I think I need to upgrade. Business or Premier?

[gimmemoresalad]

I am currently running group orders of products from overseas through a Personal Paypal account.

Since I do not make a profit and it is essentially a larger-scale version of "Hey, I'm buying this, do you want me to grab one for you so we can split shipping?" like one might do with a friend, I have never considered this to be "selling merchandise" per se. I am simply a volunteer middleman. I consider those who buy through me to be "buyers", not "customers."

I have always left it up to the buyers whether they used F&F or G&S to send me money for the goods. Due to the nature of the orders that we participate in, production times for the goods can stretch for months, and Paypal's Purchase Protection often expires before delivery anyway, so many of my buyers have felt that Purchase Protection (and the G&S fee that ostensibly pays for it) was a waste. Therefore, a majority of the payments I receive come through as F&F. Again, this is through no expressed preference of my own.

It has recently come to my attention that others who engage in the same activity have been subject to Paypal sanctions and have struggled with having their accounts locked and/or their ability to accept F&F payments revoked. I am not interested in getting caught up in what appears to be a "crackdown" on these group order managers.

It seems that Paypal's problem is that they consider this activity to be "selling goods" and they therefore insist that G&S be used. I can understand that angle. If I were making a profit I would absolutely consider this to be "business" activity. Since I am not making a profit and do not INTEND to make a profit, I think it's more of a grey area, but I am interested in staying on good terms with Paypal, so I am willing to compromise.

Therefore, I think the best solution is to upgrade my account to either a Premier or Business account. But I need help deciding which one will be best based on my activity.

I need my upgraded account to accept payments from buyers in such a way that Paypal's T&C are obeyed. This is to say, if accepting F&F payments for the activity described above is not allowed, then I need my account to be UNABLE to accept F&F payments, because I CANNOT COUNT ON MY BUYERS TO FOLLOW DIRECTIONS and send money in a specified manner. I can tell them they MUST use G&S until the cows come home, and the majority of them will still say, "I trust you and I don't want you to have to pay a fee" and will use F&F anyway. So, if that is going to get me into trouble with Paypal, then I need to control it from this end.

As far as I can tell from the account type descriptions, a Buiness account might be the only one that cuts off F&F payments the way I need them cut off, but I am not sure. Any help or advice would be greatly appreciated! Thanks!

[kernowlass]

@gimmemoresalad

Premier accounts no longer exist.

You can open a business account if you are a registered business.

You cannot accept friends / family payments for goods so to stop that happening send money requests or invoices for payment instead.

Business: Recommended for merchants who operate under a company/group name. It offers additional features such as allowing up to 200 employees limited access to your account and customer service email alias for customer issues to be routed for faster follow-ups.

[gimmemoresalad]

Having to send payment requests/invoices for everything sounds like a hassle, and smells a bit like a workaround. I have a dedicated PayPal account for group order activity, separate from my personal one that I use for my random personal PayPal needs, so there's no need for me to preserve those capabilities in this account.

Assuming that the G&S fee needs to be paid regardless (which I concede that it does), then is there any reason NOT to just go ahead and upgrade to a business account? It would let me take credit card/debit card payments, which is appealing.

Since I'm not making any profits, I wouldn't expect it would increase my income tax liability - and I doubt my PayPal account type impacts the way the IRS views this activity, anyway. That is its own separate can of worms.

From what I've read online, a basic Business account is free and would do what I want it to do. I'm not a "registered business", but I live in Virginia, where one can open a sole proprietorship without filing any particular paperwork, so I was under the impression that I could open a Business account without filing anything. It would be basically the same as a for-profit sole proprietorship except that I have no profit margins built into my prices (I would look like a sole proprietor operating at neither a gain nor a loss).

Are there any major drawbacks I'm overlooking? Any reason I should try to cling to a Personal account and force G&S by sending invoices/payment requests?

[Whac-A-Mole]

@gimmemoresalad

It seems that Paypal's problem is that they consider this activity to be "selling goods" and they therefore insist that G&S be used. I can understand that angle. If I were making a profit I would absolutely consider this to be "business" activity. Since I am not making a profit and do not INTEND to make a profit, I think it's more of a grey area, but I am interested in staying on good terms with Paypal, so I am willing to compromise.

---------------------------

You are running a business,not all businesses make money,some lose money.

So whether you make or lose money is not Paypal 's concern,it wants to be paid for service it provides you,count it as a business expense and bill your buyers according to your business plan.

if you keep doing what you do now,Paypal will disallow you from accepting Friend and Family payments,then you will lose that privilege for good.

[gimmemoresalad]

@Whac-A-Mole I know that. I said as much myself. I'm trying to figure out if a business account is better than just using G&S on a personal account.

[kernowlass · Accepted solution]

@gimmemoresalad

Doesn't make any difference as folks can still use friends / family with a business account.

And if you are not happy to send money requests or invoices to your buyers then you take the risk of them sending using f/f and your account being suspended.......your choice.

. I have a dedicated PayPal account for group order activity, separate from my personal one that I use for my random personal PayPal needs, so there's no need for me to preserve those capabilities in this account.

You are only allowed 2 paypal accounts IF one is personal and the other is business, if you have 2 of the same kind you risk both being limited.

It would let me take credit card/debit card payments, which is appealing.

You can take card payments on a personal account as well.

[gimmemoresalad]

Ohhhhh. The fact that business accounts can accept F&F is an inconvenient game changer. Thanks for the info! I was hoping to just be able to turn off F&F for my account without having it done FOR me as a punishment. I guess I'll switch to a business account just so I can still have the two separate accounts. Both accounts are fully verified under the same SSN so one would think Paypal would've stopped me somewhere in that process if having two personal accounts isn't allowed, but whatever.