We are selles. We have been using paypal for almost 10 years, perfect feedback in most eBay stores, 99% of claims always won, mainly item not yet received, mainly overseas customers who want items in less than a week. We recently transfer our merchant accounts to paypal because we were told paypal has a better rate, better seller protection and blah, blah, blah. Because we wanted to consolidate the payments we accepted, so we transfer from Authorize.net and Google Checkout to paypal. We later got an email saying that paypal was going to keep 10% of our money for 6 months in all our accounts because we have an increasing number or claims, of course if we triple the transactions, claims should be increasing at same rate, 2 or 3 a week out of thousands a month, like I said, most always won. Second, we were forced to keep balances in every currency we accept because if customer in Spain makes a claim and you have thousands of dollars in paypal, that will not be enough, paypal will reverse all your last bank withdraws to cover any possible claims, forgetting that we have enough money in dollars. In any case, now we have to leave a lot of money in paypal at all times, not enough, in every claim, paypal takes the full amount of transaction even if customer makes a claim for only a fraction, they take the full amount anyways for weeks. Not enough then, paypal decides to now take 10% of every day income for 6 months as stated in the 3 emails we got. 10%!!! if we make 20% profit, half will be gone for 6 months, no explanation, no matter how long we have been in business, how many perfect feedbacks we have on eBay, how many verified transactions or how much we have shown that we are trusted sellers. I would like to ask people here, is this legal? is anyone having same issues? I really liked paypal for a long time, this actions really make good customers to go away, I know that a few small fries making wrong descisions can really hurt a company reputation but this is totally unacceptable, please give your feedback, if you are a seller, we must unite to tell companies we are forced to use that there are things they cannot just do or change, any advice will be greatly appreciated. Thank you
Finding a new provider is not the answer, the answer is to get someone to sue those bastards and make them stop the abuse, they are not doing us sellers a favor with their services, we made them, without us, they are nothing, same goes for banks, telephone companies and any abusive institution. We have invested thousands setting up, adapting and promoting the stupid paypal services with the "we prefer paypal" crap. They have to be grateful and reconsider their practice, paypal is an abusive company that needs to be sued, stop and given a lesson!
While it's annoying, requiring you to maintain a rolling reserve isn't illegal. It's actually a pretty standard requirement if you set up credit card processing directly through a bank. Read this article from the Business Week blog: http://www.businessweek.com/smallbiz/running_small_business/archives/2009/08/paypals_reserve.html All you can do if you don't like PayPal's policies, take your business elsewhere.