PayPal horror story and why I no longer use them.
I’m just another person Paypal screwed over. I saw your link “share your story” so here I am. This happened years ago. I started off selling on ebay and eventually created a website and used paypals backend merchant account (the API where i could have my own checkout system) and the money still goes into my paypal account. It became my main business account and I bought things from it, paid vendors, received payments, etc. A full fledged business account.
Out of the blue, with NO warning, I logged into my account one day and saw they held $30,000. Yes, I was dumb and kept over $30k in the account. Again, it was my business account I used to run a business.
I finally got a hold of a “risk manager” and she explained that they are holding this money for 6 months and ALSO taking 20% off every payment that comes in to put in a reserve account. The money is held until no activity occurs for 6 months. In other words, if 5 months goes by with no activity and someone sends me $1 then the clock starts over and 6 more months needs to go by for me to get the $30,000 back.
I explained to her I can’t run my business with them holding 20% and I have a lot of bills to pay with this $30k they are holding. She didn’t care. What happened is they got a few complaints, impatient customers wanting their product and so on. It’s a custom made product by the way, takes time. Everything was shipped within 10 days, sometimes just 2 days. Some people are just impatient and nasty human beings!
Keep in mind, I had a solid record with them for a long time, years. I had a lot of money going thru their system. I was a good customer! So that day I stopped using them totally, almost lost my business. It was actually one of the worst times of my life because I thought this is the start of me losing everything I’ve worked so hard for. How am I going to pay my bills!
Once I snapped out of the anxiety I applied for REAL merchant accounts. 3 of them to be exact. Got approved for all 3 and stopped using paypal. Waited the 6 months and called them the day after 6 months and said GIVE ME MY MONEY! They did.
Funny thing is they felt i was a risk so they held the money just in case chargebacks came rolling in they could cover them. Not sure how $30k was calculated. But after 6 months, NOT 1 CHARGEBACK CAME IN. They held it all for nothing. Paypal is the worst company I’ve ever dealt with. My other merchant accounts have worked out fine and been in business ever since.
My advice is to stay away from paypal. But also don’t ever rely on just one bank, vendor, merchant, etc for everything. That’s why I opened 3 merchant accounts. One of them gives me problems I switch without missing 1 single day of business. I don’t like banks in general because they are similar to paypal in a lot of ways but no way near as bad as paypal.
Nobody cares more about your money than you so protect it!
Posted: May 12, 2015 at 4:41 pm