Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun June 24 2012 22:28:40

PayPal Removes Funds from Seller Account over 2009 Order

By: Ina Steiner

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An online seller wrote to say he received a PayPal "unauthorised buyer transaction" this weekend for an item that he sold in 2009. The letter advised him not to ship the item until PayPal's investigation was complete.

The notice might seem like a hiccup in PayPal's system, but the seller confirmed that the money had been taken out of his PayPal account, despite the fact that the order is two-and-a-half years old.

"It's legit and the money has already been taken out of my account," he wrote. The image he included with his email showed a purported notice from PayPal dated June 24, 2012 with a transaction date of December 25, 2009 (buyer information had been redacted). "Should you be worried if your business accepts PayPal," he asked.



He also reported the incident on the EcommerceEKG system reporting board, where another seller said the incident was probably the result of a chargeback. "It's the worst "feature" of Paypal's money handling operation(s). Before, after or during a sale - you can get one of these. If you are in the US and shipped to the correct address - you are covered. Overseas .... its a toss up! You can potentially make a sale and have it come back to haunt you months later!"

Have you ever received an unauthorized buyer transaction notice years after the transaction? And what would you do if such a situation arose in your PayPal account?




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Readers Comments

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

This user has validated their user name. by: Tula

Sun Jun 24 22:49:20 2012

Wow. That's not good. How the heck can someone try a chargeback after that length of time? Something seems fishy...

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: Patricia This user has validated their user name.

Sun Jun 24 23:13:15 2012

Shouldn't there be some sort of statute for this kind of nonsense?  What's to stop Paypal from doing this to others?

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: chargeback101 This user has validated their user name.

Mon Jun 25 01:21:13 2012

PayPal reps have told me at least twice that 60 days is the basic timeframe to be concerned for chargebacks, "but in some cases, UP TO 6 months, depending on the card holder agreement, if the chargeback was initiated through the cardholder and not through PayPal.."

Having a 3 year old transaction charged back is something I never thought could happen, with the 'seller protection' guidelines. The fact that PP confiscated the funds on a transaction that old is highly suspect.

I have never, ever offer overseas shipping for exactly this type of reason. Same with Mexico, there's no way to get tracking because the addresses are typically off the grid, or the postman is unable to verify delivery, etc. etc.

USA+PR+AK and Canada are the only addresses that PayPal can back you up on if the seller protection guidelines are followed; over $250 requires signature+tracking, and under $250 needs tracking (even if it's a .99 cent item).

eBay loves it when you ship overseas, because the risk is all yours. I would never in a million years offer overseas (or Mexico) shipping. In fact, when my inventory is gone, I will never in a million years sell on eBay again because the eBay market is too soft and flooded and infested with corrupt management decisions that kill the sellers. As long as PreyPal is owned by feeBay, they can't be trusted either.

DUMP THE HO!

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: feline This user has validated their user name.

Mon Jun 25 02:58:54 2012

you mean what is to stop the rest lining up behind and doing the same

I always thought the line was drawn at 12 months seemingly not

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

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

Mon Jun 25 03:03:27 2012

I would sue PayPal pronto!

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: Beth This user has validated their user name.

Mon Jun 25 07:05:32 2012

And this seller should invoke Seller Protection agreement and also call his Congressmen, his Federal Senator and all his state legislative representatives as well as the Dept of Banking in his state.  I'm in the process of doing this over a chargeback from this month.  In My case, they never GAVE me the money, they said it's fraudulent don't ship so I didn't. But now they are trying to take back funds they never gave me.  NOT  A HAPPY CUSTOMER!!!  Bad Buyer expereience for me!!

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

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

Mon Jun 25 07:07:01 2012

If you ship an item to a US address and have proof of delivery or you send an electronic product; and your customer claims non-delivery of that he did not order the product, you will lose if you fight the claim.

If you prove your case PayPal will deny the claim and charge you a hefty ''processing fee''.

Call PayPal before you waste your time proving your case (like I did the first time) and find out how much they will charge. PayPal told me it was usually cheaper to refund the purchase price unless the product has a high value.

PayPal gets paid either way and you, the seller, lose.

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: frustrated This user has validated their user name.

Mon Jun 25 08:17:57 2012

The line is drawn according to the uniform commercial code in your state.

So the person who reported this needs to research it (unless he feels like hiring a lawyer, which he may HAVE to do anyway) and find out.

If there is a statute of limitations to say I am free to walk away from a debt, then there CERTAINLY is one regarding how long afterwards a chargeback can be issued.

Cripes, in OHIO the statute of limitations on THEFT is 2 years. Debt (other then signed contracts, like home loans) is 6 years.

Just look it up, send them a pasted copy and tell 'em you are calling a lawyer.

And they wonder why people clean out their accounts weekly or daily.

DOOOUH

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: Dazzle This user has validated their user name.

Mon Jun 25 09:16:21 2012

Does the seller state wether or not this is an ebay transaction? If so I missed that.

I only ask because I find it happens over and over again with just ebay buyers/sellers specifically. I'd be surprised to find it happened on a sellers independant site. For me personally I find ALL the problems are with Ebay and ebay only. On my website I've NEVER had a chargeback - same story with Bonanza - Etsy - Ecrater ect.
Why is that? Could it be that ebay has coddled, protected, controlled and schooled the scammers?

Regardless - any seller selling on the internet should have a seperate clawback account. What's that? Go to your bank and set up (generally free) an online checking account. Change your routing number in your paypal account once you get the account set up to the new account. You transfer your paypal funds as soon as they hit your paypal account into that online account. (yes daily sometimes 2x's a day) Once that transfer hits your bank you then again transfer the funds into your regular banking account. Why do this? Simple - it eliminates the probability of paypal reaking financial havoc on your well being. There should NEVER be any money just sitting in your paypal account. Does it stop them from witholding future money - No. BUT it keeps you from bouncing checks in your regular account because paypal can not reach back into a 2nd account to steal your hard earned money. They can only reach that clawback account.

I know I've posted this information before but just re-stating it for the newbie who just might not get how paypal really works.

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: ejholden This user has validated their user name.

Mon Jun 25 10:15:30 2012

This incident has occured in Australia. (paypal.com.au)
The value of the transaction is <$50.
The ''victim'' has publicly stated in other forums that rather than contact Paypal to resolve the issue, or use one of several free regulatory authorities available to him to act on his behalf, his preference is to post this issue on as many forums on the www as possible.....

and thus, a molehill becomes a mountain ......

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: andanotherthing This user has validated their user name.

Mon Jun 25 10:25:07 2012

Not sure what the law is in the US, but in the UK, if this happened, I would report it to the Police as a fraud - possibly by the cardholder, or possibly by someone with Paypal itself.  In addition, we have the Financial Ombudsmen to contact in cases like this (something I don't think you have in the States)

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: Mr. Me This user has validated their user name.

Mon Jun 25 10:47:04 2012

Paypal is a sleazy company that passes all risk to the seller.
My main point is that Paypal is a payment handling company, which processes money from many sources (hence those annoying "e-check" payments., however they wish to act like a credit card company and allow chargebacks and returns. Buyers have discovered this and are abusing the system at sellers expense.

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: Carol This user has validated their user name.

Mon Jun 25 11:19:47 2012

Did I miss it, or did the original poster write to Auctionbytes and the EcommerceEKG system reporting board WITHOUT CONTACTING PAYPAL?????

This is exactly the same thing as a buyer trying and convicting a seller without giving the seller an opportunity to know that there is a problem.

This makes a good ''ebay/paypal hater'' tale, but the chances that it is an error and that the seller will have the funds returned are very close to 100% I'm guessing.

It would be nice if ebay, paypal, customers, and we sellers never made an error, but is that a realistic expectation?

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: pace306 This user has validated their user name.

Mon Jun 25 11:22:48 2012

Im the one who wrote ''It's the worst ''feature'' of Paypal's money handling operation(s).''

Generally, the longest time it takes to resolve a chargeback one way or another with Paypal is 6 months.

As Im not familiar with the details of the AU case - I cant say + I dont know the rules of CC payments etc in AU.

The point is .... as usuall, eBay (here Paypal - but they are really one in the same) takes as little responsibility as possible.

Why does a chargeback even exist? And if it has to occur - why doesnt Paypal handle it?

Paypal has ALL the eBay shipping data. We sellers know it, as eBay and Paypal switch back n forth on a monthly basis when it comes to lable printing!

Just look up the g_d da_n info on your own and submit it to the CC company.

But Paypal hopes (like eBay hopes) that they will win and you will loose, so they can recover funds.

If they dont know how to be a cc processor or dont want the responsibility of one - DONT DO IT. But, DONT process CC's, tell people its the easist way to get paid, then stuff it down thier throat later on.

Using Paypal for overseas is like treading a minefield. A chargeback could come at ANY time, even months later - and lord help you if you didnt dot all you I's and cross all you T's. And even then, you will have to fight for whats yours.

This is one of Paypals worst problems - handling fraud from US and overseas buyers!

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: comet This user has validated their user name.

Mon Jun 25 12:14:16 2012

I have only had one bad PP transaction and got caught in the SHIP IT NOW OR ELSE mentality.  Sold and item,  got the PP payment "Good To Ship" notice;  shipped it out within a few minutes (just happened to be going to the PO then) and when I got home I had a DON'T YOU DARE SHIP THIS AND OH WE TOOK YOUR MONEY TOO notice.

PP was less than useless when I explained I HAD tracking etc and had NO REASON to suspect that there was anything wrong with the (small) sale--after all---hadn't Paypal themselves AUTHORIZED me to SHIP IT NOW????

I also contacted the buyer who confirmed that there was "some problem" with their PP acct but that it was "fixed".

Took a while but did get the $$$ credited back

But heres the thing---WHY would PP TELL me that it was OK to ship--and THEN declare that it was NOT?  If there was an "issue" such as no finds in their acct etc then why did they let the sale go thru?  I never found  out why.  

And this is ANOTHER reason I for one am NOT buying into the "Ship within one day" decree.  Too likely to get screwed again.  

Oh--and PP's suggesstion to how to RESOLVE this?  I try and get the item BACK FROM THE POST OFFICE.

Yeah---that went over a treat.

So--PP is the single most confusing entity after perhaps Verizon,  And don't even get me STARTED on THEM!!!!!  

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

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

Mon Jun 25 12:24:06 2012

We made the mistake of using PayPal to process our credit card transactions from our Yahoo store and eBay.

Easy to set up, money all in one account all of our inventory purchases coming from the same account.

All was well for a year or so. Then out of the blue PayPal froze our account. This effectively shut down the eBay store and Yahoo store. All for a $15 charge that we did not owe.

The moral of the story? NEVER use PayPal to process off eBay transactions and never keep more money in your PayPal account than necessary.  

All my best,

Don

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: TeddyElectron This user has validated their user name.

Mon Jun 25 12:56:15 2012

Sounds like someone at PayPal or a bank made a typographical error when entering the transaction ID. This seller may have not even been the intended target of the chargeback.

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: expertbenefits This user has validated their user name.

Mon Jun 25 16:36:46 2012

On tracking: I have no problem tracking express mail anywhere in the world so far including Mexico of course I exclude many countries and allow on case by case basis depending upon the address. Any country can have a crook. The 3 year charge back is highly unusual. What type of card and guarantee was offered? Maybe there was a court order involved and they are just going after what they can get. More  details are needed or maybe I am not understanding this correctly. Even if there is a signature if it is fraudulent it would probably depend upon consumer protection laws. I had a chargeback upheld by mastercard because a customer said " not in my possession" I fought it and so did Paypal. It was an unusual circumstance. The customer claimed they did not sign for it. It was an apt complex. It was under $250 and I was trying to be on the safe side by getting a signature but it did not matter and it was in Dallas TX by an American person. We fought it with the signature but it did not matter. Not in their possession they were not home at delivery.

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

by: expertbenefits This user has validated their user name.

Mon Jun 25 16:39:11 2012

I forgot to mention that Google checkout has problems and I have had problems on Bonanza with google checkout. I won't say what it was I don't want to educate scammers.

Perminate Link for PayPal Removes Funds from Seller Account over 2009 Order   PayPal Removes Funds from Seller Account over 2009 Order

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

Mon Jun 25 19:33:51 2012

Regardless, if the signature is not genuine then that is a problem for the ''merchant'' who directly accepts the card charge. In this case it is the clunky PreyPal who accepts and verifies the card and “approves” any subsequent charges, so it would appear that PreyPal would always be the “accepting merchant”. After all, the selling merchant has no knowledge of the source of the funds that come via PreyPal; so, what is it then that PreyPal provides for the 3% commission that they take on every transaction? It’s not for just the processing of the transaction, surely, the likes of which the credit card companies do, professionally, for ~22 cents. Yes, the credit card companies get ~22c; the merchant’s bank takes a percentage commission for accepting the risk if the item is bought “on credit” …

Die PreyPal, die, and soon, please; and take your ugly adoptive mother with you …

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