Paypal Review

By Yaro Starak
63 Comments

You can find a list of other reviews I have completed and links to the products and resources I use to run my online business in the Resources Section of this website.

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Paypal

Review of the Paypal Online Payments Processor

Name: Paypal
URL: www.paypal.com
Purpose: Credit card, bank and check/cheque online payments management system to receive and send money through the web.

Let me start by saying that my personal experience to date with Paypal has been 100% satisfactory. I have never had a complaint and besides a sometimes difficult to navigate website the system has always done what I wanted it to do. I’ve processed over $20,000 worth of transactions and never had trouble accessing my money.

An online payment processor is one of the most important parts of an online business. Without the ability to receive money online you can’t really run an Internet business. Sure you could work only with offline payment methods such as money orders, cheques in the mail or cash, but all of these methods are slow and you will definitely be losing potential customers if you don’t offer some form of instant payment method that handles credit cards.

Paypal’s Bad Reputation

When I first hunted for a payments processor, which at the time was for a web hosting business I was planning, I came across Paypal. That was about seven years ago and I’d say my story is a pretty common one since Paypal was one of the first providers of “email currency”, a system where you could send money via email and there were not many options particularly for Australians back then.

As usual I conducted extensive due diligence before deciding to use Paypal. As I read forums and surfed around the web I quickly came to realize that Paypal had a terrible reputation, so bad that some of its detractors had set up a website called PaypalSucks.com, which still functions today.

As someone who has been hit several times by credit card fraud I’m particularly wary of chargebacks from customers who use Paypal to buy things from me with a credit card. To be honest I have very little confidence in Paypal to protect me from chargebacks, but that is more because of the way online transactions work – protecting the buyer, especially when no signature is present (as in all online transactions) – rather than the seller. The best chance I have, and this is where I would expect services like Paypal to protect me, is to stop fraudulent transactions before they occur.

Once the payment is made and the service or product is provided then it’s too late. Chargebacks hurt the bottom line of your business and chances are you won’t be able to beat a chargeback claim as an online merchant with no signature. However if a payment provider can stop a suspect payment using historical data and other fraud detection methods then I will not send the product or provide the service hence eliminating my exposure to loss from chargebacks.

I’ve written extensively about why I’ve recommended Paymate.com.au, an Aussie Paypal-style service, over Paypal in the past, and most of my justification was based on Paymate’s superior fraud prevention. I’ve since changed my mind during the last two years because Paypal has performed well for me and their fees are a good 30% or so cheaper than Paymate and now offer Australian-centric services. I still offer both services to my customers but prefer when they choose Paypal because it’s cheaper for me.

I’ve read the book Paypal Wars which gives a good explanation for why Paypal has such a bad reputation. In a nutshell there were times in the company’s past where it was the target of all kinds of criminal action and it suffered millions of dollars worth of losses. As part of the retaliation against these criminals many honest customers were affected, losing access to their accounts and later resulting in the class action lawsuit which cost Paypal $9.25 million dollars.

Paypal also suffered because of it’s tremendous growth rate. The managers of Paypal are largely to blame since they were focused on customer acquisition above all else during the growth phase of the business. This resulted in a company that simply could not handle the amount of customers it had to deal with and hence the poor customer service reputation.

Despite all the negative history Paypal managed to grow and maintain it’s de facto standard as the leader in online payments. The grumblings from users seems to have reduced in the last few years and my feeling is that the company turned a corner and now has systems in place to deal with fraud and customer support that are far superior to what they had in the late nineties and early two thousands. Paypal has matured through it’s growing pains, and while no doubt there are still issues, the bad stories just aren’t quite as frequent as they used to be (of course this could be because the publicity has been spun in a more positive light, but lets not be skeptical).

The Bad

The fact is there are some pretty bad horror stories of people booted from Paypal for no good reason, having their funds locked away (sometimes thousands of dollars lost) and many tales of poor customer service. I read many negative stories while researching Paypal and became very paranoid. In the end though, I still signed up to be a Paypal user because it had become the standard method of sending money online, which is tantamount to how strong their business model was despite all the negative stories floating around – you couldn’t afford not to use them. I had to offer this method of payment to my customers because I wanted to keep resistance to buy as low as possible, even if it meant risking being the next victim of a Paypal horror story.

Seven years later and happily I have no horror stories to tell. However since this is a review and I always like to discuss both the good and the bad I will tell you what I do and don’t like about Paypal in terms of my experience with it.

The customer service isn’t great. The website attempts it’s hardest to give you answers so you don’t have to query Paypal customer support via email, or heaven forbid, via the phone. Once I have tried to ask a question of their phone support but I gave up, it was just too time consuming. The email support is okay, but often has trouble answering your specific question and tends to send you preformatted template responses, which, if you are lucky, answer about half your question. Mind you the last time I required support was about two years ago and the service has likely improved. It had greatly improved over the previous two years when I last tried customer service so I think they were on the way up and may even be reasonable today.

The website is simply-complicated. Yes the design is simple, which I like, but often you can’t find the answer you want. If all you want to do is use the core functions then the Paypal website is a breeze. In my case I receive credit card payments regularly and spend money from my Paypal balance on auction items and other online purchases. Paypal is perfect for this. The more complicated your needs the more difficulty you are going to experience.

Sometimes the basic functions you would expect are not available or difficult to find. I’ve had trouble for example forcing a payment to come from my credit card and not my Paypal balance. Sometimes what you think would be an intuitive option just isn’t available and you don’t know if it’s because you couldn’t find it or because it doesn’t exist or has been deliberately made not available.

The Good

The multiple currencies system, which finally started servicing Australia recently, is fantastic and I love the way I can transfer balances in and out of different major currencies easily (you can do currency trading just within Paypal, although the rates aren’t great for short term profiteering).

The cut and paste shopping cart functions are ideal for me since I prefer to use very simple plain text “buy now” links. Once again the more complicated your online shopping cart needs the steeper the learning curve you will face integrating it with Paypal.

Paypal recently launched a merchant account service called Payments Pro that functions as a completely seamless online shopping system for your website. Provided you have the shopping cart software you can use Paypal as the gateway and payment processor and it’s completely private label, which means you can brand it as your own. I have not needed to use this service as yet so I cannot make a comment on how good it is.

Conclusion

All-in-all, for what Paypal does – primarily to allow you to send money through email and take credit card payments online – it does well. It makes what could be a terribly complex function, one full of potential security and privacy issues, and turns it into something as simple as sending email. For that they deserve kudos and I’m extremely happy with the core function and recommend it to everyone.

Yes there are customer service issues. Yes Paypal has a fairly rocky history. Yes you open yourself up to potential losses from chargebacks. The fact remains that Paypal is the largest online payments provider and you really can’t afford to not offer this method to your customers.

I recommend making other payment options available to your customers since it’s never good to rely only on one provider. I also recommend you regularly withdraw funds from your Paypal account and put that money to work for you. There is no interest in a Paypal account and you never know when you could be the next victim of a horror story or fraud attack so keep your money where you know it’s safe – in the bank or in investments.

Yaro Starak
Paypal Merchant

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63 Comments

  • The Alternative: Google’s GBuy… coming soon :D

  • Thanks for the great write-up. I know I had been discouraging my clients from using PayPal. Now that I read your article, I will likely go a little easier on PayPal in my recommendations.

  • I had a PayPal scam email requesting my personal details shortly after I contacted Paypal’s customer support by email. Someone somewhere seemed to know I contacted them recently and sent their scam questionnaire as an opportunistic move

    I have only used them to purchase to date and have found the system great. I would like to get verified status but I cannot do this until I’m at my home address in the UK which is a bit of a sod.

    Fingers crossed, they just keep on getting better. I don’t really want Google jumping in on the band wagon as the whole virtual world of ours will soon be Google and Microsoft with little inbetween. Now that can’t be good for consumer choice.

    Aitch

  • Fraudulent emails is definitely a problem for Paypal. I’ve been fooled by one myself once because like your story Aitch, it came at a time when I expected to get an email from Paypal.

    If you are new to Paypal make sure you are 100% certain an email if from Paypal before clicking any of their links. You should never get a genuine email asking you to update your records or verify your account because of suspected fraudulent activity. Those are both standard paypal email scams (you can look online for more).

  • I’ve never had any problems with paypal but I think thier fees are too high. Hopefully Gbuy will sort them out.

  • Paypal Review by Yaro Starak…

    Yaro Starak of Entrepreneurs Journey has posted an in-depth review of PayPal.
    In his PayPal Review, Yaro gives us the good and the bad of PayPal.
    Firstly, Yaro explains the need for an online payment processor…
    An online payment processor is one …

  • Mohammad

    I decided to write this review to warn others from dealing with paypal, they have charged me before completing the registration process, and after charging me they have asked for me to fax them extra documents that I don’t have, I told them that I don’t have that documents, and I asked them to find an alternative way, they replied stupidly asking the same question, I called them and wasted my money on international calls, every one of their rude employees gave me different answers. at the end I asked them to close my account, they refused, they said that the cannot close the account neither they can activate it if I don’t send them the faxed papers. Simply they are either stupid or they were stealing me. I still couldn’t get my money back, but I had to cancel my credit card because they had a continuous access on it, and that cost me allot also. There should be a law to watch such companies…

    You watch your money, and don’t trust those companies that call themselves as a company for your own security; it is a company that will have a full access to your credit card… I lost much with my registration trial with Paypal (www.paypal.com) be careful from this company.

  • Hi Mohammad – I’ll leave your comment up for the sake of providing both sides of the story. I’ve read many comments such as yours online but as I said in the review I think most of the bad cases come from the earlier days at Paypal. Yes sure there are still bad experiences being had by customers of paypal today but I don’t think it’s any more common than an industry average.

    As I said in my review I’ve used the service now for nearly five years with no stories like yours.

  • […] Here’s a good pick this week from Entrepreneur’s Journey of a review on PayPal—the online payment processor that we all love to hate. Very good review. Think I’ll put a review of PayPal on my to-do list, because the web can always use more opinion on PayPal, heh. […]

  • […] Yaro Starak at Entrepreneur’s Journey provides a Paypal Review from the merchant’s perspective. The same author writes at Small Business Branding about How To Throw Away $500. Australian money, though. […]

  • […] The Carnival of the Capitalists is at The Integrative Stream and features my two articles – Paypal Review and How To Throw Away $500. […]

  • I use both Paypal and Paymate on my site with OsCommerce. I’ve generally found Paymate to integrate a lot better with OsCommerce than PayPal.

    PayPal seems to require more hacking of OsCommerce to set up proper gift and discount voucher functionality, although that’s just my personal observations. But obviously as an Australian seller it is a good idea to offer both as a minimum along with cheque / money order options.

    I’ll have to recompare the fee system Yaro, when I signed a while ago I quickly looked and thought they were roughly comparable.

  • Paypal is a good payment processor. Based on their track record they have provides us with a low cost solution to have credit card payment.

    Many user worldwide has been using Paypal to accept online payment. What Paypal should do is to create a simpler mechanism to withdraw Paypal rather that using Paypal Debit Card/ATM which can only be use if you are US Paypal User.

    I hope in the future, Paypal should make it more easier to accept payment and to withdraw payment. BTW.. Paypal is a leader in Online Payment Processor.

  • sweet pea

    Please note: it’s means it is; its is the possessive (as in: its policies, etc.). You might want to go back and edit your article to make it seem more legitimate.

  • I have used paypal many times to buy and sell on ebay and I have never had a problem. I have recieved fraudulent e-mails from persons claiming to ber paypal but I am always careful what I respond to.

    • I had to copy from returned Paypal reply and pasted here. If read by Paypal eyes, please see that it gets where it needs to go. I have tried many ways to get word back yo them on this positive experience. They need to have some sort of forum that encourages the range of feed back, Thanks

      The customer service rep was superb! His name escapes me but after having to deal with 30 questions to get through the automated system, I was able to get a live voice. He was extremely helpful and though I have closed my unused account, I will likely reestablish a paypal account in the future as a result of the service that you representative availed to me.
      Really, the guy was courteous, personable, he respected my time and that of his employer. He was enthusiastically engaged in doing the very best job he could do. Hopefully you have many working for you such as this guy. His embrace of excellence with regard to work ethic and service to employer and customer prompted this reply. I know you can determine who he is and hope that whoever reads this embraces the same commitment as he and makes effort to see that his team leader has opportunity to read it.
      It is a big deal after all, these are your front line people and I feel certain that you get a lot of feed back on them. I’ve heard that people are 10 times more likely to communicate the negative rather than the positive, it’s the nature of many to only register their chagrin.

      It is my pleasure to have written this and close with a hardy Thank You to him and also those who support his ethic by example, compensation or by what ever means……

      Scott Josenhans

  • Yaro,
    Let me start out by saying that I too, use PayPal and I agree with much of what you say in your article. Like you, I wouldn’t want to use PayPal as my only payment processor. The problem comes (according to some sources) when there is a disputed transaction. PayPal may freeze all of your funds–not just the disputed amount. When the account is frozen, they’ll let money come in to the account but will not allow money to be withdrawn. They’ve been known to keep accounts in this position for 18 months. If PayPal was your only processor, this would almost surely put you out of business!
    It’s my understanding that this is what the class action law suit was about. Even though PayPal lost, there are still reports of this happening.
    So, even though I haven’t had problems myself, I have my PayPal account tied to a bank account that can be closed immediately, without endangering my business.
    “The Idiot in Charge”

  • brad

    No doubt paypal is one of the leading payment processor, my point is you should have always another arrangemnt including paypal to provide better option to your customers. Few processor like 2checkout, worldpay, Chronopay etc that have acquired good reputation and might be considered depending your location and actual need.

  • PayPals customer service can not handle their email support cases anymore…see what they wrote me

    **********
    Dear xxx yyy,

    Due to an increase in email volumes, we may not have been able to answer
    your email.

    If your inquiry has not been resolved or you have further questions
    regarding your PayPal account please call 1-402-938-3570.

    Thank you for choosing PayPal!
    ****************

    It is time for Google to provide us a similar service. I would love to trash my paypal account any moment!

  • […] I’ve written about Paypal plenty of times in previous articles on this blog. I did a review of Paypal, I talked about Paypal vs Paymate, the Australian competitor to Paypal and I reviewed the book, Paypal Wars, which chronicles the rise of the company and the battles it went through against eBay before it was eventually purchased by the online auctions giant. […]

  • Scott Barber

    Does anyone use SWREG (www.swreg.org)? I see they just released new pricing and have a lot of options. Just curious on anyone’s experience.
    Thanks,
    Scott

  • It’s now November 2006 and their customer “service” has NOT improved. You still can’t get answers on their website and their responses to an eMail request for information are still canned snippets that have little to do with your question.

    Paypal still sucks. So let’s hope Google does get something going soon so there’s an alternative.

  • The fact remains that Paypal has not yet implemented wire transfer to most of the countries. For example, it shows absolute ineptitude on the part of Paypal not to provide the facility for transfer of payments to India. There are thousands of software firms in India which could have used Paypal to accept payments from clients. The number of users online is exploding in India and Paypal has already lost billions of dollars in potential business. I am sure this helps Google!

  • Hi Yaro

    I’m Lai Yin from Malaysia. I have a personal Paypal account. Do I have to upgrade to Premier or Business account if I decide to sell something online, say an ebook? If so, which should I upgrade to – Premier or Business?

    Thanks in advance for yr advice.

  • Hey Lai – I think you are better off sending your questions to Paypal as I have no idea how it works for Malaysians. I think each country has different rules and pricing structures so you need to ask Paypal for an accurate response.

    Yaro

  • Thanks Yaro. Appreciate your reply. I have read the details in Paypal site and I’m quite clear now.

  • No worries Lai – glad I could inspire some research ;)

  • I have read the comments and I would like to warn you guys that if you love your business and your money stay away from Paypal. They are thieves. They commit burglary in broad day light and no body can do anything about it. They have frozen my account though I have only 111.0 dollars or so. The resolution center said to resolve the issue, 1. I must change my password. 2. Change my security question. 3. Add a credit card. I could resolve the first two issues. However, when I try to add a credit card it says since my account is limited I cannot add a credit card. Now if I do not add a credit card my account limitation will not be resolved.
    What am I going to do about this situation now? I wrote to paypal and they are so stupid that they wrote back I must go to the resolution center and resolve all the points there. I can guarantee you that they never read your emails at all.
    I know ultimately they will close this account and keep the $111 dollars for themselves.
    And the funny thing is that they have limited my account because they suspect that somebody else accessed my account other than me and they are doing all this to protect me and my account.
    So you see they will keep my $111 dollars to protect me. I am so happy that I do not deal with them anymore. They would have been very happy if they could have frozen my account with more money in there.
    If you want to do business seriously and without risk, stay away from Paypal.

    • I agree I am a seller on ebay …I opened a store about 6 months ago this week they decided to freeze my 150.00 until they verify my address,In which I have been buying items and having them mailed to my same address…People have bought items from me and they are mailed from my address….Its a rip off I have decided to go with paymate…Any insite on paymate

  • Jewelz

    I am VERY unfamiliar with online purchasing. What are the risks as a buyer for using paypal? Is it possible for them to scam more from using your credit card deatils or anything like that?

  • Hi Jewelz,

    There’s always a risk with any payment provider but I don’t think Paypal would be in business very long if it did what you are suggesting.

    I’ve never had a problem with them.

    Yaro

  • Jewelz

    Hi Yaro,

    Okidoky thanks. That’s kinda eased my mind a little. Fingers crossed then aye.

    Cheers,

    Jewelz

  • GC

    Just count your lucky stars that you haven’t had to deal with the PayPal dispute process… I’ll bet pennies to pounds that, if you do get into a dispute, that you will change your mind pretty quick smart.

    My story…

    I buy an item from seller that has a very specific description.

    Item arrives and is not as described, its a cheaper variation.

    Tried to talk to seller but he was so clueless he really had no idea about the differences between the item advertised and the item delivered.

    Raised dispute and then claim with PayPal.

    I deliver PayPal a 12 page document showing exactly why what I received was not what I bid on.

    PayPal then goes onto reject my claim without asking for any further information from me.

    PayPal… a completely unethical company… a sham.. STAY AWAY!!!!!

  • We, too, have been using PayPal as a method of payment for almost 3 years.

    We have lost money through them – but this was because we gave products to users of fraudulently obtained credit cards and PayPal accounts.

    I would say that, although PayPal staff (mostly) are like trained robots who malfunction when crossed with a situation or question they haven’t been trained to answer, that the PayPal service is excellent.

    I would recommend anyone to use it, but to be careful when using it. Don’t dish out your goods unless you are 100% confident that the buyer is who he/she says he/she is.

  • Peter C

    I’ve been using paypal for about 5 years now, it’s very handy for receiving money from freelance work from various countries.

    Recently someone gained access to my account, so I would recommended changing passwords now and then (like your online bank account recommends everytime!)

    Paypal is not as convenient in Japan as it was in Australia, transfer fees etc. are much higher.

  • I understand PayPal is very convenient. However, they don’t service all the countries. This means that affiliate programs which offer PayPal as the only payment option could think twice. I would love to join a lot of programs, including your BlogMastermind, but I have the bad luck to live in a country where we only can send money via our PayPal acounts. So I have to kiss goodbye many opportunities you and others speak so nice about. Or to relocate to another country. Or to be happy that my country is close enough to Russia to never get bombed. Life’s good anyway, and your reviews are really professional.

  • Hi Yaro!

    Thanks a lot for this article – I’ve been reluctant to use PayPal for quite a long time but you’ve helped me make this daring move and go use it for my business.

    Cheerios.

    DanTen

  • Kay

    Hi Yaro,
    How long does it take to receive your funds from a sale through paypal? If I have already been approved for a merchant account through my local bank, and I link that account to paypal to receive funds, will I receive those funds quicker? Might this type of setup eliminate the problem of account freezing a few of those who commented wrote about?

    Thank you.

  • David Smith

    Beware paypal nearly destroy my business, I will never use again!!!

    I have website payments pro account to process payments for my business with then for the last 5 months the put 4 limitations on my account which we are unable to do northing. If you depend on Paypal to receive payments for your business this will put you in bad situation trust me very bad situation. the phone customer services is worst ever we deal with they will not resolve the issues on your account, will ask you to send email which take long to get reply back. Please don’t do it the same mistake we did it, find another reliable company. They don’t want small business to grow alone special because they belongs to eBay which they want every business to sale thought eBay ending up paying fees to eBay and Paypal

    I hope this will open eyes for the people who are interest to use Paypal. I will not recommend this to nobody.

  • abdul

    i am UAE based & sell perfumes & handicraft to my clients on ebay & auction sites. i would like to know if i can use paypal for selling my goods. i dont have a online website. if my clients pay through paypal after receiving the payment in my a/c can i wire transfer it to my bank a/c. my bank is abu dhabi bank in UAE. please assist me. thanks

  • Paypal could become a horror story quite easily. It has happened to me but things have sorted out after a year or so. And since I do not have much choice here in India, I continue to use their services. I will use Google online payment system onces it is offered in India.

  • jane

    hi, had no problemsw with paypal. premier account and verified for 7 years.Suddenlybthey put limitations onmy account, said there was asecurity issue and they needed to check my identity. Said i had to fax them my drivers liscence anda utility bill. I said this was not a secure method and iam not doing it. they said course its secure. we reached an impass.I was told i had no option but to do this, i cannot even closemy account. Im contacting the financial ombudsman and looking foralternative methods. Interesting tthat ebay does not accept google checkout.

  • J.H.

    I’m a 3,000 + Powerseller on eBay and have been using Paypal for approximately 6 years without a single problem. The only advise I would give is to send all items with tracking availability. This way you can document the tracking number on any Paypal inquiry, or complaint, you may receive due to a client not having received his/her item. This way Paypal, and the client, realizes you are not a “crook” and have, in fact, sent the item. Everything else has been fine with me.

    As a buyer I strongly recommend it, since the four times I’ve placed a buyer complaint towards a merchant who was either taking too long to send me my item, or simply had taken my money and went undergound, Paypal went to bat and gave me a full refund in record time.

  • JBB

    I have been using Paypal for 4 years to collect service payments from my remote clients, simplifying the process of billing. However, Paypal recently (as in this week) took a turn for the worse. After years of using the account for my business, they changed the name of my bank account to an incorrect name. When I repeatedly contacted them about this, the only resolution they could or would give me is to downgrade my account from a business account to a “premier” account. I believe this is a move to do two things.

    The first is to force smaller businesses into a different account type that’s not a business account. I bill less then $10,000/year through Paypal.

    The second is to force small businesses to pay a fee if and when they ever want to be restored to what they had before. Paypal is bilking more money out of their customers, or so I suspect.

    So, I am checking out alternatives and this thread has offered a couple. Gbuy doesn’t yet exist that I know of but will check it out. Another payment processor that might be useful is Money Direct but I haven’t yet checked them out for my business, only for online stock trades.

    Anyway, Paypal needs to be replaced and I’m on a mission to do that.

  • Here are some facts about PayPal that you may all know, by now.

    1) PayPal does not provide it’s Business Customers with any Credit Card Merchant ID’s, which in turn means that any Business using PayPal as the Card Processor, will not be able to contact American Express, Visa, and MasterCard, to verify billing and shipping information.

    2) PayPal’s Confirmed addresses, are not always verified addresses, and can be checked out, by using any of the free tools on the Internet, such as Whitepages, proving that no such person ever lived at the given addres.

    3) PayPal Merchants do not have the option to participate in the Verified by Visa, and MasterCard programs, thus hindering merchants from gaining an additional layer of security, which benefits Customer’s the same way as it does Merchants.

    4) PayPal does not provide any information, when a Chargeback is received, unless, a Merchant pursues a Court Order/Subpoena, thus ensuring that most Merchants, will not pursue any legal action, especially if a Chargeback amounts to less than a couple of hundred dollars.

    5) PayPal treats all chargebacks, the same, be it; Non-receipt, Received not as specified, or Unauthorized Charge, although an Unauthorized is something that no Merchant can fully protect themselves, no matter what measures are set in place.

    6) PayPal does not include a Address Verification System tool as a standard free tool. Merchants have to pay an additional Monthly fee + Charge to each transaction,

    Any Merchant, that feels that they were wronged, by any of the above mentioned issues, should contact their local and State Representatives.

  • I was just booted off PayPal today, so found this article when trying to find another option. I am a Top Rated Seller and a Power Seller on eBay. Both eBay and PayPal have made tons of money off the over $30,000 we sold in the last year or so. We’ve never had a single complaint. We have 100% positive feedback and some of the happiest buyers around. We also purchase lots of items on eBay so are using our PayPal account both ways. We even had a PayPal debit card for the last 6 months or so.

    Last week, PayPal limited the account to do some kind of review. It was annoying, but I understand these things need to happen. They finally came back and basically said, “Oops, that was just a computer driven thing and there’s no problem now that we’ve looked at it and all is well”. Our account status was restored. Then, just days later, over the long holiday weekend, they decided to close our account. We cannot retrieve our funds that were in the account for 180 days (6 months!). We had broken no rule or regulation. We had no warning. Their reason was my credit history, which admittedly is bad. However, it was bad when they set me up with an account. It has been bad since an incident about 5 yrs ago. I’ve had no delinquent accounts since and have maintained the same checking account since I was 16! Anyway, they decided that I no longer meet some criteria or other. I guess they didn’t review it when they sent me the PayPal Debit card?

    Anyway, our family relies on our eBay sales, so I hope this hit isn’t too hard for us. I hope we can find another method to collect payments that our buyers are willing to use. Thanks for posting the info you did. As for my experience with PayPal up until this, it was pretty bad in the Customer Service area, but otherwise, I had no complaints. Until now…

  • Unless you have time and money to waste, PAYPAL IS A SCAM!!! I have called in with the same problem for the FOURTH time today!! Once again a horrible experience!! Believe me I am a VERY patient, polite, reasonable person whom have never received such treatment from ANY company I have business with!! All I ask for is a CONSTANT answer! If they is one mistake made, fine no problem were all human BUT when you have the same problem FOUR times!!! THERE IS A PROBLEM!! Each and EVERY time I call in I am told something completely different then the previous agent! I can never get a concrete answer or even someone that SPEAKS PROPER ENGLISH!! I have been rushed, ignored, on hold for over a hour and a half, over talked, and transfer to Ebay WITHOUT my consent or resolving the issue only to YET AGAIN explain my story AGAIN and to AGAIN receive no resolution! Today I CANCELED my PayPal account and will NEVER use AGAIN!!

  • I have used PayPal for years and trusted them with my money, credit card numbers, personal information, etc.. One day I was notified by PayPal that some “suspicious” activity had occurred on my account. Since then my life has been Hell. The activity was not the result of any purchases, selling, or anything at all on my part. In fact, I had not used PayPal for some time and was surprised to hear from them at all. Someone had breached their security and got access to my bank accounts. Only, that is not the worse- the worse part is the way they have handled the situation. They made me feel like the thief, when it is because of them that anything took place! They told me it was their “policy” to freeze my accounts- not refund my money- and make me wait two weeks for an answer from them whether or not they would return the stolen money. When I sign onto my PayPal Account and check on the status of the dispute- it says they are “Waiting on a response from the Seller”! OMG! What Seller- I Never bought anything! This is just real scary and I no longer even feel safe. My personal information has been breached and not only that- it is their “Policy” to not allow me to close my account until they come to a resolution. In other words, the very people who allowed my personal information to go out- also still have control over the said information.
    This is a true outrage.

  • riz

    I just had my very worst nightmare with PAYPAL and it just happened last month days before Christmas…I have been using Paypal for almost 3 years..now since we move to a different state and it is so hard to find a job..I decided to sell some of my stuff that I dont really use so I can buy gifts for my family so I sell my COACH laptop cover/shoes/wallet and 2 of my Louis Vuitton Purses…and guess what????????????They FREEZE my account and hold $845 saying that Iam selling high-end items (i was like…wtf!!!those are my personal stuff … and when was the first day they prohibit to sell high-end items?shouldn’t they freeze those accounts who sell “knock-off” items?) … now the CS name Kat told me that she will put note at it ..they were asking for authentication which I actually fax to them…receipts (which only some of them i have) and letter from LV saying that its authentic… CS said that as soon as I can give them all needed information they will restore my account … and guess what again???? after 2 weeks,I called them talk with CS name Steve.. told me that I CANNOT USE MY ACCOUNT ANYMORE NEITHER MAKE A NEW ONE BECAUSE IAM ALREADY BANNED IN THEIR COMPANY AND IT WAS ALREADY CLOSED…i told him the story .. at first he was really rude .. but when I raise my voice then that was the only time he listened and told me that he will let Kat call me and a manager to fix my issue but until now..its already 01/12/2011 … nobody has called me and they have my $845 … Whenever Iam calling their CS number they will just tell me that I cannot appeal anymore because the account is already closed and I have to wait for 45-180 days for me to be able to get my money through my bank or they will just send me a check..worst is I cannot delete my bank information from Paypal so I called my bank and told them not to approve any transaction from Paypal.
    I just recently found out that Iam not the only one,last month they freeze most of the accounts with at least $300 up.I hope this will not happen to anyone anymore… do not trust PAYPAL as they can just freeze and get money from your bank without any notice.

    p.s.
    I ask Paypal to give me valid reasons why they closed my account …. here’s what they said…PLEASE READ…WHAT A MESS!!!

    If you would like to obtain copies of the information we reviewed in
    deciding to place a limitation on your account or closing it you will need to obtain
    a court order or subpoena. To do so, you may want to consider speaking
    with an attorney who should be able to explain the subpoena process to
    you. If you choose to subpoena the information, you’ll need to submit it
    to us using National Registered Agents, Inc.

    Thanks,

    PayPal Account Review Department

  • I too am a powerseller..top rated seller.. with 100% positive feedback and all of a sudden paypal froze my account. they said i sold a couple gift cards under the value..hello who would buy gift cards at regular value on Ebay! Good things I just made a car payment that very morning! I returned money to a buyer that thank goodness I had not shipped his item or I would had been at a huge loss! PAYPAL is a fraud.they will keep your money! Limit your account without warning! I advise everyone to withdraw your money immediately better yet dont use paypal! My ebay depended on paypal now my monthly revenue is down.

  • THEY STOLE MY MONEY! I have a small business that I take payments from my website through PayPal. Last week I was sent an email out of nowhere that my account now has “Limited Access” and it is unremoveable. This means that they have locked my account for 6 months and I am unable to remove any money from it. According to PayPal I am “Linked” to this mysterious other account or accounts and that is why. They refuse to tell me what account or who owns them or how I even got flagged as “linked” I have spoken to “Level 3 Limited Access” support and their manager and supposedly there is no one else I can speak too. I have $1300 tied up in my account that I needed for this week as I am moving my mom from Florida to New York and I need the money to help pay for the moving truck and gas. I already have my plane ticket bought for the ride back as well. This is a great inconvenience and complete BS as I am the only person I know that uses Paypal. If you want to one day be locked out of your money for 6 months for no reason and told “Sorry, nothing we can do” then I highly recommend this company.. If you like having access to your money then I would go somewhere else.. STAY AWAY FROM THIS COMPANY THEY STOLE MY MONEY!!!!!!!!!!! I keep all of my finances tight and clean and this is an INSULT.

  • I had Paypal for so long but its hard for a teen to get a verified account. Alertpay is way better for teens you don’t need a credit card only a phone call from a robot to get verified if you sign up under my refferal link you get a free $5 to your account https://www.alertpay.com/?fHHQetqYzRmv%2fG3Td22xvA%3d%3d

  • With Paypal I was able to eliminate credit card processing. In practical terms it meant better prices for my clients. For a small business starting out with credit cards can be very expensive, but I liked the pay as you go approach of Paypal.

  • […] Following one of Yaro’s reviews as a guideline, write a thorough review about each product, including an overview of the product, its upsides as well as downsides. Don’t simply copy the reviews provided by the product owner as you won’t gain any trust or sales this way. […]

  • Ebabe

    As a seller, I am very upset that my money is being held for 21 days. I pay for shipping upfront because I don’t want to use ebay shipping services (plus packaging supplies)while the purchaser receives and is able to use the item(s) before I am even able to touch my money. It is not the purchasers fault either because they have already paid. It is PayPal that is the problem by tieing up the money. I have been fortunate enough as to not been scammed by a buyer or seller and Ebay/Paypal siding with cons because they somehow make them more money. But doesn’t mean it could never happen.

  • This is Warren Gurnon from Paypal and I’m in charge of the merchant solutions department. You can e-mail me with any question or issue you might have at wgurnon@paypal.com. Guys, get the facts straight and make this one of you 2012 new year resolutions becuase most of what you guys wrote here are nonsense.

  • Katie

    I’ve been using PayPal service for 2 years with no problems at all until last week.
    They’ve limited my account saying that I have unauthorized credit card linked to my account, which is an absurd. Now I called them telling that I have unpaid items on Ebay and I need PayPal to either remove that limitation or close my old account and let me open a new one. They told me that I must find another way to pay sellers, because I can’t use PayPal anymore!
    I am very disappointed with them and will never recommend anyone to use their service..

  • ga

    To begin with, I have to say that our situation is probably more complicated then most, as spread over 1 year, we more or less live in 3 countries. Originally the paypal account was opened in France to purchase an item for a friend, we spend some time in the U.S, and winters are spent in the Caribbean. We tried to purchase a couple of items from a company in the United States, the value about $700. As many U.S. companies will not accept credit cards issued in Europe, we remembered our old paypal account, and charged the items to it. An initial confirmation of the order was e-mailed to us, as well as the debit note from paypal. The amount was immediately charged to our credit card! The very next day, the order was cancelled. A phone call to the supplier (very Helpful) revealed that the order had been cancelled by paypal. After an endless search, we finally found paypal’s phone number on their website, not the easiest thing to do. The phone service was located in Ireland, but the account having been opened in France, the only available language was French! Not a major problem, as my French is quite fluent, still a choice wouldn’t do any harm! As we tried to confirm that it was indeed us that had placed the order, they put more and more obstacles in our way. First there was a supposedly ” code” charge 0f $3 on our credit card, with that we would “identify” ourselves. several days later, code submitted, our paypal account was still frozen. Another call to Ireland revealed, they now requested the upload of a photo I.D.! Begrudgingly we did that as well, only it never changed a thin, although we had 2 e-mails from paypal, confirming full access to the account had been restored. Next phone call told us a paypal account could not be used internationally!!! and would therefore stay frozen. Furthermore the $3 “code charge” could not be refunded unless we supplied them with our personal bank account number (not very likely). next we cancelled the order with the supplier, and were informed that they would like to refund the money, but were unable due to our blocked paypal account. We are still waiting for our refund, and probably will have to dispute the issue on the credit card end, since there is no way we will phone paypal again!!! In the future if the only payment method is paypal, we will find another supplier.

  • Maria

    Sooner or later, you will know that PAYPAL IS A SCAM COMPANY!
    They may seem cheap, easy and trustworthy on your first look, and you can go on not having problems with them for months, even years, but they are KNOWN for shutting down accounts without notice or reason and FREEZING your money for HALF A YEAR at a time. No LEGITIMATE business does this. They do this to thousands of accounts per months allowing them to play with/invest/and collect INTEREST on HUNDREDS OF THOUSANDS OF DOLLARS of YOUR MONEY. Just Google them, check their reviews AND CHECK THE LAWSUITS. They are CROOKS!!!!!!!!!!!! Best of all, when the sh!t does hit the fan and your get shut down for NO REASON, good luck trying to get in touch with someone competent who will look at your “case” properly. Their staff is a bunch of untrained post-teens with degrees in JACK sh!t. THIS IS OUR MONEY and we are entrusting it in the hands of a bunch of pimpled face imbeciles. BEWARE PEOPLE. USE A REAL MERCHANT!!!!!!!!!

  • kenneth

    I based a purchase I made from a Chinese vendor on the fact that I could, and did, use PayPal to pay for the transaction. Bad mistake. The item was not shipped for 12 days after the order. I did cancel the order but the vendor did not honor the cancelation. The item shipped was not the item I had ordered. I contacted the vendor and received a return merchandise authorization. According to their return policy, they were suppose to pay for the return shipping. After many emails back and forth, I applied for my money back from PayPal. PayPal initiated a request to the vendor in order for me to get my money back. Bottom line, PayPal was not able to get me my money back. I would warn everyone using PayPal to be very careful.

  • Unreliable platform that misleads any serious company or person.

  • Sarah Leo

    Recent experiences get me upset with PayPal. My account was frozen. PayPal will hold it for 180 days. Why does the US government allow it to
    hold again and again to the worldwide customers? It’s illigal, and it’s against the law. No bank or financial institution does that sort of thing.
    If PayPal needs money, it should tell me and pay me interest, and get my permit to do it. The US government should stand out to supervise whether it does against the law or not. Thousands of lawyers should stand out too to sue PayPal for illigal holding money for 6 months without paying any interest to customers. I strongly urge the US government to “take care of PayPal” in order to avoid PayPal make more profit from customers whose account has been frozen for 180 days. I know that amount, huge enough to double its profit. Be careful to use PayPal! I’ll never use it again!!! I hope my money back asap.

  • Alex

    People, if you need your money, stop using paypal, we live in a time where there are hundreds and thousands of other GOOD companies on web that do the same thing as paypal, but are doing their work a lot better and faster, and you can trust them more nowadays than paypal. I got a stupid copy-paste email form them saying they are sorry and they are starting to close my account… with absolutely no reasons, I’m a normal person and have done nothing wrong to them or somebody else.. I don’t use ebay I just received some money from some friends of mine… and here you go, I have my money blocked at paypal for HALF A YEAR (180 days), they don’t reply to emails, calling them make no sense as nobody will help you etc etc…. People, STOP using papal!!!!!! Stay AWAY from paypal if you want your money to be safe!!!

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