly ok to do it via a third party?????
Simple... Because the service states NO PLACE what a buyers or sellers LIABILITY is in USING the service and thats EXACTLY why they have you sign off on libel in the terms of service.
In PP's defense its not their fault. The fact is bad buyers exist and bad sellers exist. Due to this both the buyer & sellers who are good place themselves at a considerable LEGAL risk with their banks and authorities and PP should NOT bare the burden of it. They provide a service. We wont use it for the same reasons you wont see Dell or Gateway or Barnes & Noble using it. We are not about to be put at a point of CONTROL or libel due to a service that wants to avoid it even if their reasons for avoiding it are perfectly legitimate.
What it comes down to in Terms of service is this: They are saying "trust us, but we are having YOU sign off on libel and your rights as a buyer/seller because we DONT trust you".
In other words they wish to bare no risk/responsibility other than that of THE CHARGE ITSELF. No responsibility if the buyer gets nailed to the wall by their bank or a buyer makes claim against the seller etc.
This is entirely reverse of most sites.
Sites such as say Egghead will enter into contracts of consignment. So you make a purchase and the moment THEY charge your card they OWN the goods even if they are being drop shipped by say us. So they perform the charge, they own the goods, thats a closed loop. PayPal consigns nothing thus they bare no responsibility for the goods be they legit, broken, stolen, illegal for import/export etc. YET LEGALLY in the US they are the MERCHANT not the seller. THEY made the charge not the actual seller.
For buyers the reality is simple, its the most unsafe way to buy on the net and its also another reason you wont see say Barnes & Noble using it. The federal government just scant months back made a statement about being SAFE buying on the net.
They stated simply, Credit cards are the safest way to buy on the net and ONLY when the entity you are buying from accepts credit cards DIRECTLY like we do, like Amazon does, like Gateway or buy.com does. I'll give you an even more odd example. When eBay takes you listing and commissions fee's can you pay by paypal? Nope. eBay isnt going to take that risk.
You cant walk into CompUSA, Walmart or again even the bank that issued the card and do it. Why would ANYONE think its perfectly OK to do it via third party. If we make a charge for something being sold by say you as a favor to you we can loose our ability to process credit cards. Why? Because its EXACTLY how fraud was widely perpetraited with mail order LONG before the web even existed. In THIS country (the USA) you PAY who you do business WITH *IF* you want your rights in place. OTherwise a consumer can make any claim against you and you literally dont have a leg to stand on. PayPal can (as a merchant) take your card payment as they are having you sign off on claims against them or the card processor. So thats a win win situation for them, not for the seller, not for the consumer. Again... things go perfectly smooth until they dont.
I personally dont shop much on the net, when I do I will only buy from places that accept my credit card directly as I know my rights are in place as are theirs. And when a dispute does happen its not some THIRD PARTY business (merchant in this case) making decisions regarding my finances, my credit ratings & reports. Thats what my bank is for! And if ANYONE thinks a bank will NOT take issue with a third party arbitrating disputes with THIER services and in case of credit THE BANKS money they are nuts. A bank can literally sue over breach of contract, go direct after the TRUE seller in a court of law and totally destroy a persons credit.
OOOO!!!! Sounds like rippin'. Its not. This exact scenario happened to one of our best customers. She bought goods from a seller at eBay. Got hosed goods. She complained to paypal who told her complain to eBay. She complained to eBay who told her file a insurance claim or work it out with the seller or paypal. She filed a claim which was denied as the seller proved shipment and delivery. However, her GOODS were totally HOSED. She took the next logical step to get her $300+ back and filed a dispute with her bank. Her bank 2 weeks after issued certified mail to her citing breach of cardholders contract and fining her $500. They called in her full $4500 balance due and noted all three major credit reports with breach of contract. When those notations go on credit reoprts thats a kiss of credit death. It tends to cascade so when other banks do their audits and see it they can classify her as a risk and up their rates, or enact any portion of their contract. EVERY credit card allows for the backing bank to call in balance due basically anytime they wish.
So... no... its not "ooooo" sour grapes.
As a seller we are afforded MUCH more protection as are our buyers under OUR mercahnt account than they or we would ever get via a third party payment service.
We know several sellers who lost merchant accounts due to fraud and too many chargebacks that are right back at it using PP. We even wrote PP informing them as we grow tired of customers emailing us yelling about other sellers activities and WHY should they trust us? The sellers are STILL at it and in the case of one of them they have had no less than 14 accounts we found em' selling through.
eBay DOES react but cannot stop people from using external services. Have you EVER saw eBay recommend using PP? Ever? Here eBay itself is damaged due to the ease of being taken by such venues and people just keep on at it.
I can tell you defacto if I were a "Buyer" ANY seller taking PP payment I could rip-off knowing what I know and the way cards and law work pertinent to them. I also know as a seller its quite easy. Here... Ship an empty box with delivery confirmation and signature required. That easy.
If eBay went away tomorrow so would PP. You wont see a single known web business using it as they know at this point in time its just too wide open and too grey for business and consumers to safely use.
Again, its not paypals fault at all. But the fact is bad buyers and bad sellers exist and thats where the problems are and when trying to get your rights AFTER the fact thats when you find that you waived your rights. Most people dont even read the terms of service more or less understand them. They dont realize whats MISSING as well as to THEIR rights. We have asked MANY times in various forums that PP put out a complete bill of consumer/seller rights on site and HOW common circumstances such as stolen cards, false claims etc. are handled. Not a single response, not once. The only reason I can see for this is IF they DO put those out there then THEY loose control over making arbitrary decisions. If they TRULY cared about the sellers and buyers like eBay truly does no person would HAVE to ask them, it'd be there just as it is from eBay.
Would you buy from me if I said, please sign off on this document that voids us from any liability? Of course not.
Further if they TRULY wanted to create REAL protection they would consign goods. Just like First Auction, Onsale, iDeal, uBid and others. So THEY charge your card (they are the merchant) and when that charge goes through they OWN the goods. Now if the consumer gets hosed goods, nothing at all whatever its between PP and the seller who broke the consignment terms.
In some regards it mute. Visa, M/C, Discover & Amex are going to be changing the face of how cards get processed REQUIRING that ALL card holders make payments DIRECT to card procesor gateways. This will effectively kill third party payment services as banks are quite tired of fielding and eating the problems created by consumers NOT using cards proper.
To attain a REAL merchant account it requires a qualifications process thats quite ridgid and requires disclosure of credit, taxes, finances, points of sale and more. Even pictures of offices and inventories. PP nullifies this entire process so why would ANY consumer think their bank will stand behind em?
The fact is most banks if they KNEW you were going to do this would never issue a card to you to begin with. You are INSTANTLY a MUCH higher risk to them. So when it comes to a dispute that involves YOUR bank you can forget it, dont even bother to try. You have lost before you started and the penalties are libel to be much worse than the money you lost.
As a seller should authorities enter into a transaction for any reason, again, just give up. You dont have a leg to stand on. You took payment via a third party from a consumer who used bank services via a third party payment service. YOU as the seller agreed to not hold the payment service libel. They can PROVE they did money transfer and legally ANY claim the consumer makes will stick.
If you dont believe this stuff its simple. Ask the FTC, your states banking commissions or in the case of a buyer ask your cardholders bank services... Can I have a third party perform a charge to my card for merchandise I am buying from another party completely who is NOT a business or has no merchant account to accept my payment". Some banks will say its fraud, defrauding the bank others will say its a breach of cardholders contract subject to fines PER INCIDENT and they can call in full balances due, notate credit reports and/or bring the matter into a court of law. The cardholders contract is between the card holder and the bank, NOT the consumer and PP.
This is EXACTLY why the fed just made the statement that IF you buy online USE your credit card and ONLY with merchants who are approved to take your card DIRECTLY. This way if the law need be involved you PAYED who you DID BUSINESS WITH. In the case of PP you are paying them, THEY ARE THE merchant NOT the person your selling from and again thats WHY they have you sign off on libel towards em' and probably why no true bill of rights exists on the site.
posted on May 23, 2001 09:27:27 PM new
5 pages of highly unlikely if's.
Consider for the moment that you might be sued, for doing exactly what you're doing right now, reading AuctionWatch.
If you were sued for that, you would need a lawyer, which would cost thousands of dollars, even if the case didn't go to trial. If you went to trial, you could lose your house to the lawyer, even if you won the case.
posted on May 23, 2001 09:34:26 PM new
A buyer paying by credit card through Paypal gives up no credit card protection. None.
There is no difference in one's rights paying by credit card directly to a merchant or paying by credit card through PayPal.
Or other ways to say it.
To suggest otherwise is deceptive.
Paypal offers ADDITIONAL protection, and offers to help resolve disputes in some cases, making formal credit card disputes unnecessary.
For merchants, the Paypal system is vastly more protected from chargebacks than an ordinary merchant account. Follow the rules, no chargebacks. It's that simple.
posted on May 23, 2001 09:50:13 PM newPaypal offers ADDITIONAL protection, and offers to help resolve disputes in some cases, making formal credit card disputes unnecessary.
Yeah, right! Do you even realize how ridiculous this statement is? I would venture a guess that even the reasonable PayPal cheerleaders would have a hard time agreeing with you here.
PayPal's strategy in the case of disputes is to drag their "investigation" out so that after they finally get around to telling the bidder "sorry, nothing we can do", it's too late to do a charge-back.
I know this.
You know this.
PayPal Damon knows this.
