PayPal Advice

September 10, 2005 7:04 PM

Has anyone had any GOOD experiences with PayPal?

I'm about to open a little shop online and I love the way PayPal is supposed to work.

Things I like:
It's cheap.
It's easy to use.
The customers will recognize the name PayPal, and know it is legitimate.
People don't have to have PayPal accounts to use it, they can just use their major credit cards.

Things I don't like:
According to various horror stories I've heard, they might eat my money.

All of these stories seem to involve large transactions, but my transactions should be under $200 each, most under $100. Does that matter? I keep telling myself that millions of people use PayPal and I must just happen to hear about the extraordinary stories. The fact that the stories exist at all, though, is enough to give me pause.

Advice? Words of wisdom? Warnings? Alternatives? Thanks!

posted by leapingsheep to computers & internet (36 comments total)

I only had a problem with PayPal once when I bought an item off of eBay and it never arrived. The seller broke off communication with me, so I filed with PayPal for a refund. It took a week, but my money was refunded without penalty to me. I don't know what happened to the seller. I've never had any other issues while using PayPal.
posted by Servo5678 at 7:09 PM on September 10, 2005

I've used them for years with no problem. The advice I always hear is don't leave any money in there. Transfer it to your bank account on a regular basis.
posted by Otis at 7:12 PM on September 10, 2005

The customers will recognize the name PayPal, and know it is legitimate.

Maybe more legitimate than demanding Western Union MoneyGrams, but I don't really find accepting PayPal to particularly help an online store's legitimacy. Mainly for the same reasons you like it--it's easy to set up, and anyone can do it. Which means, of course, that they have to wave eating your money over your head to keep you legit.

If you pull money out of your account ASAP, and really truly don't do anything suspicious or suspicious-looking (think: massive volume all of a sudden), I'll bet you'll be fine.
posted by trevyn at 7:14 PM on September 10, 2005

Transfer it to your bank account on a regular basis.

Absolutely right: On a daily basis. It's crucial that you treat PayPal as a payment processor, not a bank.
posted by cribcage at 7:15 PM on September 10, 2005

you should probably switch to something else if you get popular, but for a small shop it (hopefully) won't be a problem. Paypal dosn't look very 'professional' to most people as well.
posted by delmoi at 7:16 PM on September 10, 2005

I've also used them for years - for buying, selling and for sending money to family at home (ie sending it from US to Ireland). I've never had any issues with them, and although I've always heeded the advice above to transfer the funds regularly, on the odd occasion I've left a balance there with no problems.
posted by jamesonandwater at 7:17 PM on September 10, 2005

I am a merchant with 189 transactions over a 3 year span; Paypal is not my primary processor. They have been reliable in maintaining the account, but there was one dispute where Paypal ignored my documentation and gave money back to the customer -- the customer realized they were at fault and in my response I told Paypal to contact them, but they forced the refund through anyway.

Overall, they are an unregulated entity with a well-established track record of mediocre customer service, and based on my experience I certainly don't trust them to handle any problem in a fair manner. I agree, don't leave any money in there. In fact I always route the money to an empty bank account so they can't try withdrawing any money, and then I transfer it to yet another account. And if you're a merchant, get a real merchant account so that if they screw you over you'll be able to continue doing business.
posted by rolypolyman at 7:20 PM on September 10, 2005

I've used them for over five years successfully, using their custom programming API to handle new accounts here since last fall, and it's worked great.

I also do a nightly flush of money from the account to my bank, so paypal is just a payment processor.
posted by mathowie at 7:29 PM on September 10, 2005

I've used paypal a great many times over the years. Both for giving and receiving payments. It's fast, easy, cheap to free depending on what you're doing, and can mean anyone can have a site that handles credit cards. Like others, I rarely let money sit in there for more than a few days, but that's it.

WOULD BUY AGAIN A++++++ and all of that ;-)
posted by furtive at 7:33 PM on September 10, 2005

The horror stories for Paypal are almost all relating to its absolutely abysmal customer service. If no one contests transactions and nothing goes wrong, you'll be fine. If a customer contests a charge or makes a dispute you can and should expect Paypal to reverse the transaction, lock your account and also lock the bank account that it is connected to and anything else they can think of. Limit your interaction with them to the automated processes and you'll be fine.
posted by hindmost at 7:51 PM on September 10, 2005

I've used Paypal for dozens and dozens of online transactions and not really had problems; most of the transactions have been as a buyer (e.g., I was paying with my Paypal account), but I used them (via DropCash) to receive money once, and everything went just fine. All that being said, I would have to agree with everyone here -- get your money through PayPal, but never leave your money with PayPal. In fact, I love rolypolyman's suggestion to transfer money out of PayPal to bank account A and then immediately transfer it to bank account B (which is totally unlinked, and not even known, to PayPal) so that they can't ever touch money that you've gotten from them.
posted by delfuego at 8:02 PM on September 10, 2005

I'm a happy paypal customer. I don't use it much, but when I have used it, it has worked as advertised.

It doesn't crash as much as metafilter, for example.
posted by b1tr0t at 8:31 PM on September 10, 2005

Five years, no problems.

I equate Paypal horror stories to people's fear of being trapped in a burning vehicle. It happens, but rarely.

FWIW, I only deal with eBay sellers who take Paypal.
posted by mischief at 8:34 PM on September 10, 2005

I've done several hundred transactions through them in the last two years without issue.
posted by cillit bang at 8:56 PM on September 10, 2005

If you want to be taken seriously, you'll probably need to get a merchant account & gateway, plus SSL (either yours or your host's). That's probably around $50/mo, absolute minimum. If that's outside of your budget, go with PayPal.
posted by devilsbrigade at 8:57 PM on September 10, 2005

I have a merchant account but no data gateway stuff. I have an old swiper terminal that sits on my desk and just uses the phone line. I use mals-e.com for order taking, and just do the credit card stuff manually. But yes, the merchant account is about $50/mo and they take a percentage of sales. Seems everyone wants to be a middleman in the credit card business and everyone's got to get their piece of the pie.
posted by rolypolyman at 9:19 PM on September 10, 2005

One alternative to PayPal is CCNow. The disadvantage is that you're only allowed to sell certain kinds of products (physical merchandise that isn't porn-related, basically). It also takes a little while longer to get your money.

(Full disclosure: I used to do CS for them. Whee!)
posted by neckro23 at 9:42 PM on September 10, 2005

I've used PayPal since they started... back then they actually used to pay you to sign up! Never once had a problem.
posted by spilon at 9:57 PM on September 10, 2005

"All of these stories seem to involve large transactions"

Doesn't really matter; $2000, $2, 50,000 good transactions under your belt or 5, it's all the same to PayPal -- if they decide they don't like you, they'll happily close your account without warning or any real explanation and stonewall until you go away. You might get any money you had in your account, you might not. Psychopathic is the term I would use.

Keep any money you're not willing to lose out of your account, and be prepared for them to screw you over at any time for arbitary reasons (i.e. get a better service to fall back on), and you should do fine. It really would be better for everyone if people didn't support them though; psychopathic monopolies suck.

WorldPay, StormPay and MoneyBookers seem the best of the services I've used so far; WorldPay are a little on the expensive side but are nice and professional and geared towards businesses. StormPay seems like a fairly decent PayPal alternative, and MoneyBookers are insanely cheap and good for European users who only have bank accounts, if a bit on the slow side. PayPal may be better features wise, but they seriously need some therapy and psychoactive medication.

Good luck!
posted by Freaky at 10:54 PM on September 10, 2005

I disagree with those who feel that PayPal diminishes the respectability of the vendor. Although I have no great love for the company (if only because their ancestry includes my former bank, X.com, and its horrid customer service practices), it seems like more "mainstream" places are offering PayPal these days. (Overstock.com springs to mind.) The amateur connotations seem to be waning.

When given the choice of a regular CC transaction or PayPal, I choose PayPal. The fewer places I send my CC number, the happier I am. (Although there are other ways to minimize sharing your actual number, I know.)

This is especially true if the merchant's web design is a little too... unslick. I've been known to wait until some sites offer PayPal instead of regular CC services before ordering.

And, like mischief, I won't even consider your eBay auction without it...

I've been with PayPal since the beginning and never had a problem with PayPal as a buyer or seller, but that may just be luck. My Australian SO has had to suffer several changes over the years in the rules dealing with foreign bank accounts, but other than that, no big woo.
posted by Liffey at 11:37 PM on September 10, 2005

As said before, transfer the funds regularly. I withdraw mine into a seperate bank account that I have, then transfer it to my real account straight away. Paypal doesn't know my real bank account details, and while they may be able to charge my dummy account anyway (which I can argue the toss about later) they can't touch my cash.
posted by fire&wings at 1:54 AM on September 11, 2005

820 transactions over the course of this year and no problems so far. The majority are < £20, but a few are in the £500 range. Like everyone else I don't risk keeping money in Paypal - I empty it every time it hits £100.

I've got my first dispute open at the moment. The buyer didn't pick up the parcel from her post office and it was returned to us. She's now claiming "goods not received". I've sent all the documentation off to Paypal, along with an offer to resend or refund, but they're taking forever to close the dispute. That's my only brush with customer services so far.

As to professionalism... I'd be wary of a site that offered Paypal only (it suggests they don't even have the minimal amount of money required for a merchant account) but if they offered Paypal alongside CC processing, I'd choose to pay with Paypal simply because there's less typing involved.
posted by Leon at 6:12 AM on September 11, 2005

I've been using them for small things for a long time. I've never had a problem with them. Never lost money. Never found money (that wasn't mine). No problems.

But lots of people bitch about it. So, here's something to consider:

Paypal is HUGE, and used by a huge number of people. They probably do something on the order of a billion monetary transactions a week. There are bound to be the occasional fuckups. And the fuckups are what you're going to hear about. When something goes wrong people yell and scream and call conspiracy and evil hoping that it will get their problem fixed.

When things go right, people are just happy.

So if you think it will out for you, use it. Just be wary and smart so that if issues do crop up, you catch them before they become problems.
posted by jaded at 7:42 AM on September 11, 2005

I agree that it is difficult to take seriously a business using PayPal -- for any number of reasons, including uncertainty as to whether they were aware of PayPal's unsavory reputation. But the point I think being made above, and I agree, is that a business processing payments via PayPal is analogous to a business receiving email "@AOL.com." It's just amateurish.
posted by cribcage at 7:49 AM on September 11, 2005

I've used PayPal for years, as a buyer and seller, no problems, even when I've run into a few disputed eBay auctions. I even keep a couple thousand cash in there for an easy 3.5% return. I'm curious - why are you all saying to transfer money out immediately? You're afraid you'll run into a disputed transaction and your account will get frozen?
Mmm...has -anyone- had an experience where you haven't gotten your money? From the above responses, sounds like just one seller has had one sale automatically refunded. I kinda want to know the basis for everyone else's paranoia.
PayPal is high on my trust list so far.
posted by wavejumper at 8:53 AM on September 11, 2005

I believe Mosch said it best when they wrote that you can't understand why some people hate paypal until you've had a problem with them.

My problem does have a happy ending so it works with this thread. I sold an item to help pay a bill. The buyer paid via paypal. I had misplaced my Paypal debit card, so I transfered the funds. I have had the same bank account linked to the account for five years. I had also down the transfers in the past no problem. This time, paypal decides that it's suspicious and limits access to my account.

I make it through most of the process but wait almost 4 weeks to receive the letter I need to activate my account. So I give them a call and they reactivate my account with no problem, as if I could have just called them right away to solve the problem.

I still use paypal, but now I feel really guilty doing it. It's like an abusive relationship.
posted by drezdn at 9:50 AM on September 11, 2005

I've used PayPal for a number of years, but mostly sub $250 transactions. They're slow and having them know my information skeeves me out, but I haven't had any bad experiences with them.
posted by PurplePorpoise at 1:30 PM on September 11, 2005

I've done tons of transactions both in and out and have no complaints about them.
posted by dobbs at 2:01 PM on September 11, 2005

They seem to be OK at things that can be handled entirely by machine. If you need a real human you're out of luck. They also don't accept email and will force you to go through an advertisement every time you want to get in to your account. They will also coerce you to do whatever it is their PHBs think is neat this week.
posted by Ken McE at 3:40 PM on September 11, 2005

Think about it - if you have to go hunting for stories of good experiences, it's probably not a service you should use. If this helps in your decision-making process, I avoid sites that take PayPal-only like the plague. If I have to deal with PayPal, I look elsewhere. You might look into Yahoo!'s offerings.
posted by jzb at 3:53 PM on September 11, 2005

I've never had a problem with Paypal.
posted by angry modem at 4:41 PM on September 11, 2005

Never a problem with PayPal. Doesn't mean it couldn't happen. As a buyer, I look for it and won't consider most eBay transactions without it. As a buyer, I discount immediately any BidPay-only sellers. I'm sorry, you're the seller. You want to sell something, don't make me pay the ($1.95+) transaction fee. My perogative. That just chases my little wanting-to-buy-something ass away.

Money orders? I bought a dvd a few months ago with a money order, and it cost me $1.50 for the money order and took 20 days. To get a $5 dvd. No thanks. Too long for an impulse buy. And a personal check would have taken longer.

Like everyone else, I'm sure I will be fine with PayPal until it fucks me up. There are a lot of PayPal horror stories on the web, but virtually all of them are funnels into free-merchant dot com, who try to sell you credit card accounts. So I'm not sure I believe them.
posted by umberto at 4:52 PM on September 11, 2005

Because I work in banking and I understand how truly and utterly unregulated PayPal is, I don't trust them. I have a PayPal account, but generally speaking I don't mess with more than about $50.00 in there. It's hooked up to my "little" account and they know nothing of my actual, bill-paying bank account.

PayPal is NOT a bank. They are not obligated to deal with customers in any way other than the way they determine: Their way or the highway. In other words, always remember that they are unregulated and that they can screw you at any time . . . and your recourse is about nil.
posted by Medieval Maven at 7:35 PM on September 11, 2005

Thanks everyone...I'll have to chew on all this a bit.
posted by leapingsheep at 7:48 PM on September 11, 2005

I've had 400+ sucessful transactions, mostly for small (sub £50) amounts, and two occasions where I've had a problem - on the first, an American buyer claimed the console I sent him wasn't working (it was, but he just ignored the fact that I said "PAL European version" in the auction). He filed a chargeback through his credit card company and Paypal immediately gave him the money back, leaving me out of pocket by $80 and a console. I contacted Paypal with all relevant details, but they basically said "tough luck". It sent my account $80 into the negative, and I had to repay that before I could use it again.
Second time was a small purchase (under £10) where the seller never sent me the item. I filed a claim, Paypal agreed I was in the right, but they couldn't refund my money because the guy had already withdrawn it (he got several other negatives for doing the same thing around shortly afterwards, but as far as I could tell, Paypal/eBay took no action).

Despite these problems, I still use it because it's the easiest method for eBay payments, though I always withdraw my funds once they reach £50 or so.
Having said that, as soon as Google launch their supposed alternative in the near future, I'll be switching to that.
posted by anagrama at 4:49 AM on September 12, 2005

I've had about 200 or so transactions and have lost money on about 5 of them due to complaints unfairly lodged against me and the money was refunded. The customers then refuse to return the goods or pay for them, leaving me without options sans getting authorities involved.

To date the horrid lack of customer service and support on behalf of paypal has cost me about $12,200 USD in these transactions.
posted by omidius at 1:16 PM on March 22, 2006