Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Nov 8 2012 11:48:33

Empowering Sellers to Research Payment Holds

By: Ina Steiner

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PayPal is notorious for placing holds on seller funds, and it can happen with other online payment services as well. Payment holds puts enormous cash flow pressure on small businesses, but as EcommerceBytes has previously explained, some sellers have recourse if they think the holds are unfair. 

Today, we've published a guide to state money transmitter laws along with contact information and links to more information to help you determine if there's anything you can do if you are unable to access your payments right away.

As Kenneth Corbin explained in this December article, state laws governing money transmitters are in place to protect consumers, rather than businesses. So while businesses struggling to win prompt release of their funds might not find recourse with state authorities, sympathetic regulators might be inclined to assist small sellers.

PayPal has clashed with the New York Times, and some sellers have sued eBay over PayPal holds, but that hasn't stopped the company from extending its "funds availability" program.

You can read an introduction to the EcommerceBytes Guide to State Laws Governing Money Transmitters in today's EcommerceBytes Newsflash. And feel free to share your experiences below.

Click here to see the EcommerceBytes Guide to State Laws Governing Money Transmitters.




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Readers Comments

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

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

Thu Nov 8 12:45:27 2012

I'd like to be among the first to say: THANK YOU!

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: gutspiller This user has validated their user name.

Thu Nov 8 13:22:18 2012

Ina, you owe my respect. Finally somebody with loud voice that dares to stand up against Ebay.

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: bitbybit

Thu Nov 8 13:26:10 2012

Ditto!

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

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

Thu Nov 8 13:37:27 2012

Interesting timing... here's a copy of a message from PayPal that was in my email today. ~ Coincidence?

I had to audibly groan when I read the last sentence of the first paragraph. An ''exciting benefit''?? Really?

-----

Dear Anonymous Annie,

Due to your exceptional PayPal account performance, we are happy to let you know that your funds will no longer be temporarily held during the investigation of a claim, dispute, or chargeback filed by your buyers. This change will take effect immediately. There is no action required on your behalf to take advantage of this exciting benefit.*

Moving forward, there are a few important things to note:

• This benefit is only available to PayPal account holders like you who continue to have great account performance.

• PayPal still needs your assistance by responding in a timely fashion to such investigations, and the claim, dispute, and chargeback process will remain the same.

• Losing a claim, dispute, or chargeback will still cause your PayPal account to be debited at the time the case is closed.

• You may receive system-generated e-mails referencing your funds being held during such investigations. Despite this, your account is exempt from such holds at this time.

The PayPal Debit MasterCard Business Card® will also provide you with fast access to your funds. Thank you and we look forward to growing your business.

Sincerely,

PayPal

* Your account performance will be consistently monitored and the terms of this feature are subject to change based on your selling performance. In order to maintain this feature, above-standard performance is necessary.

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: Sales Smith

Thu Nov 8 13:44:36 2012

The listed information will prove helpful the next time paypal takes ''Hold'' of a payment.

This is exactly what many of us will need to get a quicker resolve.

Ina & David- Thanks for watching our backs.  

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: Sales Smith

Thu Nov 8 13:48:04 2012

Interesting message you received there Annie.

We'll have to see how many of us get one.

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: David Steiner

Thu Nov 8 13:48:30 2012

Thank our intrepid reporter, Kenneth Corbin. He did the heavy lifting in creating this chart.

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: Basset

Thu Nov 8 15:11:31 2012

I got the exact same email as Annie, Mastercard plug & all.  

Thanks Ina, David & Kenneth for the chart.  


Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: trickstunt This user has validated their user name.

Thu Nov 8 18:42:35 2012

Paypal is for idiots and scammers. They're holding people's money because the fraudsters are cleaning their clock and they'd be dead by now if not for sucking the life blood from honest members as they tell their obvious lies.

http://blog.webroot.com/2012/10/12/recently-launched-e-sh
op-sells-access-to-hundreds-of-hacked-paypal-accounts/

There
was another one  for fake accounts that was simply called "The paypal store" Made me wonder if paypal isn't selling fake accounts on the sly

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: Bijoux Dragon
Web Site

Thu Nov 8 23:13:18 2012

Thank you Ina - this is a great resource!

@Annie - I got the same letter today - gee, and i thought I was special ;)

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: mindelec This user has validated their user name.

Thu Nov 8 23:43:46 2012

@annie  i got one too.  struck me as odd cause i've had like 1 claim in 10 years.

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: elpereles
Web Site

Thu Nov 8 23:46:15 2012

I received the letter too.  

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: blaumann This user has validated their user name.

Fri Nov 9 00:23:16 2012

So if my state, Pennsylvania, has none under hold, does that mean PAYPAL can't legally hold my funds?????

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: Steevo This user has validated their user name.

Fri Nov 9 00:59:33 2012

First, the California link is dead.  

Second, my analysis of that regulation and my discussions with the people at that state agency indicate no holds are legal. They have to give the money over right away. There is one exception under the law: by order of the customer.

2101.  Every licensee or its agent shall forward all money received for transmission or give instructions committing equivalent money to the person designated by the customer within 10 days after receiving that money, unless otherwise ordered by his or her customer.

The only time the money can be held for more than ten days is on the instruction of the customer, in this case that is the sender of the money.  

In PayPal's case they are placing those 21 day holds on the order of Ebay, who clearly is not the customer in this law.

It's just illegal.

I put a complaint through congress and asked that Paypal and all other companies similarly situated be brought under full federal regulation, because this behavior violates Federal Reserve Regulation CC.

You should all contact your congressman now that the election is over and ask that they bring PayPal under federal regulation under the Office of the Controller of the Currency.  

OCC only regulates banks. They are loathe to be forced to lift a finger to regulate any other entity. PayPal must be forced to become a bank.

The EU already forced them to become a bank and submit to regulation in Europe or go out of business.


Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: KEEPING A CLOSE EYE ON THEM ALL! This user has validated their user name.

Fri Nov 9 06:17:01 2012

David, Ina, Keith,

You have provided too many extremely valuable bits of information over the years to even count at this point, but this may very well be the one single MOST important thing you've ever done in sellers defense and to help them..

KUDDOS and a huge THANKS for being there for everone!!!!

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: wallflower This user has validated their user name.

Fri Nov 9 08:13:35 2012

blaumann - no, I think that means your state has no limit on hold time

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: Terry in Texas This user has validated their user name.

Fri Nov 9 09:31:18 2012

I received the note 2 days ago and wondered when the other shoe would drop as to WHY i received the note.......only 2 days for the shoe to drop. slower than usual......

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

This user has validated their user name. by: Ric

Fri Nov 9 14:48:02 2012

Received the same PayPal note as Annie.

I figured that it might be due to the fact that I had a PayPal case filed for a non eBay Return due to shipping destruction by USPS where we communicated extensively with the buyer through the case details.

I promised the buyer they would receive credit for return shipping of the item as long as they did not escalate the case any further with PayPal and they cooperated with USPS Insurance Claim Investigation; if they failed to do either, we would retract our offer to refund return shipping.

Buyer was extremely patient as their return to New Jersey was caught in a prolonged backlog of mail deliveries which lasted for a week after hurricane Sandy.

The buyer followed my request not to escalate the case to a claim and provided us with necessary information to file the USPS Claim. We did refund their return shipping cost as promised along with their refund the day the package was finally received.

We thought that PayPal had reviewed the status of the case and rewarded us for both communicating and offering the best customer service we could under the circumstances.

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: tmooreseller This user has validated their user name.
Web Site

Fri Nov 9 14:58:36 2012

It's too bad the PayPal buttons don't function as well. They are not w3c compliant and I was forced to use Etsy to sell my products instead of direct from my own site. I have since switched to an email order form which lists PayPal as an option, but I'm not using PayPal buttons again. I would rather use the invoice system and manage all purchases myself than trust that joke of a payment processor to do anything right. No sales in over a year! So much for "easy" or "fast".

Perminate Link for Empowering Sellers to Research Payment Holds   Empowering Sellers to Research Payment Holds

by: spirit-of-shiloh This user has validated their user name.

Fri Nov 9 20:54:49 2012

WOW..The other day I posted a thread on Seller Central about the PayPal holds and info. Well,a few minutes ago I got slapped and it was taken down. Guess eBay does not want sellers to know their rights :(

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