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Thu Sept 15 2011 11:23:39

PayPal Snafu Causes Massive Headache for eBay Seller

By: Ina Steiner

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Hello Ina,
I am writing today as PayPal has hit another low. I thought other sellers might want to check their PayPal statements so although this is long, it may be worth reading.

About a week ago, I had sold several items in three transactions to an eBay customer. She has been a regular customer and although most of my items sell for $10.00 on the average, she purchases most of my expensive items.

As some of the more expensive items are set at immediate payment due to the large amount of non-paying buyers lately, she paid shipping 2 times and was awaiting a third invoice. She is an international customer, so I refunded her shipping once and gave her free shipping on the third transaction so that I could ship all of the items together for her at minimal cost.

As soon as I refunded her, I noticed that my PayPal balance went down a bit more than I refunded, so I checked the refund status and then did a search under reversals. There I came across the refund and then I saw what looked like a reversal for an odd amount, not the amount of any of her transactions.

I called PayPal and they told me that no it wasn't a reversal and not to worry. It was about $50.00. I then went and shipped the items. The next day I noticed my account down by this amount of money and had another look at the reversals. It still said this amount was reversed.

I called PayPal again and this time was told that "Oh yes, an error had been made". PayPal had in fact reversed this amount back to the customer within 3 minutes of the transaction." When I questioned why, I was told that it appeared to be a system "glitch" with eBay's express checkout.

After what seemed like hours on the phone with this Paypal rep. I was told that #1 to contact the shipping service I used to have them track and stop the package and #2 to contact the buyer and ask here to pay back the money. I told her NO to both. I told her that the USPS cannot keep track of international packages as it is now and that the package had probably already cleared US customs. I told her that I was not going to contact a good customer and that PayPal should and that I wanted my money back. She said she would send the buyer an email and see what happened.

PayPal sent her an email and sent me a copy of it. It basically asks her if she would like to make repayment and gave her a phone number to call to arrange repayment. A week has gone by and the customer received the items, left feedback but no payment, so I called PayPal again today and the first rep told me that they were going to create a ticket for the problem as they didn't understand what happened and that there had not been any "glitch" as the first rep from last week told me. When I stated that it was not my problem, I told her that I wanted my money back, she had to put me on hold to get her supervisor.

After spending what seemed like an awful long period of time, another person came onto the phone and told me that she would need to look into it and put me on hold. After a long wait, she finally came back and told me that she was going to have to listen to the phone calls that took place between me and the two other reps and if and I quote "I had been misinformed they will refund my money", but if they gave me the correct information then no they will not refund my account.

I proceeded to tell her that this is their error and that if a bank made an error like this, the bank would be responsible. She again stated what she planned on doing and told me she would get back to me. I requested to speak with a supervisor and was told that she was the supervisor. I asked to speak with her supervisor and she stated that her supervisor did not accept any incoming calls for complaints. She was abrasive and rude to say the least.

I then phoned eBay's trust and safety and told them that as sellers can only accept PayPal for payment that I felt that they too were responsible for PayPals handling of this mess. I then repeated all of the history to him, waited while he looked it up, went over it again and again, and the rep there told me to send the buyer a money request. I mentioned to him that PayPal had in fact sent her an email and she didn't pay, but he said to do it anyways and that he was going to send an email to her as well requesting that she pay the money. When I asked him what would happen if she didn't pay, he said that they would get it from her PayPal account.

Out of frustration and anger, I even filed a dispute against PayPal for authorizing a withdrawal from my account without my permission. I wonder what they will do with that.

I am so angry for so many reasons. The first being is that the buyer did pay for her items and PayPal reversed the payment and sent it back to her. This is not my fault and out of my control. I did not want to lose a good customer, but I am sure I have now with eBay getting involved and emailing her.

On principal, I kept on PayPal for this; as one has to wonder how many times they have done this to me or other sellers and it has gone unnoticed. I am fed up with PayPal as they always stress how safe your money is with them, when in fact they cannot own up to their mistakes. I sure don't feel that my money is safe with them anymore and will be withdrawing it as often as possible to avoid any more errors or a larger more serious error.

Although this error wasn't for a lot of money the fact is that I sell on eBay for a living, not a hobby and not a charity. I had already paid fees on that money and yet PayPal wants me to just overlook all of this. What kind of bank would get away with that type of business?

Please withhold my personal information as I do not trust eBay or PayPal.
Thank you.

Comments (20) | Permalink

Readers Comments

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: M.C.
Web Site

Thu Sep 15 11:46:56 2011

PayPal is not a bank. It is not FDIC insured. Keep very little money in the account as you also do not get any  money market interest last time I checked.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

This user has validated their user name. by: Anonymous Annie

Thu Sep 15 16:18:33 2011

Dear OP,

I'm sorry that this happened to you. Your clear and detailed letter was very well written and should serve as a big WARNING SIGN to everyone who accepts PayPal.

Sadly, those who sell on eBay have no choice, and you're right to advise people to watch their statements VERY CAREFULLY.

Your experience (along with the countless other people who have posted their own horror stories about PayPal) is the PRIMARY REASON that I no longer accept PayPal at my website!!

It's bad enough that they charge premium rates for substandard service. But I'd always justified it by telling myself that by offering PayPal I was getting sales that I wouldn't have otherwise gotten.

When they started-in with their over-reaching returns policy requirements...and when that started to encroach and conflict with MY return policy, I knew it was time to drop them.

Oddly enough, my sales did not suffer ONE SINGLE CENT. When I stopped offering PayPal, people used credit cards instead. For those customers who ''needed'' to use funds in their PayPal account, it was easy enough for them to enter their PP debit card information and it was processed like a credit card.

Without any sort of regulation, PayPal has become more and more corrupt with each passing month. You make very valid points about how an ordinary bank would be required (and probably eager) to correct their mistake... yet the same cannot be said about PayPal.

Frankly, I'm glad to be done with them!! My customers still have reasonable protections when paying with a credit card (not that they'd need it from me) but they're certainly entitled to that sense of security. On the other hand, I  also have a sense of security in knowing that the folks who handle my merchant account will act on my behalf and will not readily accept the flimsiest excuses in the same way that PP/eBay does.

PayPal does the things they do, and they behave the way they do BECAUSE THEY CAN GET AWAY WITH IT... WITH IMPUNITY.

We sellers are constantly lectured about what ''good customer service'' is about, yet, they refuse to even come close to providing the same level of service... or even BASIC COMPETENCE.

Heaven help us!

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Harriet This user has validated their user name.

Thu Sep 15 18:56:38 2011

This is what happens when a service has no one to be accountable to.

They basically do whatever is in their own best interest and ignore anything else, even when it is morally wrong.

I suppose one day there will come a time when a regulatory agency will look into their dealings and do something about it and they will have huge retroactive fines and paybacks.

Maybe you can write a letter to your Congressman and mention this situation, as should others who have been scr---d by PayPal. If they get enough letters about PayPal, perhaps they will attempt to rein them in and give them some rules.

Until then, they will keep doing all the terrible things they have been doing because no one is stopping them and they are morally corrupt.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

This user has validated their user name. by: Philip Cohen

Thu Sep 15 21:26:37 2011

Wot, not another horror story to add to the great many other extant PayPal horror stories?

The real question is, when in the US ''banking'' regulator going to finally do something about this unregulated, most unprofessional “financial” operation that serves as no more than the money gouging arm of the Ho’s “eBafia”?

Regardless, the fact is the rusting old hulk “eBay” is presently being kept afloat by the clunky PreyPal so its good to see threats to PreyPal’s clunky operation now coming thick and fast. It’s interesting times for all we eBay “haters” (oops, I mean “watchers”). I just hope that someone has remembered to bring the popcorn.

Even though PayPal clearly offers banking-type services (ie, holding depositors’ money in non-prudentially regulated and non-FDIC insured banking-type accounts), PayPal is mostly registered in various places not as a “bank” nor as a provider of credit but only as a “money transmitter” (like Western Union), and indeed PayPal has even claims that they are not a “payment network”, and there is a minute degree of truth in that claim because it could, somewhat nonsensically, be put that most (but not all) of their activities do no more than facilitate the transmission of money by riding on the back of the banks’ existing payments processing systems.

In fact, the only thing creative about PayPal has been their founding use of users’ email addresses as an identifier for online payment transactions. PayPal is otherwise no more than a blood-sucking parasite riding on the back of, and in the main cannot function except via, the banks’ existing payments processing systems.

PayPal, outside of whatever will ultimately be left of the Donahoe-devastated eBay Marketplace, will undoubtedly eventually be consigned to the history books by the retail banks/Visa/Mastercard once those players get their “online” act together. There is no surer bet than the sun will rise in the morning.

All anyone needs to know about the clunky PayPal, at:

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: williamffox

Fri Sep 16 00:16:39 2011

I have spoken to some very professional and responsible people in Paypal's Omaha HQ's in the past. But when PP recently sent me a "heads-up" that my account had had its status changed to "21-day hold" and when they kept giving me different answers each time, many contradicting earlier and later answers, I thought (being an ex-banker and skeptical and able to sniff out a fraud by nature): "Something does NOT seem right here". I believe Ebay and Paypal are not happy that I REFUSE to use their weak shipping label systems and so they have no idea what I charge (or should I say, PAY) for my shipping and therefore can't charge me FVF fees for those shipping fees where I offer free shipping. I also believe this whole 30-day return period is a precursor to Paypal extending their absurd 21-day hold policy to 30-days. Watch: it will happen. I contacted my state banking regulator about the evasive way my status change was handled and was quite interested in Paypal's unintelligible response -- but maybe even more interested in my regulator's response to THAT. Without getting into specific details, it appears the only recourse is to your US Congress and Senate reps. Which is sort of discouraging. Yet, if Paypal tries one more underhanded (which is a nice way of not saying: SLIMY, DISHONEST, and UNETHICAL, not to mention ILLEGAL)thing with me: I will not hesitate to go down that path with vigor and enthusiasm. It's not OK to do things and get away with things just because you can. And I hope we live in a country where that concept is still valid. Sorry for the rant, but I think these guys are crooks hiding behind "oh, systems glitch", deliberately designed to be opaque systems and a holier than thou attitude toward their clients that is not even close to being upheld the other way.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Sunflower

Fri Sep 16 01:26:24 2011

I am the original poster of this letter. I thought I should let readers know the outcome of what has happened. PayPal conducted their so-called investigation and decided that where as I mailed the package out the day after the payment went through, they would issue me a one time $20.00 ''courtesy'' credit. This was less than half the amount that they reversed back to the customer. My questions are unanswered, I cannot speak to anyone in their legal department as they don't accept phone calls, emails are returned, and I was still charged the FVF from eBay. The supervisor whom apparently does not have anyone to report to, is rude and extremely combative to speak with. If it wasn't so pitiful it would be comical. PayPal states that I should check my account before shipping to be aware of any reversals. As I strive to ship daily, how can I be guaranteed they won't do this over and over again? I can't. I can only hope they won't.

I wouldn't use PayPal for anything if it weren't for eBay and I can assure you that I will be making daily withdrawals of my money so that they do not have any access to it.

In closing, whenever I speak to eBay customer service reps, they always tell me how they are there right behind me. Well where were they when I called them regarding this? Right behind me with their sharp knife. And when asked if there was anything else they could assist me with I told them that no, thanks; they had done enough damage for one day.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Disgusted With Paypal

Fri Sep 16 01:50:56 2011

Don't forget to file a complaint with the BBB too. While some will tell you it doesn't help, believe me it does. I've filed a complaint myself and yes they do respond and are willing to work it out to get a positive showing on it on their record. Don't forget, Ebay is included in this so file against them too for failure to announce the problem.

This is why I stopped selling on Ebay. No seller protection and Paypal isn't any better.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Watching the Wheels

Fri Sep 16 05:16:26 2011

I had a similar occurance, recently. I had also refunded an overage in shipping and there was some sort of a glitch that duplicated the refund.

"MY" suggestions:

For starters, any time there has been a problem, I DO NOT use the toll free sellers phone number, I call the TOLL number that is available for buyers. I do this to create documentation. Phone calls made to 1-800 numbers can only be "proven" if subpoenaed in a court case by "your" lawyer, since a given company is paying for them.

I insist on having my phone call transferred back to America, to eliminate any possibility of misunderstandings due to language differences. I also let them know that I called the buyer number for documentation purposes.

:) And then, I resolve myself to keep at them, for however long it takes, and work my way up the chain of command.

I do not believe that Paypal even has the coding to actually process refunds to their sellers. After my ordeal with essentially the same thing, my refund was done in incremental < $1.00 amounts until the total in question was reached.

Personally, I am not willing to wait through the time frames that would be added by mail, and bottom line, ...

IF I am expected to follow the rules, well, they are going to do so, also, OR, "we" can stay on the phone F-O-R-E-V-E-R!

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: HereIsWhatYouCanDo

Fri Sep 16 06:14:00 2011

Go to and see if your state licenses paypal, if they do file a complaint against paypals license with your states Department of Financial Institutions and let them deal with paypals legal department. Also be aware ebay may also be regulated by your state because they are an agent of paypal. If you state requires paypal to have a license they probably required paypal to put up a substantial monetary deposit too.

This is not a snafu, error or computer glitch it's how ebay and paypal generate revenue. Contact the buyer and ask her if the paypal refund they gave was a paypal credit and see what she tells you.

''how many times they have done this to me or other sellers'' I may be wrong but six figures over the years is probably way to low an estimate.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

This user has validated their user name. by: Anonymous Annie

Fri Sep 16 08:28:47 2011

This whole thing is astounding! eBay/PP's response is reprehensible!!

It's already documented as a system glitch and it's THEIR FAULT!! Yet they try to pass the blame onto the buyer for not double-checking, triple-checking, quadruple-checking for multiple days before shipping.

Then they add insult to injury by offering a token one-time ''courtesy'' partial refund!!??

It's absolutely DISGUSTING!! It's bad enough that they even *try* to get away with this criminal behavior, but it's INFURIATING that they *do* get away with it!!

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Again

Fri Sep 16 10:56:17 2011

I realize you already said that you did not want to contact the buyer to get her to resend the payment but I think you should.  She may have (1) gotten the email and thought it was a fake email attempting to get her to log in to her PP account and be scammed and (2) not even realized that she had ever been refunded a payment to begin with.  Many people don't look at their accounts daily like sellers do and she might not realize the payment ever came back to her.

Yes, it's their fault and they should fix it but they are obviously putting their head in the sand.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Paul

Fri Sep 16 11:00:25 2011

Sorry this happened to you. I have been thru the hoops also with PAYPIG and it is no fun dealing with them or trying to get a refund!

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Red Ink Diary This user has validated their user name.
Web Site

Fri Sep 16 16:19:18 2011

Dear Sunflower
My response is way too long for a comment, you will find it on Red Ink Diary, link above. This post has many many links to places other than PayPal or eBay where you can file a complaint without losing your legal rights.

Thanks to Ina and David for years of exposing eBay's 'glitches'

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: buck efay

Fri Sep 16 19:57:00 2011

Is this just for Ebay sales? This company is disgusting, putting it on the developer board but not informing the public. Reprehensilbe & disgusting that they would do this with OUR money!

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: zvicki

Sat Sep 17 13:21:35 2011

This is a complete Outrage!
What is the differnce between what paypal has done here to having a thief come into your home and steal something of value?

It seems to me that this is clearly theft! I want to thank the poster who provided the state licening link - I've found my state did licence them under some type of "money transaction services act" I intend to find out what exactly that is - and I think OP should do the same.

I think you should report this incident not only to BBB, but to the FBI Internet Fraud dept., and to the police dept. that serves your area as well as the police dept. for paypal - Here is their address: 2211 North First st. San Jose, CA. 95131.

Perhaps they will take a phone call from their local police dept. Seriously?
For all of our sake's I certainly hope so. Thank you for bringing this to our attention. My heart goes out to you.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Sunflower

Sun Sep 18 11:16:02 2011

Thanks to all for your great advice. I did contact the buyer and whether it is a language barrier or she just did not understand, she sent me an email with a screen shot of the entire transaction. She mentioned that she had paid and was not going to pay again. I then sent her another email telling her to look at the credit right above the payment and have not heard back from her.

Regarding PayPal, I cannot get through to anyone with any authority other than the original ''supervisor'' who issued the credit. I am totally disgusted. PayPal is registered with the banking commission in my state, so I intend to file a complaint with them as well as the BBB. The banking commission did tell me that PayPal is not FDIC insured, so that they may get away with this!
It isn't even for a lot of money, but it is the principal that counts here and the wondering of how often this happens, and how much money they make by stealing from their customers.
They should be charged with theft, and probably grand theft. I checked with the police and was told this was a civil matter, which it probably is.

Ebay is just as responsible for this issue as well as that is the only way sellers can sell on eBay. Instead of helping, they continuously tell me to contact PayPal and it is called pass the buck! When I told eBay that I ship immediately to insure good customer service, I was told to keep up the good work. Sure and not worry about PayPal and their so-called glitches.

The good news is that I do have the first email from PayPal stating that it was a computer glitch, so a copy of that to the BBB and banking commission may help.

Thank you to Red Ink Diary for the most helpful information, and thanks to all whom have read and offered suggestions as it is good to have a community of eBay and PayPal survivors.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: psa

Mon Sep 19 00:01:47 2011

People who has gotten bank overdraft fees due to paypal glitches might benefit from this

Rusty Webb Law Firm website - paypal questionaire

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: summerbeemeadow
Web Site

Mon Sep 19 01:08:16 2011

This appears to be an eBay problem related to their 'hold payments until products are delivered' policy that they are phasing in.

I just had a customer purchase and pay for 2 items at eBay (together), but eBay only forwarded visible purchase and payment info for 1 of the 2 items to PayPal and to me.

I only found out about the second item sale because I saw that the buyer left me 2 immediate feedbacks (VERY untypical). The feedback record shows a combined purchase of the 2 items and a combined payment for both with link to a PayPal transaction record with a transaction number - neither of which show in my PayPal account history. Instead, a different transaction and transaction number for only one item shows in my PayPal record for a lesser amount.

PayPal payments have meanwhile continued normally with no problems for sales at our own website through the PayPal Pro interface.

I am 'on the edge' of dropping the eBay venue anyway in favor of continuing to sell solely at our own website instead. Our sales through Ebay have continued to decrease while expenses there have increased greatly over recent months and are now at a net loss while our own website sales have increased considerably at minimal expense there. Should PayPal Pro become a problem, we would simply switch to Google Checkout there.

Our website is constructed with the Drupal opn-source CMS and costs us a total fixed expense of $45 to $50 per month for site hosting plus the PayPal Pro payment gateway, together. Add to that the variable expense assessed per payment by PayPal. That's it, compared to the high expenses and ever increasing aggravation at eBay.

If other eBay sellers have 'had enough' and want to investigate setting up their own website, feel free to contact me at our website and I'll be glad to provide some guidance.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: Linda Rowan

Mon Sep 19 09:22:48 2011

OP, I read your letter and am furious with PayPal.I only had the need to call them a few times a few years ago,each time a rep was in the US and my problems were taken care of. If they are now like eBay and ''out source'' to other Countries,then its the ''LAW'' to ask to be transfered to a US rep. I had to call eBay the other day and got someone I could not understand so I asked to be transfered to the US. The person was RUDE,said I would receive the same answer. I said,you had better transfer me immediately as you are breaking the law! I was then transfered to a US rep and all was taken care of. If enough people demand this,perhaps these businesses will stop out sourcing to other Countries that work for pennies on the dollar and don't give a darn what our problems are. I do this request with my mortgage lender and other financial business as well. Keep it in the US,and add more US jobs. Quit out sourcing to feather your nests at the consumers expense. I also immediately take my money out of PayPal and just keep under 20.00 dollars in the account. Until PayPal is federally regulated, my money goes into my pocket,PERIOD!Sorry this happened to you.

PayPal Snafu Causes Massive Headache for eBay Sell   PayPal Snafu Causes Massive Headache for eBay Sell

by: summerbeemeadow
Web Site

Mon Sep 19 14:24:44 2011

I spoke to a PayPal representative today about my situation detailed above.

This is indeed an Ebay problem and not a PayPal problem.

Ebay is apparently experiencing programming problems and PayPal is only receiving the information that Ebay sends it.

The PayPal rep was able to see the same as what I saw in Ebay records - two items purchased and two items ''paid'' at Ebay, But PayPal was only notified of one purchase & one payment, which matches what I see in my PayPal account records.

One would think that such a large web operation as Ebay might have their 'stuff' together when they make changes, but problems like this are all too frequent with Ebay.

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