Payment holds for non ebay seller

[RickN]

Does anyone know or have experience with payment holds for non-eBay Paypal business accounts?

What is your experience?

It seems that many posts complain about payment holds being made by Paypal until you reach a certain number of eBay feedbacks.  Well I don't sell on eBay currently. 

I have a brick and mortar store with a merchant account and get payments cleared very quickly even for mail orders.   Maybe this is not worth the hassle if I can't get payments cleared very timely.

[PayPal_Adrian]

RickN -

Welcome to the boards!

At this time, payment holds are just for eBay payments - so if you're selling on your own website, you can disregard the payment holds issue. I'm sure you're familiar with what are called merchant reserves; think of payment holds as a sort of very short-term reserve for casual or new sellers on eBay.

If you are selling on eBay, funds are held a maximum of 21 days - but they can always be released sooner if you provide online tracking that confirms delivery.  For a standard Priority shipment, that would mean funds would be available in slightly less than a week if you ship same day.

Thanks!

Adrian

[2chicksandabskt]

Interesting info.  I have a small business that doesn't sell on eBay (not yet anyways).. 

We sell mostly on Etsy and our own website and PayPal has just put a hold on all of our payments coming in...  I can't figure out why and I don't really want to update shipping information in PayPal because I already do this in Etsy. Is there any way to dispute this?

Any info is greatly appreciated.  🙂

[RickN]

I would like to hear feedback from other PayPal users in a similar situation to find out what percentage is held and for how long.

I have another merchant account that has very competitive rates, is regulated by the banking industry and typically clears most transactions in a day.  I am hesitant to add PayPal as an option for payments.  My individual sales can be between $50 to $2500.  Cash flow is key in todays market with moderate margins and a desire to turn inventory.  In the last 3 years we have never had a single customer service issue and stand behind our products 100%.  I understand PayPal wanting to mitigate there risk but to have cash tied up for weeks is just not acceptable. 

[qwerty123]

What Adrian said about it only affecting Ebay-related funds being held is untrue; would be nice if it were because I don't sell on Ebay but the 21 day payment hold was put on my PayPal account anyway. In fact, I haven't even received any funds on my PayPal account and the payment hold was put on my account just today.  You can read countless stories on the web of peoples' non-Ebay funds being held.  I read a story of a lady running an afghan blanket business out her home who didn't use Ebay, funds held. While Adrian paints a utopia picture about the hold supposedly only affecting Ebay payments, the reality of it is, the payment hold will effect ALL funds received regardless of its source; it will be held for 21 days ... maybe longer. My slogan for PayPal is "If it's received, then its reprieved". I know because I went through the nightmare earlier this year trying to get funds released off an Ebay item and now I logged into my account today and AGAIN the nightmare is on my PayPal account out of nowhere.

I've had my PayPal account 10 years and earlier this year in March, I sold an item on Ebay and just when it sold, PayPal put the payment hold on my account. It was a paltry amount of something like $25 so I really didn't care, but I called PayPal customer service anyway and I had asked the rep why was this hold on my account when I had been using PayPal for 10 years and she said it was their new policy.  I use PayPal to receive funds mostly from doing work for other people online and when I sold that item on Ebay it was a one time thing so while I didn't care about the $25 Ebay item, I DID care about the money I receive for my work. I asked the rep about this and she told me ALL funds received will be held for 21 days regardless of its source; and like I said you can read horror stories online that proves that it is NOT only Ebay funds that are affected.  In my case, I logged back into my account after the 21 days to find that the funds had not been released as I suspected. It had been about 30 days if not more. I called customer service and they released the money and removed the hold from my account.  Who knows how long the hold would have remained on the money if I had not called. I can only imagine that process being a pain for someone who uses PayPal consistantly to constantly go through that. 

If you are looking for a reliable source for your small business I DO NOT RECOMMEND PAYPAL because its unreliable and they CAN and WILL put that payment hold on your account at random whenever they see fit.  And also when the payment hold is on there once and is removed, it DOES NOT mean they can't put it on your PayPal account again. They can put the hold back on there at their own convenience and not notify you until the day that it happens which essentially leaves any funds received after you've been notified, locked out for 21 days. Just like today I received an email from PayPal at 1AM that my funds would be held for 21 days starting TODAY.  I don't know what guidelines they use to determine what accounts they are going to put their payment holds on but I logged into my PayPal account today and I saw the payment hold yet AGAIN on my PayPal account when I haven't even been on Ebay since that one time in March.  Maybe its the fact that I don't use the PayPal account much anymore that they put the hold back on there, but I don't use the PayPal account much because I no longer use it for payments since I never know when they're going to put the hold on! Why would I use PayPal if there is any potential for money that I have rightfully earned and that I am depending on to get, to just be held at random for no reason?  In fact, I haven't even used the PayPal account since that time in March except for my own transactions when I use the debit card to transfer money from my bank account and to pay bills.

So there's my personal testimonial feedback on my experience with the payment hold ... take it as you will.  But if you're serious about your small business funds, use your merchant account; avoid PayPal at all costs.  I no longer accept PayPal as a payment method from the people I do work for for this very reason of the 21 day payment holds; I just have them send me snail mail checks and deposit them in my bank account. I still receive my checks on my payment date so there really is no loss to me its just the extra footwork of going to the bank to deposit them; I'd rather do that than wait 21 days for the so-called "convenience" (really a big UNconvenience) from PayPal because I never know when they're going to slap that payment hold on my PayPal account.  

The whole process sounds shadey and suspect to me.  Yes maybe I can see enacting this hold policy on Ebay sellers because Ebay in itself is also shadey with the nickel and diming fees they put on every auction and all the scammers that inundate the Ebay seller base, but why drag the NON-Ebay users and people like me who ARE NOT sellers at all but were/are using PayPal as just a means just to receive payment for work done, into it?  This payment hold has nothing to do with us.  We are paid by brick and mortar businesses and only paid when the companies/entities we have done the work for have already authorized in their own processes that we should be paid; they dont need PayPal's shadey backup polices. They are not going to ask for their money back or they would not have paid us in the first place!

My opinion of PayPal as a small business owner? Sure go ahead and use it if you want potential drama revolving around receiving YOUR OWN money in a timely manner but if you're not into Shakespeare, like me, avoid PayPal like the plague.

[PayPal_Adrian]

2chicksandabskt -

Welcome to the boards!  That's odd that you have holds if you're selling off eBay - you might want to have that checked on by giving a representative a call via the "Contact Us" link.

RIckN - it sounds like you have different process in mind, called Merchant Reserves, which overrides payment holds.  The link I've provided goes to an article PayPal didn't write, so that you have an outside source to compare against

PayPal does use reserves, but we don't use them with new, casual, or most eBay sellers, where they simply wouldn't be appropriate.  They're designed more for high volume businesses or if you have an extended processing agreement (such as Virtual Terminal or other gateway services).  While I wouldn't be able to provide you a base or average percentage, I can tell you that our merchants who encounter reserves via PayPal find them extremely competitive compared to what a traditional merchant account imposes on internet based retailers.

The key to a reserve is, indeed, cash flow.  In a business with steady volume, they take away a percentage for a certain period of time.  Once you've reached the end of your first period, and the same amount funds are being released that are being held, they tend to balance out and the effect on business operations are minimal.  Reserves are just one of many, many reasons why any business should maintain their own reserve of funds in the event of an operations issue that may require financial agility.

I think your business sounds like it has an excellent track record, and that's a key indicator of performance in the future and the potential for risk across the board.  It also sounds like you've been with your merchant processor for quite some time, so you've had an opportunity to build that relationship.  If you were to apply for additional processing options via PayPal, our vetting teams would be able to take that into account.  If PayPal ever considers placing a reserve, you'll have an opportunity to work with a member of our Merchant Risk team and provide them any necessary documentation to help with any potential concerns or underwriting needs that they may have.

You have your own merchant processor, and I think that it's great you're considering your options carefully.  I'm certain you've already done research on why PayPal is a good choice for your business, so I won't throw a sales pitch in here At the end of the day, I want you to be comfortable with whichever choice you make.  If PayPal isn't a fit for your company, I wouldn't expect you to choose us.  You have to do what's right for your business, and I would never begrudge that of anyone.

Sincerely,

Adrian