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Chronic PayPal Problems Leave Sellers in the Lurch

PayPal users have been experiencing technical issues for the last 2 weeks culminating in a major glitch on Thursday when payments seemed to become lost in cyberspace for most of the day. Buyers could provide a transaction number showing they had paid, but nothing showed up in sellers’ accounts. See update below. A reader explained the problem on March 17 on Ecommerce EKG:

“Item in eBay showing payment made via PayPal. Nothing in PayPal account showing this payment. This is 4 hours now. Again, seller caught in middle…eBay says “SHIP!”, shows payment and you don’t want dreaded defect. PayPal – can’t contact – on hold for one hour now.”

A reader responding to the report noted that sellers couldn’t ship orders without receiving the correct shipping address from PayPal – a condition of seller protection. Another said they shipped their orders out yesterday anyway.

The only place PayPal appeared to acknowledge the St. Patrick’s Day problem was on Facebook – here’s an example of a report from a seller and PayPal’s response:

Ginger Garten: Can we please get some kind of idea when this will be fixed? I have many orders stuck in a “queued” status because there is no record of the payment being received on my account, however the customers can provide me a transaction number to prove they have in fact paid. When I go look at the transaction number- there is NO record on my account of that transaction number or any payment received from the customer. This is very frustrating!

PayPal: Hi Ginger – Our apologies for the obvious frustration this is causing. This is a known issue that our engineers are actively working on, however at this time we’re not aware of an ETA on a resolution. You may want to try using the Classic version of the site to see if the transactions show up there. Otherwise we hope to have everything up and running as quickly as we can.

To another user who said the Classic site was not working for them either, as PayPal had advised users to do, the company wrote, “We’re sorry to hear that the Classic site isn’t working for you. As we stated this is a known issue that is sporadically affecting some payments – not all payments may have issues. We’re working as quickly as we can to get this resolved and appreciate your patience!”

A thread from a similar incident from last October on the PayPal forums received some additional reports from users in the last few days, but reports escalatedbeginning Thursday morning and continued well into the evening.

Given the amount of reports that were flooding into PayPal, it’s surprising to read a report from a seller who wrote at 6:38 pm, “Sent an email to PayPal over an hour ago re: the missing payment and received a general response advising me to check out the help topics…they did not even acknowledge there was an issue. I responded back asking for a resolution timeframe but haven’t heard anything yet.”

We reviewed DownDetector and discovered that PayPal users have been having problems since about March 3rd, with many users reporting they were unable to login to the site.

We don’t know exactly how widespread the problem is, but with so many reports of users unable to log in, it isn’t great news for online sellers hoping for orders and payments from PayPal shoppers.

Here’s a typical report, posted to DownDetector on March 5th: “3 days now, can’t log in from laptop or desktop, can occasionally log in from my phone, but can’t do everything to run my business from my phone. I’ve got many, many customers who can’t log in to pay their invoices, which means I can’t pay my bills. Who’s going to reimburse me when my papal pulls the last of the money from my bank account to pay things that auto bill, and I start getting NSF charges because my customers can’t pay their monthly invoice to me?”

UK users had a similar problem last month, as EcommerceBytes had reported.

Reports of Thursday’s problem started sometime around 10 am and abated at about 11 pm. It’s troubling that PayPal did not communicate well with users about such a widespread serious problem. (One woman reported that her grandmother had sent her multiple payments when they didn’t seem to go through – when the problem was resolved, she had to return the excess funds to her grandmother’s account.)

We reached out to PayPal on Thursday evening and have not received a reply by press time. Thanks to readers for reporting the issue to us via email and Ecommerce EKG.

Update: PayPal spokesperson Amanda Miller provided us with the following statement:

We’re aware of an issue related to post-transaction processing that was preventing the accurate display of some balances and transaction records in a small number of customers’ PayPal accounts for a short time. The cause of this issue was related to a code update which has since been reversed. We apologize for any inconvenience this may have caused customers. If customers have any questions or concerns they are encouraged to reach out to PayPal customer support.”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.