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Sat Jan 17 2009 14:27:50

eBay Payment Holds, PayPal Credit Checks and IRS Reporting

By: Ina Steiner

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In Sunday's issue, I take another look at a new law requiring payment card processors and third-party settlement organizations to report eBay sellers' and online merchants' transactions to the IRS beginning in 2011.

I interviewed an attorney who works with financial institutions on what it will mean for payment processors and ultimately for merchants and consumers. While I had an expert on the line, I also asked her about PayPal's credit checks and eBay payment holds. I also checked in with PayPal about these issues.

Fortuitously, eBay blogger Richard Brewer-Hay published an interview with PayPal's Monroe Labouisse about eBay's payment holds on Friday. Monroe answers questions in the comments section of the eBay Ink blog, as well. I'll link to the AuctionBytes article when it goes online.

Update: Here's the article, New Law May Prove Taxing for PayPal and for eBay Sellers.








Comments (21) | Permalink

Readers Comments

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Just Lies

Sat Jan 17 21:43:44 2009

total lies again:

"For example, a relatively new eBay seller who is selling an expensive electronics item may be flagged for an eBay item hold".

So I guess the $1.99 kids tops were high risk that I sold

Bullsh@t

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: More Lies

Sat Jan 17 21:45:44 2009

You said “in a very small percent of cases.” How small?

   We’re talking about single-digit percentages. Usually less than 5% of transactions.

THATS MILLIONS OF TRANSACTIONS ???????

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Patrick Alexander

Sun Jan 18 06:17:27 2009

Every time someone from PayPal speaks, and throughout their UA - we get words like ''may, might, usually, generally, can, typically, occasionally, small percentage'' and the biggie ''At their discretion.''

All ''weasel words'' - purposely vague. So you never really know what's coming in any given case. You can be sure of one thing though. What ever it is - it's designed to benefit P/P - not you.

Hopefully, this will be the start of more regulation for these weasels. They have been operating under the radar for far too long.

And as far as IRS reporting - sellers should be reporting their eBay income anyway. If not - shame on you.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Daisy

Sun Jan 18 10:49:14 2009

I had no doubts it was legal for Paypal to hold payments. But this practice is going to alienate more and more buyers and sellers and run them off.

No one is buyer's Paypal's tripe. They're floating money for revenue, not for good customer service.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: formercanadianpowerseller

Sun Jan 18 11:44:48 2009

The problem I have is eBay not communicating technical issues on their site and how this can lead to buyer dissatisfaction.

I had enough technical issues with my account - from emails not being received by my customer or me as well as Paypal payments showing as PENDING for days when they actually cleared that it made my 5% dissatisfaction get to 5.1%

- ALL THE WHILE MY TOPSELLER MANAGER, POWERSELLER SUPPORT AND TRUST AND SAFETY SAID THAT MY ACCOUNT WOULD NOT BE AFFECTED. I SPENT MY MONEY OUT OF MY POCKET ON FASTER SHIPPING TO MY CUSTOMERS BECAUSE OF EBAYS DELAYS. JUST TO HAVE EBAY PLACE 21 DAY PAYMENT HOLDS ON MY ACCOUNT.
I WAS A SUCCESSFUL INTERNATIONAL DROP SHIPPER FOR 6 YEARS UNTIL 2008 POLICY CHANGES.
WITH 30 DAY CREDIT TERMS THE 21 DAY POLICY HOLD ENDED MY BUSINESS.
21 DAY HOLD PLUS IT TAKES 5 - 7 BUSINESS DAYS TO TRANSFER MONEY FROM PAYPAL TO MY CANADIAN BANK.
28 DAYS.......WHAT ARE YOU THINKING EBAY?

YOU ARE AFFECTING MORE THAN 5% OF SELLERS TOO BY WAY.
I THINK THEY SAY 5% - IF THEY WERE SAYING 8% THEN THEY WOULD HAVE 8% SELLER DISSATISFACTION WITH THEIR POLICY.
THAT WOULD BE MORE THAN EBAY'S STANDARD FOR SELLERS.
SEE WHAT I AM TRYING TO SAY?

I TRULY BELIEVE EBAY POLICY CREATED IS BASED ON HOW IT WOULD AFFECT A USA SELLER AND NOT SELLERS FROM AROUND THE WORLD. NOT TO SAY THAT POLICY DOES NOT AFFECT A USA SELLER - I JUST DON'T THINK EBAY CAN COVER HOW BANKING, SHIPPING ETC WORKS IN EVERY COUNTRY THEY MAKE THEIR SERVICES AVAILABLE TO.




eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Patricia

Sun Jan 18 12:14:13 2009

Its been asked on the Ebay Ink Blog twice...but never answered.  Why does Paypal hold a seller's funds when its an ebay transaction but works entirely differently when its an off-ebay transaction.  The owners of websites with Paypal shopping cart systems are treated far far differently then sellers on ebay!  That question has yet to be answered...but I think it has a lot more to do with the 12 million dollar "float" Paypal/Ebay get off that held money!

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Patricia

Sun Jan 18 12:15:44 2009

Addition to my above post.  That 12 million dollar float is per quarter.  If I were Paypal/Ebay I wouldn't complain if I could scoop in an extra 48 million a year!!!

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: o.c.d.collectibles

Sun Jan 18 15:31:03 2009

If you stop selling on ebay, you won't have to experience this problem. You can still use paypal...only use it somewhere else that you sell... You will probably use google check out too, which will give your online buyer more and better choices!

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: formercanadianpowerseller

Mon Jan 19 09:19:58 2009

My original post ( copied here below ) was posted on http://ebayinkblog.com/ yesterday, only to be removed and NOT answered.

WHY?

Read again and see if you can tell me why my post would have been removed from http://ebayinkblog.com/ ?


ORIGINAL POST:

Since my original post was removed and NOT answered, I will post it again below ( let’s see if I get an answer this time ).

The problem I have is eBay not communicating technical issues on their site and how this can lead to buyer dissatisfaction.

I had enough technical issues with my account - from emails not being received by my customer or me as well as Paypal payments showing as PENDING for days when they actually cleared that it made my 5% dissatisfaction get to 5.1%

- ALL THE WHILE MY TOPSELLER MANAGER, POWERSELLER SUPPORT AND TRUST AND SAFETY SAID THAT MY ACCOUNT WOULD NOT BE AFFECTED. I SPENT MY MONEY OUT OF MY POCKET ON FASTER SHIPPING TO MY CUSTOMERS BECAUSE OF EBAYS DELAYS. JUST TO HAVE EBAY PLACE 21 DAY PAYMENT HOLDS ON MY ACCOUNT.
I WAS A SUCCESSFUL INTERNATIONAL DROP SHIPPER FOR 6 YEARS UNTIL 2008 POLICY CHANGES.
WITH 30 DAY CREDIT TERMS THE 21 DAY POLICY HOLD ENDED MY BUSINESS.
21 DAY HOLD PLUS IT TAKES 5 - 7 BUSINESS DAYS TO TRANSFER MONEY FROM PAYPAL TO MY CANADIAN BANK.
28 DAYS…….WHAT ARE YOU THINKING EBAY?

YOU ARE AFFECTING MORE THAN 5% OF SELLERS TOO BY WAY.
I THINK THEY SAY 5% - IF THEY WERE SAYING 8% THEN THEY WOULD HAVE 8% SELLER DISSATISFACTION WITH THEIR POLICY.
THAT WOULD BE MORE THAN EBAY’S STANDARD FOR SELLERS.
SEE WHAT I AM TRYING TO SAY?

I TRULY BELIEVE EBAY POLICY CREATED IS BASED ON HOW IT WOULD AFFECT A USA SELLER AND NOT SELLERS FROM AROUND THE WORLD. NOT TO SAY THAT POLICY DOES NOT AFFECT A USA SELLER - I JUST DON’T THINK EBAY CAN COVER HOW BANKING, SHIPPING ETC WORKS IN EVERY COUNTRY THEY MAKE THEIR SERVICES AVAILABLE TO.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: formercanadianpowerseller

Mon Jan 19 18:39:10 2009

Me again,

www.ebayinkblog.com just removed my post again ~!

That's four times today.

What is so wrong with my post?
Check what I say and ask below:


ORIGINAL POST:

Since my original post was removed and NOT answered, I will post it again below ( let’s see if I get an answer this time ).

The problem I have is eBay not communicating technical issues on their site and how this can lead to buyer dissatisfaction.

I had enough technical issues with my account - from emails not being received by my customer or me as well as Paypal payments showing as PENDING for days when they actually cleared that it made my 5% dissatisfaction get to 5.1%

- ALL THE WHILE MY TOPSELLER MANAGER, POWERSELLER SUPPORT AND TRUST AND SAFETY SAID THAT MY ACCOUNT WOULD NOT BE AFFECTED. I SPENT MY MONEY OUT OF MY POCKET ON FASTER SHIPPING TO MY CUSTOMERS BECAUSE OF EBAYS DELAYS. JUST TO HAVE EBAY PLACE 21 DAY PAYMENT HOLDS ON MY ACCOUNT.
I WAS A SUCCESSFUL INTERNATIONAL DROP SHIPPER FOR 6 YEARS UNTIL 2008 POLICY CHANGES.
WITH 30 DAY CREDIT TERMS THE 21 DAY POLICY HOLD ENDED MY BUSINESS.
21 DAY HOLD PLUS IT TAKES 5 - 7 BUSINESS DAYS TO TRANSFER MONEY FROM PAYPAL TO MY CANADIAN BANK.
28 DAYS…….WHAT ARE YOU THINKING EBAY?

YOU ARE AFFECTING MORE THAN 5% OF SELLERS TOO BY WAY.
I THINK THEY SAY 5% - IF THEY WERE SAYING 8% THEN THEY WOULD HAVE 8% SELLER DISSATISFACTION WITH THEIR POLICY.
THAT WOULD BE MORE THAN EBAY’S STANDARD FOR SELLERS.
SEE WHAT I AM TRYING TO SAY?

I TRULY BELIEVE EBAY POLICY CREATED IS BASED ON HOW IT WOULD AFFECT A USA SELLER AND NOT SELLERS FROM AROUND THE WORLD. NOT TO SAY THAT POLICY DOES NOT AFFECT A USA SELLER - I JUST DON’T THINK EBAY CAN COVER HOW BANKING, SHIPPING ETC WORKS IN EVERY COUNTRY THEY MAKE THEIR SERVICES AVAILABLE TO.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: kitty

Tue Jan 20 08:07:04 2009

As far as the reporting any sales to the IRS, I have no problem with that.  Reporting all income is the law.  If a seller hasn't been reporting income, then they should start changing to the legal way of doing business.
As for the 21 day hold, I got around that easy enough.  Stop selling on eBay.
Only the eBay sales are subject to a 21 day hold.  All my sales coming from Bonanzle, Plunderhere, and Etsy to PayPal are available to withdraw immediately.  No problem.  eBay keeps shooting itself in the foot with silly rules.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: kitty

Tue Jan 20 08:12:27 2009

@ Patricia,

Yes, it is amazing
The double-standard.
Let's just say PayPal does it to eBay sellers because they CAN.  The other sites would drop them as a payment method and go with google payments, money bookers, or...

Take the hint eBay is dropping, they just aren't into you
Get a better guy, um site....who will treat you the way you deserve

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Single Cent

Wed Jan 21 14:35:24 2009

Easy way to get round the 21 day Paypal holds: refund the buyer a single cent or penny and the remaining funds are immediately credited to your account.
Job done.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Patricia

Fri Jan 23 17:49:30 2009

Why should the IRS be a problem?  Everyone should be reporting their sales and should have been doing it all along.  I don't make all that much on my sales for the year yet I report every penny of it and since I basically take only Paypal I just use their records to record all my sales.  Who wants a problem with "those" people?  I sure don't.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Patricia

Fri Jan 23 17:52:50 2009

@by: formercanadianpowerseller - after awhile they won't let you post at all.  They don't want to hear the truth there - I know because they did it to me twice.  Its just another Ebay site under Ebay's thumb.  Don't waste your time.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: A

Wed Jan 28 00:02:24 2009

Gosh I can't wait to leave ebay... slowly getting to it, but not fast enough. they have little to nothing to offer after 11 years on there.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: John

Thu Mar 5 11:27:26 2009

The payment hold for eBay items is an illegal policy that needs to be challenged in the courts.

To all users, please contact your attorney general and state senators.

PayPal is only licensed as a money transmitter in many states and under that license, funds must be made 'available' to the receiver within a certain number of days. In most states, this is between 3 and 10 days.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: Schmegma

Tue Mar 24 10:55:14 2009

Not to mention their international monetary conversions are not at market and are inflated at least 5% above the current market rate. More revenue via sleezery.

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: juan

Tue Mar 24 11:50:00 2009

i whant by wtih my cheking account

eBay Payment Holds, PayPal Credit Checks and IRS Reporting   eBay Payment Holds, PayPal Credit Checks and IRS Reporting

by: unsatisfied ebay member

Sun Apr 26 16:05:09 2009

I tried the one cent thing and it did not release my funds

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