I sold an item (laptop computer for $1500 or so) on eBay, and the buyer sent payment using the instant bank transfer option. The funds appeared in my account, and I shipped the item. I have tracking information to prove that it was delivered. The buyer contacted me to tell me that a check from a client of his bounced, and his bank account was now negative (apparently the funds were credited to his bank account, and then removed). He has said that he is working on resolving the alleged payment issue, but I'd assume it could be awhile. Anyway, PayPal has now put a hold on the funds in my account (actually, I had withdrawn the funds already, so my account is negative). If the buyer doesn't make good on resolving the payment issue, what happens? Will the seller protection policy cover this? I'd appreciate some information from experienced eBay/PayPal users.
When I send PayPal payments, there are three options: eCheck, Instant Bank Transfer, and Debit/Credit Card. This wasn't an eCheck payment, it was an Instant Bank Transfer. Obviously, there is still a "clearing" process, but not on the seller's end. The funds are available/spendable/withdrawable immediately. In this case, a couple weeks later, the funds were put on hold. In my experience, with eCheck payments, my PayPal balance is not effected until the check actually clears, and the transaction shows as "pending" or "uncleared" in my account history until then.