Paypal...grrr.

Business By Kitagrl Updated 7 Jun 2011 , 2:30pm by cownsj

Kitagrl Posted 2 Jun 2011 , 9:38pm
post #1 of 38

I've been a member of Paypal for about 10 years now (wow! Started doing Ebay back then) and now have used it over 3 years for my cake business.

The other day a lady sent me a deposit and Paypal held it...opened a dispute, saying they think the payment was unauthorized by the buyer...and then refunded her money, even after I sent emails explaining that it was a deposit for a local purchase. When they refunded it to her, they said I needed to have better business practices like shipping promptly, and etc. (form letter, of course)

The lady told me she got a letter from Paypal saying they were doing random checks on transactions and putting her account on freeze until they are done. So now, she's going to send me a check instead.

I'm in the process of sending them irate emails (Paypal) explaining that its pretty lame that I've been an upstanding member for 10 years and they just think they can take my deposit from me and disrupt a local business transaction (that does not involve shipping goods) for absolutely no reason whatsoever.

Since when do they do this stuff?

37 replies
jason_kraft Posted 2 Jun 2011 , 9:50pm
post #2 of 38

Since PayPal was founded I've heard horror stories about accounts being frozen and transactions being reversed. They are technically not a bank so they are not bound by regulations governing real banks, which means they can pretty much do whatever they want. Some people have had their entire accounts frozen for weeks, leaving them unable to pay bills or run their businesses. The really unlucky ones have had PayPal grab money from their linked bank accounts to cover reversed transactions, it can take months to resolve these situations.

We only accept PayPal as a last resort (for example, when accepting orders from people outside the US) and we always transfer the payment out of PayPal immediately. We also make sure the bank account linked to PayPal is as empty as possible. If you want to accept payments electronically I recommend discontinuing PayPal and switching to something like SquareUp to accept credit cards.

Kitagrl Posted 2 Jun 2011 , 9:53pm
post #3 of 38

What is SquareUp? Haven't heard of that...

Well in 10 years I've only had one major problem (that was solved in about a day, with a phone call) and then a few minor problems that were also solved fairly quickly. This particular problem is the longest one, and the least logical...very random.

I did look into having my business bank provide a way to accept credit cards but they said I don't use it enough to make the fees worthwhile.

jason_kraft Posted 2 Jun 2011 , 9:55pm
post #4 of 38

https://squareup.com/

Accept credit cards on your phone, pay 2.75% per transaction with no minimums or extra fees.

Kitagrl Posted 2 Jun 2011 , 10:23pm
post #5 of 38

I don't have data on my phone....but can I take payments online through my website?

Something like that might be nice instead of juggling two accounts...although I've had Paypal for EVER....

jason_kraft Posted 2 Jun 2011 , 10:29pm
post #6 of 38

You can accept credit cards without swiping, but it's more expensive (3.75% + 15 cents) and card-not-present transactions are easier for buyers to dispute, so it's not recommended. The Square reader works with an iPod Touch or iPad over wifi, and if your phone supports wifi you should be able to use it without paying for a data plan (as long as it's an iPhone or Android phone).

If we ever decide to accept credit cards for our business I'd jump at the opportunity to buy a tax-deductible iPad. icon_wink.gif

I don't believe it integrates directly with web sites, for accepting credit cards directly online one option is Google Checkout, it costs 2.9% + 30 cents (less for higher volume). But again that's a card-not-present transaction, if you will be meeting the customer in person you should try your best to get an actual swipe.

Kitagrl Posted 2 Jun 2011 , 10:30pm
post #7 of 38
Quote:
Originally Posted by jason_kraft

You can accept credit cards without swiping, but it's more expensive (3.75% + 15 cents) and card-not-present transactions are easier for buyers to dispute, so it's not recommended. The Square reader works with an iPod Touch or iPad over wifi, and if your phone supports wifi you should be able to use it without paying for a data plan (as long as it's an iPhone or Android phone).

If we ever decide to accept credit cards for our business I'd jump at the opportunity to buy a tax-deductible iPad. icon_wink.gif




Hmmm. Well I rarely see the cards...they usually just pay online....since I work from home.

My phone is only texting/calls...not a smart phone. icon_smile.gif

Looked kinda cool though, maybe keep in mind for the future.

ladij153 Posted 2 Jun 2011 , 10:52pm
post #8 of 38

Just an FYI on PayPal....I've been using them for years paying for ebay and other online purchases. I haven't had any problems with them. They do hold transactions sometimes tho on refunds til the funds clear the bank or card. Ebay bought Paypal a couple years ago so they require all transactions to go through paypal now. If you want to pay with a card directly to the seller you have to contact the seller and arrange the alternate way of paying.

yummy_in_my_tummy Posted 3 Jun 2011 , 2:58am
post #9 of 38

I used SquareUp too. I just got it in the mail last week and I did my first transaction, I love it!

Kitagrl, you should look into the cost of upgrading to a data plan - they might even throw in the phone! SquareUp is REALLY worth it!! They don't hold any of your money, it just dumps into your bank account that night icon_smile.gif

Kitagrl Posted 3 Jun 2011 , 3:02am
post #10 of 38
Quote:
Originally Posted by yummy_in_my_tummy

I used SquareUp too. I just got it in the mail last week and I did my first transaction, I love it!

Kitagrl, you should look into the cost of upgrading to a data plan - they might even throw in the phone! SquareUp is REALLY worth it!! They don't hold any of your money, it just dumps into your bank account that night icon_smile.gif




Not yet...our phones were just upgraded a few months ago so we are not up for a new one for another year and a half...plus, for my hub and I both to upgrade would be an add'l $60/month or so...we don't want to pay that out right now.

I'm kind of in a groove with Paypal so I'd have to find something I REALLY like to change... someone told me about FirstData, might look into that as well...dunno...

cownsj Posted 3 Jun 2011 , 3:12am
post #11 of 38

I'll be anxious to know if the customer actually sends a check. It is possible the woman had second thought and contacted paypal and filed a complaint knowing that if she just said she wanted to cancel an order they may not back her, but this way they would. So I'm just anxious to see if she does send a check.

Kitagrl Posted 3 Jun 2011 , 3:14am
post #12 of 38
Quote:
Originally Posted by cownsj

I'll be anxious to know if the customer actually sends a check. It is possible the woman had second thought and contacted paypal and filed a complaint knowing that if she just said she wanted to cancel an order they may not back her, but this way they would. So I'm just anxious to see if she does send a check.




I think she will, she's been in close contact with me and we've worked out a sketch and she's approved the sketch and requested changes....I have no reason to believe she reversed payment....we'll see. She replied just today...if she changed her mind, she would not have offered to mail a check, I'm sure...plus, Paypal held the payment immediately, it was actually never cleared into my acct to begin with.

cownsj Posted 3 Jun 2011 , 3:43am
post #13 of 38

I'm glad to hear that. I'd hate to think you could spend all that time and energy with someone and have it just go away. UGH. I would think paypal would only listen to her and if they froze her account, yeah, I'd be anxious to get a check out while fighting with paypal.

My one issue with them, was actually to my benefit. I bought a
"Beatles album" through ebay, and the guy instead sent me a bootleg cd. I'm not really paying money for that, so I complained to paypal and they got my money back for me, but the "investigation" took almost two months to complete and then get my money back. But I did get it.

MrsBowtiy Posted 3 Jun 2011 , 3:49am
post #14 of 38

Okay I am not a business but clicked on your post from the main page and on my computer Paypal is the ad at the top just thought it was kind of ironic. And Paypal just froze my husbands account has used it for years for his hot rod business, they said that they couldn't verify who he is, we have sent every document that they have asked for a couple of times and they still won't unfreeze his account. Anyway Good Luck I hope you can get it all worked out.

Bluehue Posted 3 Jun 2011 , 4:12am
post #15 of 38

Kitgirl - have you or do you offer direct deposit into a business acount for your customers?
Whether it be for the deposit or final balance owing.


As long as they have the
Account # -
BSB # -
Invoice Ammount and a Referance # (that comes from you) its cash in your bank the next day....and so very easy to track.

ie: if my customer is called J.Smith and its her first order with me then my referance is .....J.Smith 01 - 02.06.11.
I just forward those details to her - whether by email or over the phone.



So very easy and you can check the next day as it shows up on your online bank statement.

As soon as i see their deposit - i send a reciept via email to them.

No fees - no messing around - no drama with monies being held - and no having to verify who you are to pay pal or anyone else.


Bluehue

FromScratchSF Posted 3 Jun 2011 , 6:02am
post #16 of 38

iva had so many problems with paypal i refuse to use it. many people actually refuse to use it.

i use Google merchant. like paypal only 10000000000 better. check them out. they handle chargebacks and disputes totally different then paypal - they take the merchant side 1st. they also have an actual customer service department that will actually email you back. about the same cost as paypal. i email invoices to my clients, they click on the link and pay.

anyway they rule.

KalisCakes Posted 3 Jun 2011 , 6:19am
post #17 of 38

I was going to suggest google merchant as well. I actually use both when necessary, though I try very hard to stick to a cash/check only policy. And when I do have to accept a CC payment, I charge a 3% processing fee; 1) because they charge me, and 2) because I have to wait for the money to transfer over from my paypal/google acct to my bank account.
I have quite a few friends that are business owners that use SquareUp; they really enjoy using it.

scp1127 Posted 3 Jun 2011 , 7:54am
post #18 of 38

That processing fee is illegal. You may want to look into that.

Bluehue Posted 3 Jun 2011 , 8:30am
post #19 of 38
Quote:
Originally Posted by KalisCakes

I was going to suggest google merchant as well. I actually use both when necessary, though I try very hard to stick to a cash/check only policy. And when I do have to accept a CC payment, I charge a 3% processing fee; 1) because they charge me, and 2) because I have to wait for the money to transfer over from my paypal/google acct to my bank account.
I have quite a few friends that are business owners that use SquareUp; they really enjoy using it.




Are you allowed to put yout own % on ?
There are regulations here stating what % can be added and what can't.

So many variations between our Countries.

Bluehue

jason_kraft Posted 3 Jun 2011 , 2:17pm
post #20 of 38

Have you considered just not accepting paypal or credit cards at all? If you consistently book up in advance that means you are in demand, and customers will still book with you if they have to write a check instead of using a card. You can then keep the card processing fees for yourself.

Kitagrl Posted 3 Jun 2011 , 2:23pm
post #21 of 38
Quote:
Originally Posted by jason_kraft

Have you considered just not accepting paypal or credit cards at all? If you consistently book up in advance that means you are in demand, and customers will still book with you if they have to write a check instead of using a card. You can then keep the card processing fees for yourself.




Its just easier for deposits and even final payments, especially because for final payments I prefer to have all the money right there rather than hope a check clears.... because for final payments, they are due only 10 days before the date. If I nixed cards I'd probably have to change my entire payment system...but its something to keep in mind if I continue to have issues with Paypal.

I still get checks and cash but I find online payments to be very convenient for customers, and myself as well.

jason_kraft Posted 3 Jun 2011 , 2:27pm
post #22 of 38

In 3 years and 600+ orders we've only had 2 or 3 instances of checks not clearing, and in all cases the customers reimbursed us plus the NSF fee.

The way I look at accepting credit cards is that it's equivalent to having 3 out of every 100 customers bounce a check with no hope of recovering the funds.

Kitagrl Posted 3 Jun 2011 , 2:31pm
post #23 of 38
Quote:
Originally Posted by jason_kraft

In 3 years and 600+ orders we've only had 2 or 3 instances of checks not clearing, and in all cases the customers reimbursed us plus the NSF fee.

The way I look at accepting credit cards is that it's equivalent to having 3 out of every 100 customers bounce a check with no hope of recovering the funds.




Hmm.

Its definitely something to think about. Hmm.

julzs71 Posted 3 Jun 2011 , 2:47pm
post #24 of 38
Quote:
Originally Posted by FromScratchSF

iva had so many problems with paypal i refuse to use it. many people actually refuse to use it.

i use Google merchant. like paypal only 10000000000 better. check them out. they handle chargebacks and disputes totally different then paypal - they take the merchant side 1st. they also have an actual customer service department that will actually email you back. about the same cost as paypal. i email invoices to my clients, they click on the link and pay.

anyway they rule.



That may not be allowed, but you can give a price for the cake then offer a cash discount......don't take my word for this.

Kitagrl Posted 3 Jun 2011 , 2:51pm
post #25 of 38

I just consider my fees to be part of my business loss, same as buying ingredients, cake boards, boxes...anything that it costs me to do the cake that comes out of my pocket. The fees are the same way.

FromScratchSF Posted 4 Jun 2011 , 12:23am
post #26 of 38
Quote:
Originally Posted by julzs71

Quote:
Originally Posted by FromScratchSF

iva had so many problems with paypal i refuse to use it. many people actually refuse to use it.

i use Google merchant. like paypal only 10000000000 better. check them out. they handle chargebacks and disputes totally different then paypal - they take the merchant side 1st. they also have an actual customer service department that will actually email you back. about the same cost as paypal. i email invoices to my clients, they click on the link and pay.

anyway they rule.


That may not be allowed, but you can give a price for the cake then offer a cash discount......don't take my word for this.




????

what about that would be illegal? not to be snarky, but i'm sure google made sure their merchant services are legal prior to offering it to the public. i prolly should have stated that the invoice is generated via google merchant. i think i have greater protection because i never get a hold of the customer's credit card or personal information. i happen to love that bit - i don't have secure trash, last thing i need is to toss someone's credit card info on accident and have some crack head jack it from the dumpster... ug. anyway, paypal has the same invoicing feature if you pay extra for the service - google is free.

jason_kraft Posted 4 Jun 2011 , 2:50am
post #27 of 38

I believe julzs71 meant to quote KalisCakes, who charges customers extra for credit card payments. I don't believe this is illegal, but it does violate the merchant agreement so the business risks losing the ability to accept credit cards if MC/Visa terminates the agreement.

Offering a cash discount off listed prices is OK in most merchant agreements.

cownsj Posted 4 Jun 2011 , 3:15am
post #28 of 38
Quote:
Originally Posted by jason_kraft

I believe julzs71 meant to quote KalisCakes, who charges customers extra for credit card payments. I don't believe this is illegal, but it does violate the merchant agreement so the business risks losing the ability to accept credit cards if MC/Visa terminates the agreement.

Offering a cash discount off listed prices is OK in most merchant agreements.




And yet, gas stations get away with it all the time. Our local stations are currently getting an extra 9 cents per gallon if you use your credit card.

jason_kraft Posted 4 Jun 2011 , 3:22am
post #29 of 38
Quote:
Originally Posted by cownsj

Quote:
Originally Posted by jason_kraft

I believe julzs71 meant to quote KalisCakes, who charges customers extra for credit card payments. I don't believe this is illegal, but it does violate the merchant agreement so the business risks losing the ability to accept credit cards if MC/Visa terminates the agreement.

Offering a cash discount off listed prices is OK in most merchant agreements.



And yet, gas stations get away with it all the time. Our local stations are currently getting an extra 9 cents per gallon if you use your credit card.



You can report them to Visa/MC, but reporting businesses violating their merchant agreements with credit card companies is pretty much a lose-lose proposition, since the only thing that will happen is that the gas station won't accept credit cards anymore. Margins at gas stations are razor thin, and when prices are high the credit card fees can really cut into their profits.

cownsj Posted 4 Jun 2011 , 3:25am
post #30 of 38
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by cownsj

Quote:
Originally Posted by jason_kraft

I believe julzs71 meant to quote KalisCakes, who charges customers extra for credit card payments. I don't believe this is illegal, but it does violate the merchant agreement so the business risks losing the ability to accept credit cards if MC/Visa terminates the agreement.

Offering a cash discount off listed prices is OK in most merchant agreements.



And yet, gas stations get away with it all the time. Our local stations are currently getting an extra 9 cents per gallon if you use your credit card.


You can report them to Visa/MC, but reporting businesses violating their merchant agreements with credit card companies is pretty much a lose-lose proposition, since the only thing that will happen is that the gas station won't accept credit cards anymore. Margins at gas stations are razor thin, and when prices are high the credit card fees can really cut into their profits.




That kind of markup is really gouging though....... I just go to the station that keeps it at the same price for cash or credit. We have 5 right in a row because we are at the off ramp of a highway. Thank goodness.

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