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Julia Wilkinson AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

Julia Wilkinson is Editor of the AuctionBytes Blog and is author of the "eBay Price Guide," "eBay Top 100 Simplified Tips and Tricks," "My Life at AOL" and numerous ebooks about selling online. You can also find her writing on Yard Salers.
Thu Dec 31 2009 16:51:19

eBay Confirms More 21-Day Holds from PayPal

By: Ina Steiner
Sponsored Link
eBay confirmed that PayPal has rolled out transaction holds more widely in the last month or so, but said the criteria are the same. An eBay spokesperson said there are no plans to institute holds on all eBay sellers.

eBay sellers raised the issue in a discussion board thread started by a bead seller with almost 15,000 feedback and high DSR feedback ratings, who wondered why holds were placed on a low-risk account. AuctionBytes readers have been emailing me about the issue, including a link to this letter published in an Arizona newspaper.

eBay had informed sellers of PayPal's 21-day holds on transactions 2 years ago.  

eBay's spokesperson wrote in an email on Wednesday in response to my inquiry:

"As a reminder, PayPal payment holds help to ensure that sellers have sufficient funds in their accounts if, for example, a customer files a dispute. The funds are held temporarily as a pending balance in the seller's account. The funds may be released early if PayPal determines that the transaction has been fulfilled and the customers are satisfied. Payment holds may be applied for a small number of sellers who have a higher level of risk associated with their accounts. For example:
  • You're new to PayPal or a new seller with limited selling activity
  • You have a high rate of customer disputes
  • You're selling in a higher-risk category or industry such as tickets, travel, gift certificates, computers, consumer electronics or cell phones
  • You have a spike in selling activities or begin selling in a category without an established history"
More information is available on the PayPal website covering the company's transaction holds and reserves. 

If you've been affected, let us know by leaving a comment below.



Comments (72) | Permalink
Readers Comments

eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Patricia
       
Thu Dec 31 19:01:45 2009
They don't seem to be going after the people they list as targets:

   * You're new to PayPal or a new seller with limited selling activity

   * You have a high rate of customer disputes

   * You're selling in a higher-risk category or industry such as tickets, travel, gift certificates, computers, consumer electronics or cell phones

   * You have a spike in selling activities or begin selling in a category without an established history"

So I can only see it for what it is...a desperate move to make more money FAST!  Its no secret that Ebay will hide behind paypal's success for the fourth quarter so they need to make Paypal look REALLY good!
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Unfair paypal hold
       
Thu Dec 31 19:02:59 2009
13 years on ebay. I qualify for top rated seller (TRS).  100% feedback. 4.9 DSR in every category. eBay and Paypal accounts in good standing. No complaints. Few days ago I get email from paypal putting a 21 day hold on my account. It doesn't say why. I log into my paypal account and this comes up.

''Important message about your account. From now on, money you receive will be temporarily held in a pending balance. To learn more, please read our funds availability policy.''

When I click on funds availability policy link it says.

''When do payment holds apply?

Payment holds may be applied to some or all transactions in your account if PayPal perceives a risk associated with your account. Here are some common reasons for holding payments:

   * You have been an eBay and PayPal member for less than 6 months, and, have limited selling activity, or
   * You have an eBay feedback score of less than 100, and do not have a record of good performance or
   * You have a Buyer dissatisfaction percentage of 5% or greater than 5%, or
   * You have an average Detailed Seller Rating (DSR) of less than 4.5, or
   * You have received fewer than 20 Detailed Seller Ratings in the last 12 months, or
   * You have a high rate of customer disputes
   * You're selling in a high risk category or industry such as, but not limited to, tickets, travel, gift certificates, computers, consumer electronics, or cell phones
   * You have a spike in selling activities or begin selling in a category without an established history.''

None of this applies to my account. I don't come anywhere close to any of the reasons paypal gives for holds.

The reasons provided auctionbytes by ebay spokesperson for account holds leaves out a lot. it doesn't list the same reasons paypal list on their site (see above). Why?
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Karen
       
Thu Dec 31 19:36:35 2009
I sell low-dollar trading cards, have done so for 9 years, have no negatives, one neutral in the last 12 months, no disputes, no refunds, and have 4.94 or above on all DSRS.  I got smacked with this a few days before Christmas. Thanks a ton, guys.

As soon as my current store items expire, I'll be hitting the local flea market.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: RicRoe
       
Thu Dec 31 20:01:42 2009
Does anyone know where in eBay's corporate reports they detail how much revenue is on hold?

Last time I looked (and I could have missed it) I did not see any identification in quarterly reports which details the amount of funds being held to sellers.

If revenue on hold is not itemized as an obligation/liability, why is PayPal hiding this revenue?

Is this revenue counted as profits for PayPal until it is paid back to sellers?

If so, aside from the User Agreement which enables PayPal to act in many dubious manners, is this practice legal?

As this is an obligation to be paid out at a future date, there should be detail or accounting of these amounts somewhere in their financials.

Seems that as PayPal increases the amount of money they are withholding from sellers the higher their balance sheet grows based on this revenue.

This might be a sign that PayPal is not as flush with cash as they appear as it seems they constantly seek to increase the amounts of revenue they retain.

It seems that every 6 months or so, the number of sellers being subjected to having funds placed on hold is growing.

If it is so necessary to protect buyers by holding sellers revenues, does that not speak to the lack of verification eBay conducts on sellers?

It appears as though PayPal is inching closer and closer to placing holds on all eBay accounts as a matter of policy under the excuse of protecting buyers from the big bad sellers.

It also appears that PayPal wants to use sellers money for as long as they can possibly hold it in order to generate interest revenue for the company.

It seems that PayPal should at least share the profits generated by the interest on these balances with the effected sellers instead of retaining the proceeds exclusively for the corporate coffers.

As PayPal can only get away with this practice with eBay sellers, we now know the real reason eBay declared checks and money orders as unsafe payment methods.

Unsafe in PayPal speak really means that PayPal not only does not receive fee revenue, but also has no way to enrich the company at a seller's expense unless all payments are forced to be conducted through PayPal.

What happens if PayPal turns out to be a Ponzi Scheme and goes belly up?

Since sellers accounts are not protected under FDIC, what happens to balances on hold in the event PayPal collapses?  Will sellers be forced to get in line and be considered a creditor? Creditors only receive pennies on the dollar after the smoke clears, ask any of Bernie Madoff's victims how well being a creditor works for them.

PayPal acts as a bank in many ways, and as such, needs to be regulated under federal banking laws so that account balances are insured and account holders are protected.

Not to mention that if Pay Pal was declared to be a bank and regulated, the practice of placing holds on accounts would be prohibited.


eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: goldilocks
       
Thu Dec 31 20:39:51 2009
I agree 100% with everything you've said here, Ric Roe, and I too would like to see answers to your questions.  In fact, that was the specific reason I closed up shop immediately after the fateful announcement in January 2008, there was no way that I could absorb the costs of selling and (even more importantly) shipping while Paypal held onto my money.  The fact that there is no consistently detectable "good" reason for which sellers seem to be getting targeted with these holds is, to me, a strong indication the company is struggling to keep up that false positive front by using some "creative" accounting and reporting.  I think that those sellers who have been arbitrarily subjected to these holds should file complaints with their state AG and other official regulatory agencies (cue Ming's list...), of all the repugnant changes enacted by eBay (and their subsidiary, Paypal), this one IMO has the strongest potential to bring them down as long as the people affected don't just meekly submit to the abuse!
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Karma
       
Thu Dec 31 21:15:29 2009
Just when you thought that Paypal/ebay could not get any crazier...... they do!

Happy New Year!
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Marvin
       
Thu Dec 31 22:18:56 2009
Interesting, but hardly unexpected. Just more evidence that the site is buyer "friendly" at the *total* expense of the sellers since neither oBay nor PayPal have any skin in that game.

I would think that this would also mean oBay/PayPal policies are creating many more disputes.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
This user has validated their user name. by: Ming the Merciless
       
Thu Dec 31 22:39:47 2009
Our extracurricular goals for 2010 are twofold:

1. Continue destabilizing the ebafia marketplace by spreading the truth about ebay and its corrupt policies.

2. Concentrate heavily on targeting PayPal and its unfair and arbitrary practices by filing hundreds and preferably thousands of complaints with state and federal agencies.

PayPal is the only thing proping up ebay. 21 day holds and rolling reserves are nothing more than scams designed to generate interest revenue for ebay at OUR expense because they're desperate to generate Q4 revenue by ANY means necessary.

The federal government MUST intervene and regulate PayPal which hides behind the guise of being a money transmitter yet behaves like a bank.

DEATH to ebay/PayPal in 2010.

eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: summer in the city
       
Fri Jan 1 00:32:31 2010


RicRoe, excellent comments.

Federal regulation of Paypal is unlikely: Donahoe's wife raised a million bucks for Obama's campaign.

If Meg is elected in CA, it's even more unlikely. IMO this is the sole reason she's running: to protect Paypal.

I'm wondering whether Donahoe plans to wait until after the election to bolt from Ebay...his incompetence has already reflected back on Meg, and leaving Ebay in rubble before she's elected wouldn't help.



eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: j.g.
       
Fri Jan 1 00:44:32 2010
Up until this year I did alot of purchasing on eBay each year and just kept my Paypal account pretty full.  I would withdraw $500 per month, but let the rest ride. This has been the case for about three years.  When I read about Paypal withholding funds, I decided I no longer trusted eBay or Paypal with my business funds. I got the $500.00 monthly withdrawal limit lifted from my account and I started withdrawing larger sums in a 3 week period until there was about $1,200.00 left.  The other day I withdrew another $400.00 so I am down to $800.00. I fully expected them to balk at this, but I have not yet triggered the 'we're holding your funds' email.

I think Paypal is holding onto cash in any way they can. They are holding the ebay bucks payments until January 9th. They have rejiggered all of my payment functions to default to my Paypal credit card and not my Paypal balance as it has been for three years. They even changed this in purchasing shipping labels, to my surprise. This keeps the cash in Paypal and if I forgot to select to change to the balance, incurs a charge on my credit card so they have accounts receivable and my paypal balance is intact. I have rejiggered it back to where it was, but that shows a definite manipulation to keep cash and I am certainly not the only person it happened to. At this point, I'm wondering when the charities are going to get the funds that have been donated this quarter by sellers.  It wouldn't surprise me that it is in 2010, which it is now, so happy new year!
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: dcsbodyjewelry
       
Fri Jan 1 08:33:30 2010
I was motivated to call PayPal after reading this particular blog to ask some questions about 21 day holds, and see if anything new is happening that may impact my business sales on ebay.

Before I go any further, I think it's appropriate to give a few details on my ebay biz.

Roughly 8700 ebay sales from 03-present

6000+ feedbacks from over 4700 customers.

Lifetime feedback rating of 99.9

589 feedbacks in past 12 months with 100% rating

Power seller & TRS with DSRs above 4.9

My DSRs have always been considerable higher than  site averages since the beginning of DSR program.

NEVER had SNAD claim filed against me, and only had a couple INRs from international buyers after 6 years of selling.

According to the paypal rep I spoke with yesterday, I WILL be subjected to 21 day holds in the near future as will many other power sellers. He said that Donahoe has ordered Paypal to start placing holds on more veteran power seller's funds. He said he didn't know an exact time frame as to when this new round of 21 day holds will occur, but he was rather certain that I would be subjected to 21 day holds soon and sited two reasons why:

1) I'm a power seller with a significant number of monthly transactions which increases the likelihood of one or more dissatisfied buyer transactions.

2) I sell low dollar COSTUME jewelry which is potentially ''fragile'' and ''Breakable'' which increases the risk of buyer complaints if damaged in transit.

What a load of crap! After roughly 8700+ ebay shipments, I've never once had a buyer complain formally or informally that their merchandise got damaged in transit, yet now Donahoe and his team of paypal thugs mastermind a way to hold seller's funds like myself,  classifying me, and I'm sure many others ''risky'' for selling ''potentially breakable'' merchandise.

The paypal rep went on further to say that pretty much all jewelry sellers will be subjected to 21 day holds soon regardless of past sales history because of the high level of fake gemstone jewelry sold on ebay, and the fact that jewelry is fragile (in his words....''potentially breakable''.

If being a power seller with a significant number of monthly transactions is now going to be a criteria for 21 day holds, and/or selling ''potentially breakable'' merchandise is going to be a criteria for payment holds....looks to me like this new 21 day hold fiasco could very well impact 100s of 100,000s more folks currently not subjected to this 21 day hold crap in the very near future.

According to the rep, the two ways which funds can be released sooner than 21 days is if:
buyer leaves feedback
OR
seller can prove delivery

Since only 1/2 the buyer even leave feedback these days, I'll be damned if I'm going to be on the phone with PayPal constantly proving delivery of a bunch of individual orders just so I can get funds released. Ebay/PayPal can can kiss my @zz! They'll permanently lose me as a customer.

It would be one thing if Ebay instituted a site wide policy requiring all sellers to have a small rolling reserve fund established to cover potential refunds, but this crap Donahoe is pulling now with selective holds on small businesses using bullsh@t criteria is flat out insulting and unethical.

Thank god I no longer have any dependency on the income derived from ebay sales. This classification of risky seller will be the final straw that will drive me off Ebay completely as both a  seller and as a buyer.It will also be the final straw with using PayPal for purchases or offering PayPal as a payment option on my website.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Jeff Stannard
       
Fri Jan 1 08:35:16 2010
Its no secret a certain percentage of sellers planned to stick out this holiday season as their last.  All ebay had to do was come up with a little hook to keep them around.  Was widening the paypal-holds net the best tactic ebay MBA's could conger up to accomplish this goal?
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Harriet
       
Fri Jan 1 10:33:48 2010
This is such scary stuff!

Please, please everyone, get started on another venue asap. When strange things happen, there is much, much more going on behind the scenes that we will never know about. It does not paint a good picture for eBay.

I had the very best selling season ever on eCrater.com. I sell vintage and collectible items among other things, and it was just a great season. And the best thing is that it is still doing well. I would say that about 95% of my payments come through Google Checkout, so buyers are not married to PayPal, they will use other methods.

Quit fiddling around and get going on another venue :)
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: My Own Website Not Quite Paying My Bills Yet
       
Fri Jan 1 10:36:41 2010

CNBC will be airing the ancient The Ebay Effect on Monday. I encourage everybody to email CNBC and ask for an updated follow up to showcase all the crap that is happening including stuff like this Paypal 21 day hold from good sellers.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Marco
       
Fri Jan 1 10:42:13 2010
I've had the same situation with my account, I currently have $193.44 USD pending, and it's been higher. I woke up today and there's a message saying "Important message about your account. From now on, money you receive will be temporarily held in a pending balance. To learn more, please read our funds availability policy" I don't understand why.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: George
       
Fri Jan 1 11:11:47 2010
Many of these sellers that have their money held is also money that would have been potentially spend at Ebay.So it's almost like them shooting themselves in the foot.I just don't get all these rule between Ebay and Paypal anymore.I myself have never sold on any site other than Ebay but with the advice of a ''retired'' Ebay seller I'm creating an account at eCrater in the next week or so.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: Henrietta
       
Fri Jan 1 11:21:41 2010
If you have been subjected to any unreasonable hold on funds in PayPal you need to be proactive, don't wait until your 21 day hold grows up and turns into a 60, 90 or 180 day rolling reserve.

Here is a link to two Red Ink Diary articles which give step by step guidance to filing complaints where they will have most effect.

http://tinyurl.com/njoo5f

eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: ebay seller
       
Fri Jan 1 12:12:16 2010
Clearly it is designed to make money off sellers backs by holding there money longer ,with nothing to do with security at all.I Just started using google checkout and they only institute a 10 day hold on payments for new sellers.So what is the extra 11 days for with paypal?,obviously a sleazy way to acrue money with YOUR MONEY!!!
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: haha
       
Fri Jan 1 12:46:26 2010
Good thing there is a thriving black market in hacked stolen paypal accounts.
Paypal is in bed with the fraudsters in my opinion. They must be. A curious co-parasitic symbiosis, where you are the host which is being sucked dry.
eBay Confirms More 21-Day Holds from PayPal   eBay Confirms More 21-Day Holds from PayPal
by: anonymous
       
Fri Jan 1 14:22:37 2010
First of all, if you INSIST on being lazy and not building a business elsewhere, and only relying on eBay SIGN UP TO MONEYBOOKERS.

If you like, there are plenty of other places to list and sell, many of whom are listed on Google, such as eCrater, Bonanzle, and webstore.

Those venues take Google checkout, and if you put another dollar into pay-pal after reading through these letters, you are NUTS. At the absolute minimum, transfer out anything that's there for the moment. Go hit control+N and do it NOW>>>>>

If they institute even ONE hold on my money EVER, I am outta there.

They have ZERO right to withhold money that the customer paid to me, period.

I RUN THIS BUSINESS, period. If they don't like it, it's tough.

IF you qualify, many of you won't, but some will, you can sign up for Intuit payments. 50 cents a transaction. REALLY.

Here's the ad on payments news:

***The Intuit PaymentNetwork

Intuit has soft-launched a new Intuit PaymentNetwork, calling it a "new and affordable way to send and receive payments over the Internet" for individuals and small businesses." A comprehensive set of help and support Q&A is available online.

For small businesses, the Intuit PaymentNetwork provides a low-cost payment alternative to credit cards for receiving payments - charging 50 cents per payment received irregardless of the amount (subject to certain limits). There are no monthly charges, equipment or set-up costs.

For individuals sending funds, you can send to anyone who is a member of the Intuit PaymentNetwork. If they're not already a member, they can join to receive their funds. At the present time, individuals can't receive funds.

More details available on the Intuit Small Business United blog.**

This will only work for you if you get off the rip off eBay site, though.

(to all you English majors: please excuse the writers' use of the "word irregardless)
___________

Moneybookers CLEARLY defines their rolling reserves by feedback amount, if you check their charts. They settle within three days if you have an established reputation.

IF you have less than 100 feedback, this isn't a good option for you.

The real problem is that eBay and pay-pal feel they have a "captive audience"

They KNOW you will stick there, no matter what happens, because you locked into this life-style, and you don't think you will get sales on the alternative venues.

YOU NEED TO START using the other venues, advertise a little, set up and USE a regular e-mail list from customers, and stop bending over for this company!!!!

Make it your New Year's resolution that you will list at least 3-4 items at one of the alternatives, and then DO IT.

Even if you have to cut your price to where you make 1.50 an item. Since there are no fees on many of them, you can do that!

Once you establish yourself there, go forth, and tell other sellers, bring friends! More items listed at eCrater and Bonanzle means more traffic for those sites. Tell the people you brought to bring THEIR FRIENDS. Thereby getting MORE traffic, and more sales....... This is how eBay got started, and it's the same with the new places.

And also, do write your representatives in Congress, this psuedo bank needs regulation, and quickly, before they decide to hold EVERYONE'S money for 21 days across the board.

Frankly there is nothing stopping them now, except that we'd ALL quit using pay-pal.

EOS.
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