Paypal; what should I know before I go?
May 7, 2004 9:21 AM   Subscribe

Any words of caution when accepting PayPal payments? [more inside]

I'm talking about PayPal payments for eBay transcactions, if that matters.

And I mainly want to know whether there is a way for the buyer to withdraw his money after he has sent it to me. That would be a smooth way to deceive me once I have already sent him the goods, no?
posted by kchristidis to Computers & Internet (15 answers total)
Best answer: I've had one bad experience, with what turned out to be a stolen PayPal account. The buyer paid, I received the payment (~£600), and moved the money into my bank account. This was on a Friday. The buyer kept hassling me to send the item on the Saturday. I, actually, just couldn't be bothered to do so. On Monday, my PayPal account was suddenly in arrears of £600. The real PayPal account owner had come forward; his account had been stolen, and used by a third party (my buyer).

PayPal's solution was to subtract the money from my account, and give it back to him. If I'd already shipped the item, I would have been in the shit. Thank God I'm a lazy bastard.

The solution? Whenever PayPal shoes you a buyer's address, it'll have Verified or Unverified next to it. Only ever ship to verified addresses. Let your buyers know this in advance; it's for their protection as well as yours.

Also: Never accept bids from Indonesia, Nigeria, or anywhere in the Eastern Bloc. Raise your eyebrows at suspicious locations. Also avoid selling to ANYONE who'd prefer to pay directly by credit card.
posted by armoured-ant at 9:40 AM on May 7, 2004

Best answer: I send and receive money several times a week and have never had a problem, though I've heard of ones like Armoured Ant's.

However, I disagree with aa's "sell only to confirmed buyers" policy. I would instead go by the little number next to the person's paypal account. For intstance, it'll say [82] which means that the person has had 82 transactions (send or receve) thru paypal.

I have various mailing addresses built into my paypal account (a po box for when i don't want a person to have my home address, my home address, my work address, a friend's address in NYC (for people who won't ship outside the usa), etc.) Only the one that matches my credit card is "confirmed". If seller's will only shipped to confirmed addresses than they potentially lose my bids even though I've hundreds of transactions on paypal and ebay, all positive.

As to your question, "can a person withdraw the money?"... I could be wrong but I believe they can only do it under two circumstances:

a. when sending to a member who has not yet received any money and

b. when sending to a non-member (ie, sending to an email address that does not have a paypal account).

If you have an account in good standing and have logged on and accepted cash from a previous transaction then to my knowledge it's not possible for a sender to withdraw their payment. This is because the money is sent to your email address and then directly "deposited" into your paypal account. Until you accept (by clicking the link) your first payment, you don't have a paypal account, per se.

Personally, I love paypal and it is my preferred type of payment on all auctions.
posted by dobbs at 10:06 AM on May 7, 2004

If a person uses a credit card to send the money to you via PayPal, you'll have to upgrade to a "Premier" account, which basically means PayPal takes a percentage of every payment you get. If they send it from their bank account or existing PayPal balance, you don't have to be Premier and it's free. So, if you don't want PayPal to take this cut, you'll have to say in your auction description that you'll only accept non-credit card PayPal payments. That will reduce the number of potential bidders, though.

And no, they can't take the money back after they've already given it to you; unless the situation is like in armoured-ant's post above.
posted by zsazsa at 10:07 AM on May 7, 2004

On another note, I should point out that today eBay announced a new Surcharge Policy, whereby sellers are forbidden from asking for extra cash to cover any fees for using electronic payment or any normal payment methods.
posted by armoured-ant at 10:13 AM on May 7, 2004

I would read this before using PayPal.
posted by caddis at 10:59 AM on May 7, 2004

That sucks (the surcharge policy). It will only motivate people to make the basic price they're asking higher to begin with.
posted by bingo at 11:08 AM on May 7, 2004

I'm guessing the habit was damaging pay pal's profits by turning people away.
posted by twine42 at 11:17 AM on May 7, 2004

I just tried to send an email to the guy ( referenced above in caddis' post, and it bounced back. He may have canceled that account after getting too many responses, but...kind of disappointing.
posted by bingo at 11:32 AM on May 7, 2004

Paypal has been hammered before on the blue.
posted by PrinceValium at 11:34 AM on May 7, 2004

I use PayPal for ebay sales and haven't had any problems. But I sell cheap stuff, it doesn't kill me if something goes wrong. I would be a bit circumspect about using PayPal for items that are worth a lot of money, I'd likely prefer a money order for those.
posted by Salmonberry at 12:38 PM on May 7, 2004

On another note, I should point out that today eBay announced a new Surcharge Policy, whereby sellers are forbidden from asking for extra cash to cover any fees for using electronic payment or any normal payment methods.

That's always been the official policy of PayPal because it's a policy of most, if not all, credit card companies. Basically, if you accept credit cards, you have to accept them the exact same way you accept cash. If you get caught, you can lose your merchant account. (This includes minimum charges, different prices for credit versus cash and surcharges.)

One thing some people do is add the approximate cost into the shipping and handling or directly into the purchase price if using Buy It Now. The downside is that people on are very sensitive to shipping prices, but often don't take the time to read the auction. If S&H is high, they may not pay you for the item or pay you and leave negative feedback if the transaction is otherwise the same.

I've been a long time member of PayPal. It's an inexpensive way of getting a merchant account without all the fuss. It's not a real merchant account, but for most peoples needs it does suffice. I've not had any major problems, but they have had some serious customer service issues.

The gist of a lot of complaints is that treats you like a revenue stream rather than a customer. Things seem to have improved since bought them, but YMMV.
posted by sequential at 1:03 PM on May 7, 2004

Perhaps I'm lucky, but I've had no bad experiences with paypal. I've dealt with plenty of uncomfirmed addresses, including those from buyers who signed up with paypal just to complete the transaction with me more quickly.

I also deal in low-ticket items--rarely $100+.
posted by adamrice at 1:18 PM on May 7, 2004

What sequential said.

My roommates run a micro-business that uses Paypal for both shopping cart and eBay payment functions and have been very, very pleased.

Where most people run into problems/complaints with Paypal, I think, is that they don't completely understand how credit cards work. Virtually all "bad" Paypal experiences I've heard of have involved some form of "they took money out of my account after the buyer had paid - how dare they!" not realizing that this is standard procedure for all credit card companies when a consumer disputes or reverses a charge.

So the answer is -- no, typically there is no easy way for the buyer to withdraw or remove funds from your Paypal account once you have accepted the payment. However, if the buyer should (for any reason) attempt to reverse or dispute the charge with their credit card company, the credit card will debit Paypal for the amount, and Paypal will, in turn, debit you. This would be true if you had a non-paypal merchant account as well.

There is a risk in every method of payment available, including cash (the biggest loss my micro-business friends have ever had was due to a customer paying in cash with what turned out to be a counterfeit $50 bill). Checks may bounce, money orders can be altered or counterfeit, credit card charges may be reversed ... you just have to balance the risk against the reward.
posted by anastasiav at 1:24 PM on May 7, 2004

I have a small business that sells t-shirts online, and we use PayPal. Few hundred transactions, no problems.

I'd venture a guess that the relative number of "problems" people have with PayPal are in line with, if not fewer than, those you get with any other electronic payment process (including credit cards). You just hear about PayPal's problems more often because eBay's ratings system makes it so easy to complain in public.
posted by mkultra at 1:37 PM on May 7, 2004

The solution? Whenever PayPal shoes you a buyer's address, it'll have Verified or Unverified next to it. Only ever ship to verified addresses.

If you live internationally (anyplace other than the US) Paypal won't verify your address. Actually, I'm not sure about my facts regarding other countries, but have tried to get my Australian address verified by them and can't.

Instead, look at their ebay feedback.
posted by lucien at 11:43 PM on May 7, 2004

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