Paypal
Really? Are you sure?
Paypal has recently introduced a new policy into their Paypal User Agreement, under Section 4.2 entitled Risk of Reversal of Payments and the Seller Protection Policy (”SPP”) is being added. Under this new provision, Sellers of tangible items on eBay websites will be eligible for seller protection for claims of Item not received and reversals relating to credit card chargebacks. This policy was introduced on April 30, 2009, and was put in effect on June 3, 2009.
Here’s an excerpt from the policy that puts the policy in simple English:
- 4.2.6 PayPal’s Right to Hold Funds. In order to ensure the integrity of a transaction PayPal reserves the right to hold funds or proceeds from transactions by placing them in a “pending” or hold status beyond the normal distribution period. PayPal may do this in order to mitigate risk related to transactions it considers suspicious.
- 4.2.7 eBay Item Holds. PayPal may, in its sole discretion, determine to place a hold on a payment you receive for an eBay transaction, based on the reasonable belief that there may be a risk associated with the transaction. Such a hold will show as “pending” in your PayPal Account. PayPal will release the eBay transaction hold after 21 days from the date the hold is placed, unless you receive a dispute, claim, chargeback, or reversal on the transaction subject to the hold, in which case PayPal may hold the payment until the matter is resolved pursuant to this Agreement. PayPal may choose to release the hold earlier if the buyer leaves positive feedback on eBay or where PayPal is otherwise satisfied that the transaction has completed successfully.
For the complete policy, log on to your Paypal account, and click on the “Policy Updates” link on the right hand side of the screen.
How did this policy affect me?
To make the long story short – I received 2 payments on June 2 (from eBay sales), and the funds were not being held.
On June 3, I received a few more payments, and those payments were held! It was quite a nuisance as I needed the funds immediately so I can send the item out, but hey, you gotta love Paypal’s policy!
Snapshot of my Paypal Page
So, these funds that are held, it will be released 21 days after the payment was received, unless if there is dispute or a chargeback made against that transaction.
Paypal is grateful though, granting us 2 conditions in which if met, Paypal will release the funds earlier than the default 21 days hold. These conditions are:
1) Buyer leaves a positive feedback for the transaction.
2) Paypal confirms that the item has been shipped. Only applies for shipments that are trackable online at USPS.com or UPS.com, and seller has to provide tracking number on the “Order Details” section of My eBay. The funds are released 3 days after the item is shipped & signed for by the buyer. This only applies for shipments to USA only.
in English Please!
OK, in short, Paypal will hold your funds, and will let it go if any one of these conditions are met:
- 21 Days has passed after you receive the payment
- Buyer leaves positive feedback on eBay for the transaction.
- Paypal confirms that the item is shipped, and releases the payment after 3 days (from delivery date).
I am not quite sure as to whether this applies to all eBay sellers, and all payments.
As a comparison, My eBay account is pretty new (less than 3 months), and the payments I received were in the range of US$50 – US$99.
Please share your experience, were your payments held?
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