WARNING: The following stunt may cause a croaker... forumites advice is required!!

[lighthouse]

I have been burned by PayPal's system and the people who abuse it. I continue to use PayPal. I think, overall, I have made far more money by accepting PayPal than I would have by not accepting it. But I have adjusted my risk tolerance when it comes to their system. And when people ask me for advice I suggest they do the same.

 

'House

LH....What if you have a checking acount that you just keep say $50.00 bucks in....but also have a credit card linked as an alternate source....can they bypass the checking account and take the money back on your charge card??

 

Jonny D.

 

Under the terms of the user agreement they have the right to take the money from any source you have listed on your account. And you explicitly agree in the user agreement that you will never dispute a charge to your credit card for PayPal, and that if you attempt to do so, they have the right to charge your card again. You authorize this by using the service.

 

And whatever you do, don't miss one of their contact windows if they start an investigation into your account. They can freeze any remaining money in your PayPal account (plus any new funds that come in) and deny you access to them. Say you have $500 in your PayPal account, and a $50 buyer says he never got the goods. They email you to investigate. If you don't respond within the three business day window, they seize all $500 from your account for violating the terms of use and they have no obligation to ever give it back. PayPal is not a bank, they are not regulated by the government agencies that normally would protect us... There are a perennial batch of lawsuits pending in several states, but it will likely be years before PayPal has to act like a bank or credit union...

 

Just be careful...

[lighthouse]

If possible, get a debit/charge card for the secondary account. Then use it as your CC. It's a way around the system since Paypal thinks it has 2 sources when it really only has one.

 

Get that lady a kewpie doll!

 

This is exactly the method used by a lot of people I know...

[jonnydouble]

GTFOOH

 

They can freeze $500.00 for a $50.00 investigation....have you ever actually heard of them doing this??

 

J.D.

[lighthouse]

If possible, get a debit/charge card for the secondary account. Then use it as your CC. It's a way around the system since Paypal thinks it has 2 sources when it really only has one.

 

But you probably couldn't use the debit card to purchase with paypal....I use my credit card to purchase books too.....unless you open two paypal accounts....one with a small checking account just for selling.......and another with a credit card for buying....

 

J.D.

 

Since a lot of eBay sellers have a separate account for buying anyway, this isn't a bad approach either... and since most every credit card company lets you pay online anyway, you can just use the checking account to pay your credit card bill... I have three different checking accounts for the shop and one of them has been out of checks for almost a year, but all the transactions I do with that account are electronic anyway...

 

'House

[lighthouse]

GTFOOH

 

They can freeze $500.00 for a $50.00 investigation....have you ever actually heard of them doing this??

 

J.D.

 

Not just heard of... experienced live and in-person...

 

I went out of town for a week on vacation, and hadn't had any active auctions in over a month. Only had one or two people who hadn't left feedback from the last batch, and all of the packages had been delivered (per UPS). PayPal emails me the day I left, by the time I got back they had frozen the $370 I had sitting in my account (earning their 'Money Market' rate). It took them 17 days to release the funds, and at the time I was some 'special' seller or something, was doing around $5K a month with them so I was supposed to get better treatment. 17 days... Turns out the guy who reported the missing package clicked on me by mistake. He was buying up Ultimate Spideys and misrecorded which ones were received and which ones weren't.

 

I stopped leaving money in my PayPal account after that. (Then 8 months later I learned my lesson about checking accounts too.) Out of 3,000+ PayPal transactions I have only had three fraud attempts, and two of them were shot down before they ever got started. The other burned me for $465... But one out of 1,000 is much better than the average for the internet...

 

BTW, the PayPal folks informed me that the reason they freeze the entire account is to protect themselves against additional chargebacks. They see one potential bad sale and if you don't respond to their initial email, they circle the wagons and grab every dollar they can thinking you are trying to screw them. They figure if you don't answer that first email, you might have done 100 bad transactions and they just don't know it yet...

[yertle]

And let me reiterate here... I am not suggesting you anyone should stop using PayPal... or implying that something like this will happen to anyone in particular. My reply wasn't about trying to start a panic.

 

Oh I wont stop using paypal. These stories have just convinced me I shouldn't have my primary checking account associated with paypal. The story of your friend who bounced some checks really got me thinking that I don't want my mortgage checks to bounce because paypal decided they needed a loan.

[OldGuy]

If possible, get a debit/charge card for the secondary account. Then use it as your CC. It's a way around the system since Paypal thinks it has 2 sources when it really only has one.

 

This is the only way to do it and to be totaly safe. I also never leave over $50 in the checking account. That's the most that Paypal can ever screw me out of.