PayPal as a Gift

[Sideshow Bob]

Lately I've seen more of this in our Buy/Sell listing, why? I know a lot of people don't like PayPal but if you are going to use it, why shouldn't you should pay for it? Like them or not they are a business offering a service.
End of rant.

Gale

[Ash]

For international transactions there's more issue than paying for a service. Even if I send a 'gift' I must still pay a fee, and I'm charged a very bad exchange rate. There are few other accepted ways to send. Granted, the fee is lower than most other options.

In reality Paypal is raking in a fortune. As a 'consumer' it is annoying there is a monopoly on its use, with no viable alternative*. Further nuisance is either charge a fee OR give a poor exchange rate.

Recently my bank changed its rules on buying overseas using the Debit card. Instead of being free abroad, with a poor rate (to compensate), now there is a fee per transaction as well. Maybe they realised nobody can stop them, like nobody stops Paypal.

*a viable alternative would be competitively priced and offer essentially the same service.

[CP Goerz]

Ebay forces you to take Paypal or one of their clones...note how all companies charge the seller, not one charges the buyer. I'm perfectly happy to take cheques and money orders but I'm not allowed to say even that, between ebay/paypal fees the rake is in the 15% region, a tough sell when most bidders on ebay expect to pay less than averagel to start with.

[Sideshow Bob]

I did say a word about eBay, it is this forum I'm talking about.

Gale

[Heespharm]

I did say a word about eBay, it is this forum I'm talking about.

Gale

Not that I'm endorsing this behavior but most ppl try to save a buck these days... I can't control anybody's moral choices but I can choose not to do it... Is it immoral?? I don't know... But paypal has got to know that people are doing this and they aren't concerned... This is actually a feature that was ADDED to paypal... Back in the olden days when I first signed up you had to pay the fee no matter what!

[Wayne]

A good reason to ask people to use the gift option if you are a seller is that the buyer forfeits some/all their rights on disputes/complaints. After all, it was a gift, not a purchase. Obviously not so good if you are the buyer. I wont ask someone to use it, and I will refuse if asked. A good policy all around.

[Erik Larsen]

if someone is selling something the cost of selling
it becomes the burden of the buyer?
stores build this into a "price" i find it strange
that "sellers" can't add $5 into their selliing price
to deal wit paypal fees

My thoughts exactly. IMO, just include any fees in the asking price without the nonsense of splitting the fees up etc.
Erik

[RawheaD]

I haven't done any transactions here, but elsewhere I like to give the option for the buyer to choose the Gift option for a cheaper overall price. Perhaps risky if the seller is a nobody, but once the reputation is firm (I have 100% positive feedback from every single outlet that I transact at), then it becomes beneficial for all parties, except Paypal, to go that route.

As for Paypal themselves? Cry me a river. Every time I sell something on Ebay, the two companies combined double dip on everything, now including shipping fees. Since the only "service" that Paypal provides in a transaction like this is a key punch on one of their computers that makes different numbers display on two of their users' accounts pages, something that, for example, many Banks do for absolutely free (e.g., Bank of America's internal transfer), I have no problems whatsoever taking advantage of a transfering mechanism that is there for me to use.

[edp]

IMO, just include any fees in the asking price without the nonsense of splitting the fees up etc.
Erik

Yes, this. The main reason being this:


the buyer forfeits some/all their rights on disputes/complaints. After all, it was a gift, not a purchase. Obviously not so good if you are the buyer.

There's no way I'm going to use the "gift" option for something that isn't a gift if I forfeit any chance of conciliation in the event of a dispute.

[Thebes]

Anything that harms fleabay's quasi-monopolies is all-right in my book.

[Rick A]

When I sell items I (now) include PPfees in my price or specify buyer pay fees. I used to send payments as a gift, but that came back to bite my butt, and I ended up screwed. Recently I purchased a lens on the classifieds here, the seller never mentioned paypal fees, and it was overseas transaction, so I payed with PP and let him cover fees. The seller sent me a nasty email about the difference in price, at which point I asked for a refund to settle the dispute. I'm still waiting for the lens, and believe had I sent as a gift, I would have no recourse with the fellow if it doesn't show soon.

[Wayne]

I haven't done any transactions here, but elsewhere I like to give the option for the buyer to choose the Gift option for a cheaper overall price. Perhaps risky if the seller is a nobody, but once the reputation is firm (I have 100% positive feedback from every single outlet that I transact at), then it becomes beneficial for all parties, except Paypal, to go that route.

As for Paypal themselves? Cry me a river. Every time I sell something on Ebay, the two companies combined double dip on everything, now including shipping fees. Since the only "service" that Paypal provides in a transaction like this is a key punch on one of their computers that makes different numbers display on two of their users' accounts pages, something that, for example, many Banks do for absolutely free (e.g., Bank of America's internal transfer), I have no problems whatsoever taking advantage of a transfering mechanism that is there for me to use.


I hear you, big companies/corporations are evil ripoffs. BUt in both cases here they are providing a service that you choose to use, voluntarily. You dont have to use ebay. You dont have to use Paypal. But businesses that provide services have to charge something for it. Really, for what the hell reason would Ebay or Paypal do anything for you for free?

[Steve Goldstein]

Really, for what the hell reason would Ebay or Paypal do anything for you for free?

When I originally signed up for PayPal it was owned by xoom.com and was promoted as always free, no fees. Their business model was to make money on the float - I don't recall whether the fees began before or after they sold out to eBay. But with interest rates in the toilet that model would certainly fail today.

[lbenac]

This originated as many things due to abuses of the eBay/PayPal claim policies that have developed during the last few years to the detriment of the Sellers. This is this service to the buyer that both (or are they really one company now) charge to the seller.
So for a seller it might be adding insult to injury in a certain sense.
Under these rules, a buyer can make a claim any time during 45 days after the sale. He does not have to prove anything. Paypal will side with the buyer regardless. The buyer can return an empty box as long as it shows a return, he will get a refund.
In the best of case, the buyer will simply use the item decide that it does not need it anymore or change is mind, raise a claim "item not as described" and return the item for a full refund. In the worst of case the item returned will have been damaged, tempered with or exchanged. Try to tell Paypal that the serial number is not the same than the one you sold, and see how it will go...

Of course if you consider sale/trade within a close knead community like a forum, then there should not be any issues either way.

The reality is that you will likely sell to somebody that is new to the forum or does not have any feedback/long time presence on any of the major forums (APUG, Photonet....) and that there is so much inquiries and detective work you can do.

The logic between "Payment as a gift" is that you do not pay for a service that you do not want. You rely instead on your reputation, long time standing and judgement of your peers as guarantee that what you are selling is "as described". In turn you make yourself known and give references, so that the Buyer can judge of your reliability. This is the recourse that the Buyer has - making a claim in the public domain where you are usually spending quite a bit of time. Not something that is negligible.

It might somewhat rub your sense of morality and make you feel that you are taking a big risk, but in fact put in the context of a reputable seller selling to an unknown buyer, it is quite fair and equitable. In the context of two well known seller and buyer, why would you need the PayPal service anyway other than only the fee to transfer the money - so once again it is a logic way to use.

I will not flog a dead horse and had more to what Frank has been already writing about but selling on eBay has now my hackles raised.
I sold a lens on eBay. A Seller with a reasonable feed-back contacted me and asked if I would accept to ship to HK and agree on a set price for an immediate purchase. We agreed on a price shipping included and I explained that with a reduced price and free shipping I would downgrade from Xpresspost to International Package.

As soon as the package has been shipped, the Seller contacted me and said that it would put a claim because the shipping was too slow or that I should give him a further discount. I responded that I had our email exchange to show that it was what we agreed upon. He then advice me that just in case the item was not as described it would start a claim, PayPal did not let him open that claim as the item has not arrived yet. Once the item arrived he write to me that the lens was used and would need CLA :rolleyes: so that I should refund him the cost of a CLA or he would put a claim.
I just got so fed-up with the bargaining tactics that I indicated to PayPal, that the buyer has been trying to get a discount since the day the item has been shipped and had tried to open a claim even before the item has arrived and that the item matched exactly the pictures posted on the add which clearly indicated that it was a used lens. They very politely indicated that I needed to refund the buyer and that was that. The buyer returned the lens in my own unopened package. I was lucky as he just wanted a lower price or had changed his mind and all I lost was the shipping cost to HK. So in that case, the Buyer was just taking advantage of the PayPal lax policies toward Buyers to negotiate a better price than the sell price. I am sure that in his mind he was not dishonest but simply did what was permitted by the system.
Since then I am wondering what would have happen if the lens returned has not been the one I sent, or if the front glass has been replaced by a scratched one...short of having the returned packaged opened in front of a notary or a Police Officer, there was no way I could convinced PayPal that I had been swindled.

Cheers,

Luc

[BrianShaw]

... But businesses that provide services have to charge something for it. Really, for what the hell reason would Ebay or Paypal do anything for you for free?

For the last couple of purchase I've made from members of this (and other) forums, I'd sent money as a purchase but clicked the box where I accept the paypal fees. Seems to me that this is a better option than sending as a "gift".

I see it Wayne's way... we (me and the seller) agreed to use a third-party to transfer money between us so one of us should pay them for providing that convenient service.

[Wayne]

If anything, people who abuse the Gift option for purchases will ruin it for people who truly want to use it for gifts. Its rather a nice option to have if you really need to give someone money. Its nice not to have to be charged for generosity. But cheap ass people will use and abuse it so that one day nobody can use it....

[Kerry L. Thalmann]

What we really need is a true P2P payment system. There's one out there now called Bitcoin, but it's still rather new and not nearly as ubiquitous, well supported, popular or easy to use as PayPal. Paying someone in Bitcoins is free, with no fees attached. However, to convert back and forth between Bitcoins and dollars (or other currencies) requires using an exchange service that charges a small commission (much less than PayPal fees).

This type of service has great potential for exchanging funds between private parties, but as I see it now (and I'm no expert), it's a bit cumbersome to set up and use, and I don't see any way to resolve disputes built into the system. If you're dealing with someone you trust, that's not a problem. However, when transacting with a stranger half way around the world, having SOME kind of recourse is better than nothing. So, in the end, for now, maybe PayPal is worth the fees for the services they provide. And, remember one of the things you pay for with PayPal is ease of use.

There are other PayPal alternatives to accepting credit card payments. Google Checkout is probably the second most popular after PayPal. Google Checkout fees were originally lower than PayPal's (no doubt to grow their market share), but seem to be catching up rapidly. It has the marketing and technological might of Google behind it, but still isn't as well integrated and popular as PayPal. I've used it on occasion to accept payment from people who absolutely refuse to have anything to do with PayPal.

PayPal also has a direct payment option that lets you accept credit card payments directly from anyone who doesn't have a PayPal account. This is great for the buyer, as it doesn't require them to register or create a PayPal account. They just make a one time payment by entering their name, address and and credit card information. For the seller, it still carries the traditional PayPal fees (which is just a cost of doing business, like a traditional merchant services account for accepting credit card payments).

There is another service, designed to compete with PayPal (they can even be used as a preferred payment option for eBay auctions) called Moneybookers. It looked promising at first, but has been getting absolutely HORRIBLE reviews lately, with all kind of horror stories about locked accounts and frozen assets. What once looked promising now makes PayPal look safe and painless by comparison.

Finally, for relatively small to medium dollar amounts between forum members, you can do what I've been doing lately and just ask them to mail you a check or money order. Yeah, there are risks involved, but I think most of my fellow forum members are decent folk and there are risks involved in everything - including using PayPal. So far, all has gone well and I haven't had any problems with any bad or fraudulent checks. I hope that continues, but if not, I'll chalk it up as a learning experience. In the grand scheme of things, I don't really have the time or energy to fret over the potential that someone might screw me out of $30.00 for a lensboard or couple film holders. If they do, shame in them. They'll have to live with their guilt every time they use those items. This might not work for everyone. If not, use PayPal and pay their fees. Few things is life are free. I'm not sure why anyone would reasonably expect PayPal to be.

BTW, before using any of these alternatives, do your own research. They all have risks. Know what those risks are and don't blame me if you choose one of these alternate payment methods and get screwed by an unethical buyer/seller. Unfortunately, there are bad people out there. That's a sad fact of life. And, no matter how safe you try to be, those bad people are always looking for a way to cheat someone else out of their hard earned cash. Proceed with caution and choose the payment method that YOU think minimizes your risks.

Kerry

[CP Goerz]

If you sell on Ebay you are 'forced' to use paypal, there is no choice*

Most buyers want to use ,but not pay for, paypal convenience, as a seller of many years on that site I find it more of a hassle to deal with paypal than ever. They do me no favors whatsoever.


*-unless you use the other 'paypal-like' companies set up to show the 'variety' of choice you have.

[Michael Graves]

Anything that harms fleabay's quasi-monopolies is all-right in my book.

So you're basically saying that your flagrant disregard for regulations and ethics is acceptable, while their imposition of regulations to protect the consumer and make a profit are not?

Just asking.

[eddie]

okay. i do not ask people to send me "gift" payments, but some do. this is the e mail i received today from paypal:

On Oct 13, 2011, we sent you an email about how you were receiving personal payments for purchases.
The "Personal" payment is for sending money through PayPal to friends and family, it should not be used as a method of payment for purchases of items or services.
Since then, we've noticed that some of your customers are still paying for purchases using the Personal payment option.
As a result, we've disabled your account's Personal payment option. All future transactions will be sent through the "Purchase Goods / Services" option and standard business transaction rates will apply.
You have full access to your PayPal account and can continue to send, receive and withdraw money.
Here's how you can find more information about payment types and fees:
1. Click "Fees" at the bottom of any PayPal page
2. Click "Legal Agreements" at the bottom of any PayPal page, and then click "PayPal User Agreement." Sections 4 and 8 refer to receiving money and fees.
If you have any questions, concerns, or think we may have made a mistake, please contact us at P2P@paypal.com.

[ghe67]

Interesting... but I think there is no need to pay goods with the Paypal GIFT options, just add 3% on the total and problem solved.
Giorgio

[tadler]

does someone know the total fees we pay as sellers - paypal and ebay seller fees combined? i recently sold some cheap items on ebay, sent from Europe to USA. shipping was more expensive than the items themselves, and I had a feeling after all fees i actually gave the items for free...

[eddie]

paypal and ebay seller fees combined? .

8-15%

[eddie]

Interesting... but I think there is no need to pay goods with the Paypal GIFT options, just add 3% on the total and problem solved.
Giorgio

that violates paypal's rules. the buyer is supposed to be able to buy with no extra fees.

now just listing an item for 3% more is fine. but asking the buyer to pay the fees violates their rules.

[ghe67]

We are speaking about rules written by a company of "thieves & beggars"..
as ebay also are.
so, I'm totally away from their rules sorry.
Giorgio

[Brian Ellis]

When I sell anywhere other than ebay I give the buyer an option of check, money order, bank check, or Pay Pal. If they choose to use Pay Pal then I require that they pay the fees, which I think is fair since they could have used other means and not incurred the fee. When I sell on ebay I reluctantly eat the fee. I can't realistically jack up the price to include the fee because then my item is more expensive than the same or comparable items sold by others. And I don't allow use of the gift option because it isn't a gift.

I actually don't use ebay much any more ever since they imposed the requirement that only Pay Pal be used for payment. Hopefully lots of other people are doing the same and their monopolistic practice of requiring payment by Pay Pal is costing them net money though I doubt it.

[eddie]

We are speaking about rules written by a company of "thieves & beggars"..
as ebay also are.
so, I'm totally away from their rules sorry.
Giorgio

i understand.

i agree with you.

funny thing is i have been playing by the rules. i never asked anyone to send me a gift payment. if i did not want to pay the fees i just asked for a check instead of paypal and i just waited for it to arrive. or, if it was a large enough sum of money and the buyer was outside of the USA i used a bank transfer.

oh well. you gotta pay to play.

[eddie]

basically what people need to understand is that if they choose to send a gift payment or any kind of payment that avoids the fees DO NOT WRITE ANYTHING ON THE RECEIPT!

many time people add their shipping address or say "for brass lens" this tips off the paypal crawlers....i believe that is what happened to me. i got a payment with an address written in the comments box.....at least it was for $1k and not 50 bucks!

[Brian Ellis]

My thoughts exactly. IMO, just include any fees in the asking price without the nonsense of splitting the fees up etc.
Erik

I'm selling a lens for which I want to net $1,000 so I add the Pay Pal fee and ask $1,030 for it. But another seller is selling the same lens and he or she is willing to eat the Pay Pal fee so the price is $1,000. Which lens do you think will be sold?

[eddie]

I'm selling a lens for which I want to net $1,000 so I add the Pay Pal fee and ask $1,030 for it. But another seller is selling the same lens and he or she is willing to eat the Pay Pal fee so the price is $1,000. Which lens do you think will be sold?

the one with the better description.

the better lens.

the better return policy.

the one with better pictures.

the seller that is more trustworthy....or the buyers perception of such.

etc etc. i can sell items for higher prices at time cause the buyers know they get EXACTLY what i say, no surprises, no gimmicks. no hassles. i accept returns no problem.

i will accept a return for ANY reason. i will even take a lens back some one bought form me years ago! can you image how nice it would be to have some one return a dallmeyer 3b to me from 4 years back......that they paid $350 for?!

[BrianShaw]

The psychology of selling successfully is very complex, but many of the factors eddie mentioned are pretty much guarantees for selling success in a competetive environment.

[BradS]

i understand.

i agree with you.

funny thing is i have been playing by the rules. i never asked anyone to send me a gift payment. if i did not want to pay the fees i just asked for a check instead of paypal and i just waited for it to arrive. or, if it was a large enough sum of money and the buyer was outside of the USA i used a bank transfer.

oh well. you gotta pay to play.


Eddie's right ( in the quoted post and all the subsequent posts he has made). Further, I think it best to play fair and deal honestly. Paypal's rules say that the seller pays the fees. We should all play be the rules. Doing otherwise, demanding that buyers send payment "as gift" is cheating and dishonest. Why would anybody buy from an openly dishonest seller? I sure will not.

[BradS]

We are speaking about rules written by a company of "thieves & beggars"..
as ebay also are.
so, I'm totally away from their rules sorry.
Giorgio

it is a corporation...in business to make money. They offer a very valuable service to both buyers and sellers. If you are not willing to pay the price they charge...do not use the service!

[goamules]

Here is a worse case scenario. A friend contacts me asking if I can find him a (Leica, Wooden Camera, etc.). I search and find the item from a private seller in my network.
The buyer pays me via paypal, I get Fee'd.
Then I immediately pay the original seller, another Fee. Paypal gets a large chunk of money twice (based on the amount, not the service) for electronically transferring virtual money.
If I take my profit and now go buy something on ebay, Ebay get's their fee, then Paypal get's their fee again. That's 4 times the Pay-Bay empire gets paid for the same chunk of money. It seems like it's a diminishing return - eventually in a virtual payment world, Pay-Bay will get all the money!

[BrianShaw]

Garrett, I counted two services in your scenario, and more services when you bought more stuff. :o

[goamules]

Well...OK, my exaggeration knows no bounds when on a rant!

[BrianShaw]

... but you're right, in the end someone else is going to have ALL of our money and we might have very little to show for it.

[jnantz]

i went into a coffee shop the other day, and instead of $1.10 i was charged 1.43 ( 1.10 + .03+30¢ )

i'm glad i didn't buy the cookie.

[tadler]

Here is a worse case scenario. A friend contacts me asking if I can find him a (Leica, Wooden Camera, etc.). I search and find the item from a private seller in my network.
The buyer pays me via paypal, I get Fee'd.
Then I immediately pay the original seller, another Fee. Paypal gets a large chunk of money twice (based on the amount, not the service) for electronically transferring virtual money.
If I take my profit and now go buy something on ebay, Ebay get's their fee, then Paypal get's their fee again. That's 4 times the Pay-Bay empire gets paid for the same chunk of money. It seems like it's a diminishing return - eventually in a virtual payment world, Pay-Bay will get all the money!

yes, in this hypothetical example pay-bay will have all the money at the end assuming only if you start with a limited and non renewable amount. in the real life you, your friend and other people around would have exchanged many items which would otherwise lay unused or tossed away. post services, tax authorities, messengers, etc will be busy and benefit around these 2nd hand exchanges. in addition, some new money will be generated around and due to the use of these exchanged items. isn't it one of the things market is about? mediators and middlemen always managed to get (exaggerated) percentages but wise and practical decisions with what we buy and what we do with it generates more funds for us.
the only thing i would propose in these dynamics is to find a way to force pay-bay to reduce their greed and lower the fees. craig lists of all sorts are one way to do so. one-week-without-ebay is another option and i'm sure large online communities will be happily mobilized to send pay-bay a message.
:)

[Brian Ellis]

the one with the better description.

the better lens.

the better return policy.

the one with better pictures.

the seller that is more trustworthy....or the buyers perception of such.

etc etc. i can sell items for higher prices at time cause the buyers know they get EXACTLY what i say, no surprises, no gimmicks. no hassles. i accept returns no problem.

i will accept a return for ANY reason. i will even take a lens back some one bought form me years ago! can you image how nice it would be to have some one return a dallmeyer 3b to me from 4 years back......that they paid $350 for?!

I'm not talking about selling to someone who knows me. I thought we were talking about ebay or some other impersonal method of selling. In that context most people buy on the basis of price when it comes down to two identical or essentially identical items.

[eddie]

I'm not talking about selling to someone who knows me. I thought we were talking about ebay or some other impersonal method of selling. In that context most people buy on the basis of price when it comes down to two identical or essentially identical items.

they do not have to "know" me. people on ebay "know" me. all they have to do is google me and it comes up. i believe that is how most people find me either way.

your example was for a lens.

on e bay, i sell lenses. all that info i posted above is easily found in my "impersonal" e bay ad.

everything i stated above can be deemed from my e bay ads.....here they are again:

the one with the better description.

the better lens.

the better return policy.

the one with better pictures.

the seller that is more trustworthy....or the buyers perception of such.

etc etc. i can sell items for higher prices at time cause the buyers know they get EXACTLY what i say, no surprises, no gimmicks. no hassles. i accept returns no problem.

my ads have better descriptions. they have a better return policy. they are better lenses (generally). i have better photos. i am more trustworthy than most sellers. so yes, this will work on ebay and for impersonal ads.

[BrianShaw]

I tend to assess sellers using the criteria eddie mentions. Generally it works and often I'm willing to pay just a bit more for that assurance. On occasion it doesn't work... like a situation I'm in right now with a national retailer.

But Brian makes a good point -- sometimes the seller who is willing to lower their profit margin will make the sale faster than one who insists on maximizing their profit. Watchwords for me are "net to me", "paypal as gift", and "shipping, insurance, and paypal fees to be payed by the buyer".

[eddie]

IWatchwords for me are "net to me", "paypal as gift", and "shipping, insurance, and paypal fees to be payed by the buyer".

for me it is "no return". i just figure that that means it is broken and s/he knows it.

[BrianShaw]

Actually, eddie, I intentionally left that one off of my list of redflag words. I have bought lots with "no return" and had very good luck. I suppose there are others that could be mentioned, like: "I'm not a photographer and don't know how this stuff works", and "I buy from government auctions and move such a large quantity of goods that I can't possibly check it to see if it works or not so take your chances and hope for the best but you can believe me I'm trustworthy and can be trusted but since I'm so busy making money and can't be bothered with customer service please remember that I have a no return policy and enforce it".

[BrianShaw]

Oh yes...a nd my favorite of all times, "I'm not responsible once I hand the box over to the shipper."

[scm]

I've done a bit (OK, more than a bit) of selling on eBay, mostly cameras, computers and guitars, with some motorcycle stuff thrown in, and have a no return policy. I wish I could add "without a good reason" to the "no returns", as that's what it actually means to me. I've accepted returns well after the 45-day "buyer dispute" period and even refunded money without requiring the return of the merchandise if the situation warranted. I'm always willing to listen.

Even with a "no return" policy, PayPal will side with the buyer 90%+ of the time in a "not as described" dispute situation, I've only run in to that as a seller a couple of times in a couple of thousand transactions and it's always been because they didn't talk to me first. I've filed plenty of them as a buyer, though.

I'm not at all interested in selling merchandise that isn't as described or selling someone something they don't need or want, what I'm trying to avoid is returns because of buyers remorse or because they didn't do their homework and understand what they were buying.

But that's just me.

[domaz]

... but you're right, in the end someone else is going to have ALL of our money and we might have very little to show for it.


Well don't forget about the scammers. A big reason Paypal fees are high is because of scammers. If you don't believe me how many times has your credit card been hacked? I'm guessing at least once. In fact it's happened to everyone in my office at least once. And guess how many times they get away with it? Basically every time. It's a big drag on all financial transactions.

[mikebarger]

I saw an interesting one in an ad earlier this month. Seller stated s/he would not mark any forms as gift or indicate the sold price was lower than actual selling price.

Then goes on to ask the buyer to mark their the payment as a gift?

Mike

[eddie]

I've done a bit (OK, more than a bit) of selling on eBay, mostly cameras, computers and guitars, with some motorcycle stuff thrown in, and have a no return policy. I wish I could add "without a good reason" to the "no returns", as that's what it actually means to me. I've accepted returns well after the 45-day "buyer dispute" period and even refunded money without requiring the return of the merchandise if the situation warranted. I'm always willing to listen.

what I'm trying to avoid is returns because of buyers remorse or because they didn't do their homework and understand what they were buying.

But that's just me.

why? why bother if 90% of teh time e bay and paypal make you accept a return anyway? who cares if they have buyers remorse? especially with 1000s of sales. easy to absorb it. i can see if you sold 3 items a month and two get returned it would be bad. make the buyers remorse pay for the shipping. cancel the the transaction and get your fees back.

it just sounds bad to say "no returns" IMO.


I saw an interesting one in an ad earlier this month. Seller stated s/he would not mark any forms as gift or indicate the sold price was lower than actual selling price.

Then goes on to ask the buyer to mark their the payment as a gift?

Mike

har har har!

[Pete Roody]

Well don't forget about the scammers. A big reason Paypal fees are high is because of scammers. If you don't believe me how many times has your credit card been hacked? I'm guessing at least once. In fact it's happened to everyone in my office at least once. And guess how many times they get away with it? Basically every time. It's a big drag on all financial transactions.

Credit Card companies do pay for scammers! They typically pick up the tab for malicious charges. But Paypal typically doesn't. Paypal for a long time made the seller responsible if the buyer used a stolen credit card for instance. I don't know if this is still true but it wouldn't surprise me if they still do this.

[Pete Roody]

I think your feedback rating is a key to selling with a 'no return' policy. Most people just want the item to match the description and the description to be informative. Once they see that many other people have bought from you and you were honest, they will buy.

That said, I agree with eddie that saying 'no returns' does not protect the seller. All the buyer has to do is open a case against the seller and say the item was not as described. Paypal freezes the sale price amount in your account until resolution of the case is finalized. Ebay forces the seller to take the buyers terms (usually a full refund). To fight it is not worth it for the seller.


why? why bother if 90% of teh time e bay and paypal make you accept a return anyway? who cares if they have buyers remorse? especially with 1000s of sales. easy to absorb it. i can see if you sold 3 items a month and two get returned it would be bad. make the buyers remorse pay for the shipping. cancel the the transaction and get your fees back.

it just sounds bad to say "no returns" IMO.



har har har!

[Brian Ellis]

I just got an email message from Pay Pal saying "we're writing to let you know about a change to your PayPal account. Starting 12/25/2011, money from payments you receive will be placed in a pending balance for up to 21 days. By doing this, we're making sure that there's enough money in your account to cover potential refunds or claims." They go on to talk about a couple ways to get it faster.

I'm not sure whether they mean this or whether I just happened to get a form letter. I remember when they started this 21 day business a couple years ago. At that time they applied it to me for a couple transactions, then as my ebay sales approached 100 with continued 100% perfect feedback they dropped it and haven't been applying it since.

Maybe this letter means they're going to start again, who knows. I don't plan to use ebay any more except as a last resort after trying other places (e.g. Fred Miranda, photo.net, here, etc.). Ebay charged $75 or so on a recent sale of a lens for about $800, then Pay Pal charged another $25 or so on top of that.

[eddie]

I just got an email message from Pay Pal saying "we're writing to let you know about a change to your PayPal account. Starting 12/25/2011, money from payments you receive will be placed in a pending balance for up to 21 days. By doing this, we're making sure that there's enough money in your account to cover potential refunds or claims." They go on to talk about a couple ways to get it faster.


they did that to my wife's account. on and then off and then on and then off.

they are crazy.

just trying to use our money for free. bastards.

call em and tell em to take it off.

they re-evaluate every month so you wanna be sure you do not wait any extra time.....

[Dan Fromm]

Interesting discussion, if a bit full of fact-free rants.

Here https://cms.paypal.com/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/fees is what PayPal says about who they charge and how much.

For sellers who don't want to deal/put up with PayPal, get merchant accounts with Amex, MC, and Visa. You'll love 'em, absolutely love 'em.

[BrianShaw]

For sellers who don't want to deal/put up with PayPal, get merchant accounts with Amex, MC, and Visa. You'll love 'em, absolutely love 'em.

Har har har!

[goamules]

As far as taking returns, I put in all my Ebay ads,
"I will gladly refund your bid price if we both agree the item is not as described. Buyer pays shipping. Contact me first for instructions, and return authorization."

That has never happened to me since I've been selling since 1998, 100% feedback. The idea is to 1) describe the item so well there can be no uncertainty, 2) agree to returns only if the item doesn't match the description. The request for contacting me first is so I have a chance to cool them down so I can get good feedback. Again, I've never needed to worry, because I don't sell small, cheap items, nor electronics. Both generate a HUGE amount of neg feedback.

[Ivan J. Eberle]

Brian, they tried the same 21-day funds-hold on future transactions with me, for no apparent reason, too. (100% feedback, no claims whatsoever, above 4.5 on all the Dashboard metrics, etc). So I called up PayPal and said, "Whattaya mean, 'future transactions'? There won't be any."
Enough folks do this, it'll change.

Do tell, Eddie, how does one receive a bank transfer-- w/o giving away too much identifying information that someone could spoof your ID? (Seriously, I want to know how. I'm so done with PayPal.)

[John NYC]

Do tell, Eddie, how does one receive a bank transfer-- w/o giving away too much identifying information that someone could spoof your ID and run up a big negative balance? (Seriously, I want to know how. I'm so done with PayPal.)

I would be curious to hear this, too. For one, wire transfers usually cost around $25. Two, they require the sender to know your bank routing number and your account number.

I suppose you could set up an account just for the purpose of receiving money. And move all money out right when it comes in.

But PayPal is just fine for me, with the little I use it.

[eddie]

As far as taking returns, I put in all my Ebay ads,
"I will gladly refund your bid price if we both agree the item is not as described. Buyer pays shipping. Contact me first for instructions, and return authorization."



still sounds dodgy. if you do all you say then you will (and have not) had any issues. saying what you say, IMO, indicates a bit of suspicion on my part of those sellers for reasons i listed above.

in the end of the day you do not get to decide.....paypal and ebay do. so why bother with such harsh terminology?

[eddie]

Do tell, Eddie, how does one receive a bank transfer-- w/o giving away too much identifying information that someone could spoof your ID? (Seriously, I want to know how. I'm so done with PayPal.)


I would be curious to hear this, too. For one, wire transfers usually cost around $25. Two, they require the sender to know your bank routing number and your account number.

I suppose you could set up an account just for the purpose of receiving money. And move all money out right when it comes in.

But PayPal is just fine for me, with the little I use it.

i am not sure about the intricacies of banking safety protocols. i asked my banker several times to be sure that no one could steal my money by giving the info such as routing # and accout number...BUT remember that that info is on every check you write. many people see a check you write along the way. so i do not believe routing # and bank account # opens you up to possible fraud. ask your banker. i will ask mine again today and get the answer....and i will remember it this time!

yes, in the USA the fee is $25. overseas it is $40. but if you are selling an item for over $1000 the fees beat paypal. i have accepted several thousand $ payments form overseas using a bank transfer several time with no issues. for the USA i just tell them to send me a check.....saves me all the fees.

BUT, i do have a account that is only for paypal and transfers and other dodgy companies. it holds no money and is separate from my living funds.

just because i am paranoid does not mean they are not trying to get me.....har har har!

eddie

[Michael Graves]

I saw an interesting one in an ad earlier this month. Seller stated s/he would not mark any forms as gift or indicate the sold price was lower than actual selling price.

Then goes on to ask the buyer to mark their the payment as a gift?

Mike

Hypocrisy is a wonderful thing, isn't it? When buying from somebody, I look at a request of any sort to dodge the rules as a true sign of their integrity. If they are willing to cheat Peter, what makes me think they won't cheat Michael? How much faith can you have in somebody who advertises on an Internet site that they are willing to violate rules and regulations? If you don't like the service -- don't use it! But if you use it, follow the #$#$%$#$# rules! And the rules, according to Paypal's rather lengthy policy statement include:

Gifts are intended to allow people to send money -- oddly enough, as a gift -- without the recipient incurring any fees. Anyone who can read English (or any of the various other languages in which the document may be obtained) can clearly see that they specify that the sale of products is NOT allowed to be processed as a gift.

They also specify that the seller cannot add fees for using the Paypal service. That is part of the cost of doing business. When you place an add that says that they buyer must pick up the fees, you are in violation of the rules. That is not to say that you cannot negotiate with the buyer to pick up the fees. There is no problem with that. Making it a term of the sale is the problem. And that is only exacerbated when the seller says, "PayPal only. You pay the fees." If the seller is dictating the terms then the seller is showing their true colors by forcing the issue.

As far as returns go, I don't see any hard and fast rule there regarding our forum. Personally, if somebody asks to return something because it isn't in the condition they expected, I have no problem with that. I try to be careful with my descriptions, but like everybody else, I miss things occasionally. I do, however, expect the buyer to pick up return shipping. Since I buy a whole lot more than I sell here I have been the recipient of three clinkers. Only once did it turn into an issue, and I just bit the bullet and ignore that seller now. The other two individuals had no problem whatsoever taking back the item, and I had no problem picking up the return shipping.

Ebay is another animal all together. All in all, I have had very good success as a buyer. Only once did I ever file a complaint against a seller. I received a camera listed as being in good condition. The shutter was jammed, it was encased in some white mildew or mold and all the chrome was so rust-pitted it looked brown. Either they had photographed a completely different camera for the listing, or somebody was EXCELLENT with Photoshop. When I said I wanted to return it, they gave me the electronic equivalent of the finger and told me to read the ad. No returns. I told them to read this....and filed a complaint with eBay. Therefore, I have a strong appreciation for their buyer protection plan.

[lenicolas]

Gifts are intended to allow people to send money -- oddly enough, as a gift --

It's not that odd...
I had a friend who visited me in Norway a couple of years ago, and lost his wallet.
He had his family send him money through western union.
The fees were worst than paypals ;)

When he ran out of cash a few days later, instead of going western union again, i just gave his parents my email adress and they sent me money through paypal.
I withdrew it and gave it to him. for free.

I agree it's not that useful, and unlike the ebay situation, they don't have a monopoly for money transfer between people, but they are a cheap alternative to western union or bank transfers...



As for the OP's question, i agree with what was said (seveal times) above : just list your items a little bit higher and pay for all fees without bothering the buyer.

Any reasonable Ebay user with at least 10 transactions knows that you shouldn't buy from the cheapest seller. It's something you learn prety soon when buying on Ebay. ;)

[Michael Graves]

[QUOTE=lenicolas;823746]It's not that odd...QUOTE]

Actually, the comment was intended as subtle sarcasm. I don't find it odd at all. I only find it odd that people object when Paypal does something about. Eddie's experience shows what can happen, even if you are NOT soliciting people to do it. I've dealt with him before, and he never once asked me to use the gift option. Nor do I ask for that option when I'm selling, although I have had people do it for me as a courtesy. I have also done it for other people as a courtesy. It was not my intent to suggest that using the "gift" option was always a matter of fraud. Only REQUIRING someone to use it.

[Scott Davis]

I recently sold a $2000 camera (my Zone VI 8x10) through here, and the camera went to someone in Hungary. I took PayPal, and we agreed to split the fee as it was not an inconsequential sum, especially once the shipping was factored in. However, as mentioned before in this thread, requiring that the buyer pay the fee is a violation of the PayPal terms of service. I was glad to use PayPal because it did offer me some degree of protection in the case that something went wrong - especially as the camera was being shipped to a distant corner of the planet. Everything did go well, and I'm glad the buyer got his camera and was happy with it. The peace of mind of having some kind of seller protection was in the end worth the 3% - I'd much rather be $60 poorer than $2000 poorer if something went wrong. From the buyer's perspective, if you pay by credit card when paying by PayPal, you always have the extra protection of your credit card's chargeback function, which in most cases is far better than PayPal's. For most things over $50, that's what I do - I learned my lesson the hard way when buying a film back for a Hasselblad.

I saw a newer-style A12 back listed on Ebay. The seller was (and still is) a well-known commercial photographer in LA. I bought it in preparation for going to Spain for two weeks. I thought I had enough time to receive it when I bought it. The seller dawdled with shipping it, so I asked him was there some way to expedite the shipping to be sure I got it in time? His response? "Expedited" meant that he took it to UPS and sent it UPS Ground from LA to DC. It was "Expedited" because he was planning to go to UPS the next day anyway, instead of waiting until the following week to put it in US Mail. I sent him a note expressing my disappointment about his "expediting" (the UPS Ground time quoted at the time was 7-9 days. It arrived in 9. USPS Priority Mail or FedEx would have put it there in 4). The back arrived the day before I left, and as it appeared the same cosmetically as it did in the photos, I merrily went on my way and used it in Spain. When I got back, the developed film told a different story - the gearing was worn out from over-use, and it would overlap the first two frames, then skip large gaps between all subsequent frames. I contacted him when I got back and told him about it and asked if he would split the cost of a repair - he told me in not so polite terms he was disinclined to acquiesce to my request because he felt he had done me a favor by "expediting" the shipping, and I was ungrateful. I opened a dispute with PayPal AND Ebay at that point, and they both just sat on it, never responding to my follow-up inquiries, until the dispute period had passed. Maybe their policies have changed significantly since that time (I want to say that was in 2005) but back then it was totally pro-seller.

[Michael Jones]

Maybe their policies have changed significantly since that time (I want to say that was in 2005) but back then it was totally pro-seller.

They might have; I just had the same experience as Michael. As the buyer, I complained and within 24 hours and one email, I had my money & return shipping back. Then the onus was one me to return the goods.

While I was unhappy about the transaction, I was pleased how eBay (& PayPal) handled it.

I, too, dislike the fees both charge, but business is business. They are in it for profit and I charge it off as a cost of doing business when I use their services. I charge people for what do in my real life, so I cannot complain.

I have to chuckle over PayPal's slogan about being the world's most loved way to pay & be paid...

Mike

[Scott Davis]

If someone were being truly honest about the world's most loved way to pay and be paid, it would have something to do with cash and prostitution. As it is, I'll leave the decision up to the PayPal marketing team.

[Vlad Soare]

I have to chuckle over PayPal's slogan about being the world's most loved way to pay & be paid...
Well, considering that there are probably millions of users, and we only hear from a few tens of unsatisfied ones (most of whom continue to use PayPal despite their lack of satisfaction), I think their claim might not be as false as it seems to be at first glance. :)
PayPal may be risky for a US-based seller, but for a buyer (or seller, for that matter) located outside US it's a real blessing.

[Brian Ellis]

i am not sure about the intricacies of banking safety protocols. i asked my banker several times to be sure that no one could steal my money by giving the info such as routing # and accout number...BUT remember that that info is on every check you write. many people see a check you write along the way. so i do not believe routing # and bank account # opens you up to possible fraud. ask your banker. i will ask mine again today and get the answer....and i will remember it this time! . . . eddie

I wouldn't rely on anything any banker told me about the safety of my account and funds. If someone taps your account the bank is not going to reimburse you no matter what you were told. Remember, these are the people who made billions of dollars by pooling bad mortgage loans and who now are foreclosing on people who can't pay loans the bank knew were bad at the time they were made. These people are not out to protect you, they're out to make money off of you any way they can.

[eddie]

These people are not out to protect you, they're out to make money off of you any way they can.

yes sir.




BUT, i do have a account that is only for paypal and transfers and other dodgy companies. it holds no money and is separate from my living funds.

just because i am paranoid does not mean they are not trying to get me.....har har har!

eddie

[Ron McElroy]

I wouldn't rely on anything any banker told me about the safety of my account and funds. If someone taps your account the bank is not going to reimburse you no matter what you were told. Remember, these are the people who made billions of dollars by pooling bad mortgage loans and who now are foreclosing on people who can't pay loans the bank knew were bad at the time they were made. These people are not out to protect you, they're out to make money off of you any way they can.

Just a FYI the company I work for has one 2 occasions had someone passing counterfeit checks. The police told use that anyone knowing the account and routing numbers could do the same.

[John NYC]

Just a FYI the company I work for has one 2 occasions had someone passing counterfeit checks. The police told use that anyone knowing the account and routing numbers could do the same.

Yes.

Despite Eddie's confidence in normal bank transfers, they are definitely not as secure as PayPal. And since I only sell very infrequently and not very large ticket items, the fees are cheaper than a bank transfer as well.

[Scott Davis]

Theoretically, a paper napkin with proper routing and account numbers works as a check. Although I dare you to try it. And I will not be held accountable for the consequences if you do.

[John NYC]

just trying to use our money for free. bastards.



So are the banks. How much interest are you getting on that checking account today?

Do you honestly think the banks are any more caring about you than any other big corporation? They are there to make money and that is all. If you happen to like the services they offer to make money, such as $25 for a bank wire transfer, better than paypals staggered fees, that is just a matter of your particular preference or situation.

For me, I think it is outrageous to charge $25 for a bank wire transfer for a small amount of money that happens at the push of a button electronically and takes about 5 seconds for someone to key in.

[Ivan J. Eberle]

And then there's the float on delaying when to let you have at that money, if it's over $5K--complements of DHS and Check 21. Banks really could stand much greater regulatory oversight (rather than giving them the keys to the candy store).
And PayPal should be declared a banking institution subjected to the same regulation. It's akin to someone hanging out a sign calling themselves a doctor and performing surgery without ever taking medical boards or having gone to medical school.

[John Koehrer]

oversight on banks was basically repealed when glass/segal was.
Thank you very much.

[John NYC]

oversight on banks was basically repealed when glass/segal was.
Thank you very much.

Just a correction in case people go looking for it... It is glass steagall

[eddie]

So are the banks. How much interest are you getting on that checking account today?

Do you honestly think the banks are any more caring about you than any other big corporation? They are there to make money and that is all. If you happen to like the services they offer to make money, such as $25 for a bank wire transfer, better than paypals staggered fees, that is just a matter of your particular preference or situation.

For me, I think it is outrageous to charge $25 for a bank wire transfer for a small amount of money that happens at the push of a button electronically and takes about 5 seconds for someone to key in.

paypal holds teh money for 21 days. most banks do not do that!





And PayPal should be declared a banking institution subjected to the same regulation. It's akin to someone hanging out a sign calling themselves a doctor and performing surgery without ever taking medical boards or having gone to medical school.

yes yes yes yes ..... please

[John NYC]

paypal holds teh money for 21 days. most banks do not do that!


Your bank holds funds as well for checks and even for transfers until it clears. Not only that if the payers check bounces the bank charges YOU $35 dollars or so. The advantages of PayPal for a lot of online transactions are numerous. If the banks are so fabulous let them come out with a product that competes in that space.

[eddie]

Your bank holds funds as well for checks and even for transfers until it clears. Not only that if the payers check bounces the bank charges YOU $35 dollars or so. The advantages of PayPal for a lot of online transactions are numerous. If the banks are so fabulous let them come out with a product that competes in that space.

1st of all i never said the banks were great.

i have always followed paypal's rules. i am not even upset that they took away my ability to receive gift payments. i really never even used them.

you are comparing apple and oranges. paypal holds money that is yours for 21 days (some people). there is no bounced checks. the money is there. the money is yours. paypal's job is transferring money. not policing you. they are overstepping their bounds holding people's money for 21 days. that is excessive and un warranted! if they held it till the buyer received the goods and an extra 2 or 3 days then i would have less to say.

keeping people's money for 21 days is wrong. they are just using millions of dollars from millions of people for free......they are making million and millions of "extra" dollars with this.

OH! for the record. they do not hild MY money....:p ;)

[Michael Graves]

...requiring that the buyer pay the fee is a violation of the PayPal terms of service...

The key here is "requiring". However, if in the terms of negotiation, both parties come to an agreement on distribution of fees, this is not something Paypal can regulate. As far as I can tell, you did nothing wrong is agreeing to split the fee.

[John NYC]

keeping people's money for 21 days is wrong. they are just using millions of dollars from millions of people for free......they are making million and millions of "extra" dollars with this.

OH! for the record. they do not hild MY money....:p ;)

Have you ever thought about why they have that policy? They are not a bank and they do not have the same types of capital raising ability. I would imagine that having that 21 day policy helps them ensure there is enough money in their system to refund payments and deal with other operating issues.

I don't find it unreasonable, but obviously you do. But then again, you somehow think that a $25 wire fee on a cheap item is ok.

[John NYC]

okay. i do not ask people to send me "gift" payments, but some do. this is the e mail i received today from paypal:

On Oct 13, 2011, we sent you an email about how you were receiving personal payments for purchases.
The "Personal" payment is for sending money through PayPal to friends and family, it should not be used as a method of payment for purchases of items or services.
Since then, we've noticed that some of your customers are still paying for purchases using the Personal payment option.
As a result, we've disabled your account's Personal payment option. All future transactions will be sent through the "Purchase Goods / Services" option and standard business transaction rates will apply.
You have full access to your PayPal account and can continue to send, receive and withdraw money.
Here's how you can find more information about payment types and fees:
1. Click "Fees" at the bottom of any PayPal page
2. Click "Legal Agreements" at the bottom of any PayPal page, and then click "PayPal User Agreement." Sections 4 and 8 refer to receiving money and fees.
If you have any questions, concerns, or think we may have made a mistake, please contact us at P2P@paypal.com.


It is a transaction between TWO people. PayPal can't use ESP to determine that you didn't want the payment sent as a gift. If someone sent me payment as a gift for a purchase I would refund the money and use Paypal to invoice then the correct amount.

The fees are how they make money. The rules are there to protect their business. And you let too many purchases slide as gifts. You were breaking their rules.

[John NYC]

No I am not looking for a fight. What I am doing is trying to prevent people from falling into some trap by reading your claims that PayPal is outrageous in its practices, since that is the best way for me to buy and sell on this forum. There are enough people here who boycott it for no good reason as it is.

[Brian Ellis]

Have you ever thought about why they have that policy? They are not a bank and they do not have the same types of capital raising ability. I would imagine that having that 21 day policy helps them ensure there is enough money in their system to refund payments and deal with other operating issues.

I don't find it unreasonable, but obviously you do. But then again, you somehow think that a $25 wire fee on a cheap item is ok.

The money Pay Pal holds isn't their money and I'd be amazed to find that they commingle customers' money with their own and use customers money for their own operating purposes. If they ever need to raise capital just to make refunds to customers they'd be in such bad shape that there would be no point in even trying to raise the capital.

As long as they keep customer's money separate from their own money as they surely do there's no way they'll ever not have enough money on hand with which to make refunds. In fact they'll always have far more money on hand than they need to make refunds.

Which leads us to the real reason why they hold money for 21 days. If you look at Ebay's annual report for 2009 (haven't seen the 2010 report, as I'm sure you know Ebay owns Pay Pal) you'll see that Pay Pal had net payment volume for the year of $71 billion. Hmm - I wonder how much interest I could earn if I could persuade people to give me $71 billion of their money over the course of a year and let me hold it for 21 days?

[John NYC]

The money Pay Pal holds isn't their money and I'd be amazed to find that they commingle customers' money with their own and use customers money for their own operating purposes. If they ever need to raise capital just to make refunds to customers they'd be in such bad shape that there would be no point in even trying to raise the capital.


The money banks hold is not theirs either. I am not saying PayPal mixes corporate holding with their users'. I am assuming they can't have a physically separate account for each customer. Ultimately this money has to be held in a custody account at a financial institution. And if so, they need rules to ensure their cash flows are working efficiently.

[John NYC]

The money banks hold is not theirs either. I am not saying PayPal mixes corporate holding with their users'. I am assuming they can't have a physically separate account for each customer. Ultimately this money has to be held in a custody account at a financial institution. And if so, they need rules to ensure their cash flows are working efficiently.

And my assumption is correct... From the PayPal user agreement...

"While your funds are in our custody PayPal will combine your funds with the funds of other Users and place those pooled funds into Pooled Accounts with one or more banks. These Pooled Accounts will be held in PayPal's name for the benefit of its collective Users at one or more banks. Balances in U.S. Dollars that are held in Pooled Accounts at one of the banks may be eligible for FDIC pass-through insurance. In addition, the issuer of the PayPal Debit Card, The Bancorp Bank, holds debit card customer balances in a pooled account held in the debit card issuer’s name for the benefit of PayPal debit card users."

[Brian Ellis]

And my assumption is correct... From the PayPal user agreement...

"While your funds are in our custody PayPal will combine your funds with the funds of other Users and place those pooled funds into Pooled Accounts with one or more banks. These Pooled Accounts will be held in PayPal's name for the benefit of its collective Users at one or more banks. Balances in U.S. Dollars that are held in Pooled Accounts at one of the banks may be eligible for FDIC pass-through insurance. In addition, the issuer of the PayPal Debit Card, The Bancorp Bank, holds debit card customer balances in a pooled account held in the debit card issuer’s name for the benefit of PayPal debit card users."

Of course your assumption was correct, nobody could possibly think they opened a separate bank account for each customer. But thanks for posting this because it confirms what I said, which is that Pay Pal doesn't commingle customers' money with their own, they hold it in separate pooled funds for the benefit of Pay Pal's collective users, i.e. its customers. And since the money isn't commingled with Pay Pal's money there's no need to worry about ever having insufficient funds with which to make refunds. Which means your justification for having the 21 day holding period was wrong.

[John NYC]

Of course your assumption was correct, nobody could possibly think they opened a separate bank account for each customer. But thanks for posting this because it confirms what I said, which is that Pay Pal doesn't commingle customers' money with their own, they hold it in separate pooled funds for the benefit of Pay Pal's collective users, i.e. its customers. And since the money isn't commingled with Pay Pal's money there's no need to worry about ever having insufficient funds with which to make refunds. Which means your justification for having the 21 day holding period was wrong.

No you are not getting what I am saying. It is the timing and cash flows they need to mange to be efficient. Not that they won't have enough money in total.

[John NYC]

And here is the official word from PayPal on the 21 day hold policy. I personally have never had this put on my account...

"When some sellers receive payments, we may hold the money in a pending balance for up to 21 days to help make sure that there are funds in the seller's account to cover potential refunds or claims. The funds may be released early if PayPal determines that the transaction has been fulfilled and customers are satisfied.

While funds are pending, the money belongs to you but isn't available to spend or withdraw.

If payments on your account are held, we'll notify you. PayPal will re-evaluate your account every 35 days and decide whether or not to continue holding payments. If we decide to stop holding future payments, we'll contact you."

[Brian Ellis]

And here is the official word from PayPal on the 21 day hold policy. I personally have never had this put on my account...

"When some sellers receive payments, we may hold the money in a pending balance for up to 21 days to help make sure that there are funds in the seller's account to cover potential refunds or claims. The funds may be released early if PayPal determines that the transaction has been fulfilled and customers are satisfied.

While funds are pending, the money belongs to you but isn't available to spend or withdraw.

If payments on your account are held, we'll notify you. PayPal will re-evaluate your account every 35 days and decide whether or not to continue holding payments. If we decide to stop holding future payments, we'll contact you."

I know what Pay Pal gives as the reason for their policy, they explained it in the letter they sent me back when they first were going to put a 21 day hold on my funds. But they only instituted that policy within the last year or two. They seemed to get along just fine for many years before that without holding money for up to 21 days. And how fortuitous that this relatively new policy also happens to allow them to earn interest for up to 21 days on the $71 billion of other people's money that passes through their hands in the course of a year?

John, you have one view of Pay Pal and their motives, I have another. It may be that you're right, I'm right, or we're both right. I appreciate your explanations of Pay Pal's reasons for doing what they do, I just don't think they're telling the whole truth. But since we're never going to persuade each other, and since we've gotten pretty far afield from anything relating to large format photography, I think I'll bow out of the discussion. Thanks again for your explanations.

[Dan Fromm]

Hmm. The current 1-month LIBOR is 0.29%. The current 91-day T-Bill discount rate is 0.005%. The current Fed Funds rate is 0.25%

PayPal isn't getting rich on the balances its holding.