PayPal - Suddenly holding money 'in reserve'?

[KateCB]

Anybody else had this - know why?

The information on 'why' on the PayPal site tells you WHAT, not WHY....if we had had lots of chargebacks or reversal of funds we would understand it, but we haven't had one - suddenly after 5 years of relatively trouble free trading with them, they have put a 10% daily reserve on our account which they hold for 90 days!

Effectively they are taking 10% of our cashflow and sitting on it for 90 days - AND its rolling, so they just keep taking and sitting on it.....how on earth we put THAT through the account AND account for the VAT when they release the first days (in 3 months time!) I have no idea.....:|

Anyone got a clue how to deal with this - or even if we CAN deal with it and have it removed, or explained?

I spoke to their call centre last night who didn't understand WHY, but kept telling me the 'WHAT' - finally he said he would escalate it and someone would 'be in touch' - I won't hold my breathe!

 

[KateCB]

Its ridiculous - we have traded with them for 5 years, have a 12 year old business, they have access to our Limited company bank account if they need it, and a back up credit card - for goodness sake - what do they want?

On the other hand, should I see this as a sign of success? Our turnover with them has increased by around 25k a month in the last 3 months due to another division being added which is doing well......if that IS the reason, then why are they penalising us for doing well?

 

[andygambles]

Its ridiculous - we have traded with them for 5 years, hgave a 12 year old business, they have access to our limited company bank account if they need it, and a back up credit card - for goodness sake - what do they want?

ON the other hand, do I see this as a sign of success - our turnover with them has increased by around 25k a month in the last 3 months due to another division been added which is doing well......if that IS the reason,m then why are they penalising us for doing well?

The sudden turnover increase will be the reason for the hold. You can ask for it to be reviewed but they can say no and you will have to either live with it or move.

My first point of call would be to ask for it to be reviewed.

 

[Mike tells it like it is]

Paypal are based in Luxembourg.

Ever phoned their "customer service" centre in Ireland?...

Everything that's wrong with service taken to an extreme.

 

[marketingquotes]

Paypal are based in Luxembourg.

Ever phoned their "customer service" centre in Ireland?...

Everything that's wrong with service taken to an extreme.

Tax reasons - have a look at this book talking about dodging tax and offshore trading

Paypoint do the same thing - they have a reserve account (just in case a refund to a client is needed). An excuse to hold on to money longer.

Banks - sure there is another thread about them going on at the mo.

 

[marketingquotes]

The telegraph recently ran a piece about them holding peoples money in reserve. It is actually illegal and you could have it released almost immediately but then you would not be able to use their services again. There is also a big thread about this on another site, I will post a link to both of the about when im on my laptop a bit later.

Yeh, but there are offshore - different rules.

 

[jamie2007]

Paypal take the pi$$ they seized my money or sorry attempted to for 180 days until I contacted the FSA who are like snails and then I asked for the name of their UK solicitor and the address so I can serve a summons on them, then they said they will only hold 50% I said no unless I get all my money returned I will be county courting you!

Well low and behold they did refund me, Have a look on paypalsucks.com you can get some help on there, Also you should find some of the top Paypal executive email addresses so you can email them directly, dont bother dealing with the monkeys in the call centre who have no great authority.

In fact try this Paypals office of Executive Escalations, there email is:
ppelce@[B]paypal[/B].co.uk

Carlotta is a person that works in Executive Escalations that uses the above email address.

Hope this helps!

 

[kulture]

The other half of your question, the VAT. Assuming you are not on a cash scheme, then you account for VAT on the date of the sale, and unfortunately not the date you get paid. Also the VATman does not like waiting 90 days for his money. So paypal take their percentage, hold the money for 90 days, and HMRC want their 20% you begin to wonder who you work for.

 

[Merchant UK]

As i've said before if you value your business and are getting to the stage of a large amount of Credit card sales then a merchant account is the way forward. Paypal is fine to sell on ebay and for individuals but as a business tool they take the PEE in a big way, so much that to avoid the UKs regulations on electronic money they would not agree to it, so they moved out of the UK.

I cant understand UK folk allowing Paypal complete access to their bank accounts when they do not follow the UK Banking Code. In essense your saying help yourselves, whenever and for whatever you want, you don't even need to tell me in advance.

There have been countless of businesses on here screwed by paypal and their one sided rules.

Save yourselves some money and get a proper merchant account. They are not as hard as people think. Worldpay and streamline can have you up and running in a couple of weeks and take each application on its merits, unlike banks which use a scoring system.

 

[Mike tells it like it is]

Who owns Worldpay?

Paypal are based in luxembourg...

The real world is a sick sad place

 

[vvaannmmaann]

http://www.paypalsucks.com/

 

[Merchant UK]

Who owns Worldpay?

Paypal are based in luxembourg...

The real world is a sick sad place

Royal Bank of scotland used to own it but they sold 80% of it earlier this year

http://www.worldpay.us/media/news_media44.htm

 

[KateCB]

The other half of your question, the VAT. Assuming you are not on a cash scheme, then you account for VAT on the date of the sale, and unfortunately not the date you get paid. Also the VATman does not like waiting 90 days for his money. So paypal take their percentage, hold the money for 90 days, and HMRC want their 20% you begin to wonder who you work for.

Yes, that was my problem - we are not on cash accounting, so pay as we are paid, however if we are not getting the full amount on the invoice, how on earthdo I show that through the SAGE accounts - reconciliation is going to be a nightmare!

 

[KateCB]

As i've said before if you value your business and are getting to the stage of a large amount of Credit card sales then a merchant account is the way forward. Paypal is fine to sell on ebay and for individuals but as a business tool they take the PEE in a big way, so much that to avoid the UKs regulations on electronic money they would not agree to it, so they moved out of the UK.

I cant understand UK folk allowing Paypal complete access to their bank accounts when they do not follow the UK Banking Code. In essense your saying help yourselves, whenever and for whatever you want, you don't even need to tell me in advance.

There have been countless of businesses on here screwed by paypal and their one sided rules.

Save yourselves some money and get a proper merchant account. They are not as hard as people think. Worldpay and streamline can have you up and running in a couple of weeks and take each application on its merits, unlike banks which use a scoring system.

We have a merchant account, have had for 12 years, however this new division is selling predominently on Ebay - HAVE to use PayPal! We could say that credit card/debit card is preferred, but that means people having to call us to pay, and its not as easy as clicking a button - plus we tend to get more sales between 8pm and 3am (I know, people need t get a life) so I can't see my order line staff wanting to work those hours! It also means that we need new PCIDSS, which I would like to avoid - at present all our sales are done either through our website (for one part of the business) or through Ebay. Stuck between rock and hard place!

 

[Somecamel]

Hi,

I have succumb to the mercy of paypal as well- they are currently 'holding' around £4k of the companies money.

No point talking to me about Merchant accounts- none of them want to know.

With regards to how to account for the VAT element- I don't use Sage but in my accounting software (freeagent), I treat paypal as a bank account. Seems to work ok- Pisses me off though seeing the balance of paypal when I log in

 

[deniser]

Commiserations Kate. This hasn't happened to us yet but you've reminded me to post the forms for a supplemental merchant account before it does...

 

[Dominic Taylor]

I'm sure we had something similar at one point (but it didn't involve holding money, just some form filling) so this sounds a bit extreme to me.

The problem we had was the number of forms and different people and unclear procedures on what to do when anything non-standard arrives, but we got things sorted in the end.

If you're doing 5 figures/month you should have a decent point of contact though (we have access to some sort of half-decent UK team). I can probably find our account manager's name which might be worth a go.

 

[KateCB]

We have no point of contact.....they have just upgraded our 'selling limits and values' on ebay for this new division to 1200 items and £35k of financials PCM, which we were really pleased about as we only launched it 8 weeks ago; then PayPal kick us in the teeth and 'reserve' 10% of each days turnover in reserve......thats a lot of money for PayPal to earn interest on whilst we don't......

 

[Bahamas Business]

Close your account and take your money out Kate.

They can and may take your money with no reason given, it is impossible to reason with them. They ask for information. You provide it and they still keep your money. They withheld 'Stole' £17800 from our account and it took 17 months and the involvement (and cost) of a law firm to get the money back.

Talk to your bank about real merchant services. They cost less and they do not and can not (FSA regulations) steal your money.

 

[Merchant UK]

We have no point of contact.....they have just upgraded our 'selling limits and values' on ebay for this new division to 1200 items and £35k of financials PCM, which we were really pleased about as we only launched it 8 weeks ago; then PayPal kick us in the teeth and 'reserve' 10% of each days turnover in reserve......thats a lot of money for PayPal to earn interest on whilst we don't......

Is there any other metod of accepting payment on ebay???

Cheque, bank transfer, internet banking??? why don't you offer a discount (ie what paypal would of charged you) to customers offering payment other than paypal, whilst putting people off paypal by charging extra for fees etc..

HI-Light that you accept Debit and Credit cards, ( get a Moto account set up if you don't already have one, so you can take orders over the phone, mail or fax)

or you could choose one of the other payment methods accepted

Our Accepted Payments policy helps ensure that buyers and sellers on eBay are offered safe, convenient payment options.

For most categories, sellers need to offer one or more of the following electronic payment choices:

• PayPal
  
• ProPay
  
• Moneybookers
  
• Paymate
  
• Credit card or debit card processed through the seller's Internet merchant account (which you already Have)
  

Additionally, payment upon pickup and Bill Me Later are valid payment methods as well.

 

[KateCB]

Close your account and take your money out Kate.

They can and may take your money with no reason given, it is impossible to reason with them. They ask for information. You provide it and they still keep your money. They withheld 'Stole' £17800 from our account and it took 17 months and the involvement (and cost) of a law firm to get the money back.

Talk to your bank about real merchant services. They cost less and they do not and can not (FSA regulations) steal your money.

Scary - we DO have a merchant account as i have said before - have had one for 12 years, and a MOTO account, however our sales tend to come in dribbles during the day and in floods between 8pm and 3am - can't ask order line staff to man phones to take payment at that time of night/day!

I would love to take out the money, but they will still be holding the 10% they already have for 90 days.....and not offering PayPal (which as we all know is sadly quick and convenient for most buyers) could affect sales badly - like I said we appear to be between a rock and a hard place - if our history was poor for chargebacks, I would understand, but we have never had a chargeback in 12 years, or the 5 we have added PayPal to our methods of payment.

I have thought about offering a discount to people who call to pay using their debit/credit card, however it doesn't seem workable for the reasons given above, PLUS I would have to apply for an increased PCI DSS certification, costing a fortune and involving a major interrogation to get it.

It was all going so well.......

 

[KateCB]

Just talked to our Payment provider (SagePay - not a great reputation I see on the forum, but we have used them forever and no problems!) and whilst they don't currently have a solution, apparently they have had a lot of calls in the past week about similar cases; they are putting this to their priority team to see if a solution can be worked out for their merchants, and they are calling me on Monday to discuss......I will keep you informed!

 

[kulture]

PCI compliance need not be expensive if you do it right and ensure that card details do not go near your server. It can cost less than £100 per year. I hope that sagepay can sort out a solution for you. If they do not, then I am certain that a number of other payment gateway providers will be quick to offer a solution.

 

[KateCB]

We are already PCIDSS compliant, but don't use the MOTO that we have available; once you use MOTO I am told that the costs and the damn form that is supposed to be 'self explanatory' (yeah, to the person who wrote it maybe!) gets even murkier.....might have to go that way though.....I hope SagePay Can sort somewthing out or I wil be looking for a provider who can, changing PSP would beless harmful than allowing PayPal to steal my money!

 

[Merchant UK]

The bonus is Kate you can already take cards so Paypal dosn't need to be an option for you just because people buy at 4am in the morning.

Just state that you take credit/debit cards and to phone you during working hours to take payment.

When i had an Ebay store i did just that, together with a freephone number, i found that people were phoning me up and placing orders direct bypassing Ebay altogether (Saved £££'s in sellers fees) In the end ebay just was an advertising portal as opposed to a selling portal, I would say that at least 80% of my customers that saw my listing on ebay bought direct from me, as opposed of completing the ebay sale.

I've often bought things at 2am in the morning and phone them the next day to take my payment at least that way you get to chat with your customer and the likelyhood of neg feeback will i guess be reduced.

You still need to use paypal if you sell but to put people off add a percentage to paypal payments to cover fees, admin etc... that way people will call you with their card details.

 

[KateCB]

Apparently it is 'against Ebay policies for sellers to make one method of payment more attractive than another, i.e. by adding surcharges or discounts for certain methods'

You can't win. I talked to someone at PayPal - hoping that I could, through their API add a link or button to my lsitings to direvt people to my SagePay payment page - Nope. Can't put a link that directs them away from Ebay/Paypal........

I looked at the amount they are now holding in reserve whilst I was at the PayPal site.....made me cry

 

[british steve]

We had problems with Paypal suddenly holding money for no reason, in the end we dropped them - best think we ever did. If you want to phone them at least give them the pleasure of paying for the phone call via their Freephone 0800 number!

PayPal 0800 3587929

 

[KateCB]

ooh, where do I find that then?They always give me an 0845....which isn't free with talk talk!! How did you get payment - do you get lots of non-payers if they have to call you during working hours?
do you sell/did you continue to sell on Ebay?

 

[Merchant UK]

Apparently it is 'against Ebay policies for sellers to make one method of payment more attractive than another, i.e. by adding surcharges or discounts for certain methods'

You can't win. I talked to someone at PayPal - hoping that I could, through their API add a link or button to my lsitings to direvt people to my SagePay payment page - Nope. Can't put a link that directs them away from Ebay/Paypal........

I looked at the amount they are now holding in reserve whilst I was at the PayPal site.....made me cry

But your more than able to add a number or weblink for customers to call you for further information about ordering , delivering and payment after all your trying to make your customers buying experiance a more enjoyable one, unlike ebay who wants to make a more profitable one.

Its then the choice of the customer to decide if they want to pay you direct or go through ebay.

I had a freephone number, which i told customers if they wanted to pay direct via credit card to call.

Ebay does allow you to take payment via your own Credit Card merchant so showing a link to a payment page is not foul of ebays rules

 

[kulture]

Ebay does allow you to take payment via your own Credit Card merchant so showing a link to a payment page is not foul of ebays rules

YET.........

 

[Merchant UK]

Well it looks like if people take paypal to court they will probably end up wining

Many eBay traders who discover that their PayPal account has been frozen dejectedly accept it, while some release their frustration through websites such as PayPalSucks.com and PayPalWarning.com. Others take their complaint to the Financial Ombudsman Service. But Shelley Michaels, a trainee lawyer from Bedfordshire, was so angered by how she was treated that she took PayPal to court — and won.
Ms Michaels has been using eBay for five years, recently to sell DVDs, video games and iPads, and had never had a problem. Then earlier this year she sold goods worth £1,814 — a higher amount than usual, triggering a “high-risk” alert. The next thing she knew, her account had been frozen.
She says: “I provided receipts for the computer tablets and the video games consoles to show that I had lawfully obtained the items. I also supplied information to prove that buyers had received the items. I had even received positive feedback for some of the electronics in question.”
But even after 12 phone calls to request that her money be released PayPal still refused to budge. Fearing that her money would be in limbo for 180 days, she bought a County Court claim against PayPal and won her case in Milton Keynes this month.
She says: “The judge said that PayPal had no justification for withholding my funds and ordered it to pay interest and costs.”
Rob Skinner, of PayPal, says: “We accept we handled this case badly and have apologised to the customer.”

source http://www.thewholesaleforums.co.uk...-have-had-their-paypal-account-limited-3.html

 

[projectfriday]

I've had my fair share of problems with PayPal, I'll only use it for small transactions. Honestly it is the bane of my life. I'm not sure what other alternative services there are but I'm sure there are better and more reliable ones.

 

[KateCB]

Sadly, we have seched, but there is nothing that allows a customer to buy with a 'one click' type button asd in PayPal - PayPal win every time as they make buying easy, you don't have to have your credit/debit card handy, just your username and password, and this is why people like it.....
I have looked at a lot of services this weekend, but there is nothing to compate; I don't really want people to call me, the office is too busy to handle these calls (more staff may be an option, but you are then looking at additional costs anyway!) and when we DID put on a 'PAYMENT ONLY' number for credit/debit cards, we were fending supportcalls, tehcnical calls and general enquiry calls - as this new dicision is software, our order line staff simply don;t have the information available, and had to direct people to email our techies; this takes up the order line staff's time, the line itself and some people were quite rude when told that we were the payments centre only!

So we CAN put the number back on, but it defeats the object of the sale being made and paid without our intervention, time, staff cost etc!

 

[Esk247]

Google Checkout?

The 90 day rule can seriously affect a small businesses cashflow, PayPal was never built to handle merchant and commercial transactions but they've adopted it and not carried across the Business advice and support like they were supposed to.

The 90 day rule is understandable but only when it comes to individuals and NOT businesses who have a company address or commercial bank account. There should be different rules.

I also dont like that there is no actual warning about this 90 day thing until you're in it. They don't give you 3 days notice or ask you to call them to verify anything, they just seal it and hold your money. For some ebay businesses this can be in the thousands, affecting cashflow, stock buying, and making your cashflow forecast look like a lie.

 

[KateCB]

True ESK - as I said, the amount in reserve after 4 days is making me cry - it about time something was done about PayPal and their non banking rules, I can see smaller businesses being put OUT of business if PP retain 10% of every days taking - it could equate to all the profit for each sale!

ANyone any idea of how to bring PayPal into the UK rules? Or are they just too big and too far away fro us to do anything about at all?

Its amazing, DSR want small businesses to comply with every rule in every different EU country, but PayPal ride roughshod over all countries, not just the EU!

 

[KateCB]

YET.........

Oh, I hope you know something we don't Kulture!! It woul dbe afine day......

 

[kulture]

I wish I could be positive. I was commenting on the post that said at least you could still post details about alternative payment methods. Unfortunately I can guess that if eBay could get away with it they would restrict payment to just paypal. Have a complete monopoly.

 

[Chris Ashdown]

Have you set up your own web site yet ?

You should build this up as fast as possible so that you are not dependant on EBAY

You could also follow the email of Merchant UK who posted

But Shelley Michaels, a trainee lawyer from Bedfordshire, was so angered by how she was treated that she took PayPal to court — and won.
Ms Michaels has been using eBay for five years, recently to sell DVDs, video games and iPads, and had never had a problem. Then earlier this year she sold goods worth £1,814 — a higher amount than usual, triggering a “high-risk” alert. The next thing she knew, her account had been frozen.
She says: “I provided receipts for the computer tablets and the video games consoles to show that I had lawfully obtained the items. I also supplied information to prove that buyers had received the items. I had even received positive feedback for some of the electronics in question.”
But even after 12 phone calls to request that her money be released PayPal still refused to budge. Fearing that her money would be in limbo for 180 days, she bought a County Court claim against PayPal and won her case in Milton Keynes this month.
She says: “The judge said that PayPal had no justification for withholding my funds and ordered it to pay interest and costs.”
Rob Skinner, of PayPal, says: “We accept we handled this case badly and have apologised to the customer

Look her up on Google and ask advice

 

[KateCB]

Hi Chris, yes the website is up there - has been for 5 months - not one sale, however,sadly Ebay is taking up all our time and the website has been left behind - seriously, Ebay is THE place for marketing, but getting people to a new site is less 'speedy' hence we launched on Ebay to try and creat awareness - it has turned into a monster, not only for totally unexpected sales volume, but costs and now the paypal thing!

Our funds haven't been frozen, they are taking 10% of everything we put through on a daily basis.....and hold it for 90 days.....its called a 'rolling reserve' apparently, but they are essentially taking our cashflow away.

 

[jamie2007]

I am very pleased Shelley has taken steps to sort this through the County Court, Paypal are notorius for doing this, I hope some of you can see the mch bigger picture here.

They do this to thousands of people everday and some dont have the necessary proofs to retrieve there money and Paypal keep this.

Its a huge scam as far as I am concerned, legalised robbery!

People have really suffered in the hands of them.

Chris is so right when he says you should build up your website and not be dependant on them!

I would strongly take his advice, maybe you could have a presence on Ebay with a link through to your site.

I like the way they use the words " Rolling Reserve" cheeky buggers!

Have you set up your own web site yet ?

You should build this up as fast as possible so that you are not dependant on EBAY

You could also follow the email of Merchant UK who posted

But Shelley Michaels, a trainee lawyer from Bedfordshire, was so angered by how she was treated that she took PayPal to court — and won.
Ms Michaels has been using eBay for five years, recently to sell DVDs, video games and iPads, and had never had a problem. Then earlier this year she sold goods worth £1,814 — a higher amount than usual, triggering a “high-risk” alert. The next thing she knew, her account had been frozen.
She says: “I provided receipts for the computer tablets and the video games consoles to show that I had lawfully obtained the items. I also supplied information to prove that buyers had received the items. I had even received positive feedback for some of the electronics in question.”
But even after 12 phone calls to request that her money be released PayPal still refused to budge. Fearing that her money would be in limbo for 180 days, she bought a County Court claim against PayPal and won her case in Milton Keynes this month.
She says: “The judge said that PayPal had no justification for withholding my funds and ordered it to pay interest and costs.”
Rob Skinner, of PayPal, says: “We accept we handled this case badly and have apologised to the customer

Look her up on Google and ask advice