Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Sept 1 2013 15:43:41

PayPal President Tackles a PR Problem: Account Holds

By: Ina Steiner

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PayPal's biggest PR nightmare is not when a problem impacts online sellers and merchants - it's when a problem impacts techies, bloggers and reporters who can get visibility for their stories. And nothing garners outrage among audiences more than stories of account holds - especially when it's the account of a person or organization trying to raise funds for a good cause, or has political implications.

PayPal President David Marcus, who took the helm last spring, is now promulgating the message that PayPal is putting customers first and is "violently" changing the culture at eBay's payment unit. In a blog post last week, he explains how he is removing silos and literally tearing down cubicle walls to foster an attitude of putting customers first, including a video in his post that shows the physical transformation to an open working environment.

A "Concerned Worker" who says he/she is from PayPal's Singapore office disagrees with Marcus' assessment in the comments section of the PayPal blog post. "Openness hinges much more on organization structure than the existence of partition walls. It also hinges on where the functional groups are geographical based," the worker wrote, and said, "Round up all the projects and initiatives. How many of the projects remain unfinished, even though they had splashing launches? Who would be accountable for the mess up? Guess what, people got promoted well before there was any results, even if the projects are doomed later."

But one blogger who was granted an interview with the executive called the office redesign a metaphor for how Marcus was improving PayPal, painting a picture of a slow-moving dinosaur under predecessor Scott Thompson in her piece. (The PandoDaily blogger was clearly delighted the executive liked her enough to show her PayPal's "war room").

PandoDaily wrote: "There was no quick fix to what was ailing PayPal. Nothing that can be boiled down to a press release. An acqui-hire wasn't going to do it. A new product wouldn't fix it. Nor would a splashy new ad campaign, free food, iPhones or UP bracelets for the team. He had to deeply change the culture. "It's the hardest thing I've ever done in my career," he says. But once he did it, he saw that it could be done. And if they could change that, Jesus, the assets of PayPal were unlike anything anyone else possessed. Nearly 18 months in, there are signs to Marcus that it's working."

My first reaction upon reading her full post was that it smacked of revisionist history. It was only a few years ago that reporters were praising PayPal for its revolutionary move in opening its platform to third-party developers, including Facebook, whose executive Sheryl Sandberg spoke at the company's Innovate X conference just a few years ago.

Were reporters wrong about the innovation taking place since 2010? Can reporters believe PayPal now when it says it's being innovative?

Marcus wrote on the PayPal blog, "Hundreds of thousands of customers who may have experienced holds last year based on our policies are no longer impacted and we're seeing some recognition of that work - with a notable increase in our Net Promoter Score, an industry measurement of brand loyalty. We've also adjusted policies specifically around holds to demonstrate that we trust our customers as much as they trust us. Simply put, we've built, and are continuing to build a better net. Fewer dolphins, more sharks!"

But those kind of stories are not going away - VentureBeat just wrote about PayPal freezing funds going to a cancer patient for treatment. "Apparently, PayPal only responded after the issue caught the media's attention, and a company spokesperson said it was a mistake. The money has since been paid out," the publication wrote.

Marcus is also borrowing a page out of the Amazon playbook. In his blog post, he said executives at the director-level and above must spend a week at PayPal call centers. "It's a transformational experience that is changing our culture," he wrote.

He also said that when dealing with alleged counterfeit goods, PayPal now gives the benefit of the doubt to the seller while making sure the buyer is not penalized. "For small claims we instituted a "no fault construct" when there is a buyer complaint so that we now simply absorb this cost."  He said the program benefits tens of thousands of buyers and sellers each month, and said PayPal will absorb $2.5 million a year to provide the program.

PandoDaily wrote, "Under PayPal's previous regime several sources have told me that the company actively tried not to hire the best engineering talent, because great developers are a headstrong, disruptive force. They just wanted competent coders who could get the job done."

What do sellers think - Should PayPal hire "great" disruptive developers or competent coders?

Do sellers and merchants have better experiences under PayPal now compared to 2 years ago? In what ways is it better and are there any instances in which it's worse?

Do you use any new products from PayPal - and what would you like to see PayPal focus on that would help you as a buyer or seller?

Is this campaign PR fodder, or does Marcus earn bragging rights to an improved PayPal customer experience? Let us know what you think!




Comments (41) | Leave Comment | Permalink

Readers Comments

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

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

Sun Sep 1 17:47:50 2013

--- ''Should PayPal hire ''great'' disruptive developers or competent coders?''

I think they should try ''competent coders'' first. (Let me know when they hire any.)

--- ''Do sellers and merchants have better experiences under PayPal now compared to 2 years ago?''

Hmmm... I'm afraid I can't answer that one truthfully or with any recent first-hand knowledge. When I said goodbye to PayPal, I said goodbye forever. Forever!

Once a company has lost my trust, they'll never get it back again. Ever. (And I'll bet I'm not alone in feeling that way either.)

It's not that I hold grudges... I can forgive. But when it comes to something as trusting PP with the life's blood of one's business... and allowing PP to ''freeze'' it and ''hold'' it or shut-it-off on a whim (on on a misunderstood policy)... there's no way in H.E.-double-L that I'm willing to take that kind of risk.

--- ''Do you use any new products from PayPal?''

See above response.

--- ''Is this campaign PR fodder, or does Marcus earn bragging rights to an improved PayPal customer experience?''

It's difficult to tell. Even though Mr. Marcus may be able to make some changes in PP's culture and policies... how long will the veneer last? How long before his initiatives are abandoned and forgotten? How long before he's fired (or quits) and some other exec with JD-like philosophies comes in to ''turn things around'' (and restore it to how it was before?)

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

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

Sun Sep 1 18:06:50 2013

“Customer First: The PayPal Way”—PayPal's David Marcus (2013) ...

What a truly frightening (ongoing) scenario ... http://bit.ly/17BbUGH

The simple fact is that “PreyPal” itself is little more that a “merchant account” operator (and “pretend bank” with no FDIC cover for user’s funds) with the infamous Wells Fargo Bank (and a few other front banks like Web Bank, Utah) and is a clumsy middleman with no dynamic access to funds in the real banks other than via the existing professional payments processors, Visa and MasterCard, and both these players are now making available their own professional digital wallets for on- and off-line use …

PayPal’s holds on funds are a direct result of Visa/MasterCard/banks becoming tired of having to habitually field complaints from their card users about PayPal’s unsatisfactory customer support and transaction mediation, and there is nothing “PreyPal” can do to improve the latter because they are simple a clunky middleman, an extra layer of complexity on the existing system, a system without which “PreyPal” simply cannot exist …

And, just for fun, the lastest “PreyPal” horror story in the Guardian
http://www.theguardian.com/money/2013/sep/01/paypal-refund
-missing-money?commentpage=1

When,
notwithstanding the nonsense that Mr Marcus talks, you (still) have to involve the media to get any satisfactory customer service out of “PreyPal”, you know that Marcus is indeed talking spin, and “PreyPal” is fast approaching its “use by date” …

Goodbye clunky “PreyPal”, it has not been nice knowing you …

“... we have a great responsibility to keep funds safe and protected from the bad guys – no one does this at the scale we do, in the number of countries we operate in, dealing with the number of regulators we have.”—David Marcus (2013) ...
Dream on David; and as usual, whenever an eBay/PayPal spokesperson moves their lips, they are, invariably, being disingenuous ... http://bit.ly/UVXx53

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

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

Sun Sep 1 20:26:50 2013

Fantastic quote from the Guardian article that Philip linked to: ''PayPal should be more open – moving money is a vital service that relies on customer confidence.''

And there you have it. I will never trust PP or have confidence it it. It amazes me that so many people still do.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Ed Gadfly

Sun Sep 1 20:33:36 2013

Does this mean eBa'al will stop FORCING people to use PreyPal?

Didn't think so.  :-(

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

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

Sun Sep 1 23:33:36 2013

I don’t know all the details but I understand that in the UK the statutory Financial Ombudsman too has the ability to give “PreyPal” a hurry up; I believe that if they take up a matter and find in the complainant’s favour they fine “PreyPal” £500. Amazing how that potential penalty produces the sound of much scurrying from the “PreyPal” customer service cubicle …

What a shame such an effective federal “financial ombudsman’ does not exist in the US. Oh well, we can’t let a just mediation process get in the way of the US multi-nationals raping and pillaging the world’s consumers (or even US consumers), now can we …

“Customer First: The PayPal Way”—PayPal's David Marcus (2013) ...
A truly frightening scenario, still ... http://bit.ly/17BbUGH

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: The End

Mon Sep 2 00:26:32 2013

To characterize this as a "P.R. problem" totally understates the severity of the violations. PayPal is guilty of so many things, one doesn't know where to begin.
Much like a House of Murder, or Deviant Abuse, better to "Burn the House Down" and start completely from scratch. Starting with > DON'T CALL IT PayPal...Don't do ANYTHING WITH OUR MONEY OTHER THAN DEPOSIT IT INTO OUR BANK ACCOUNT after 24 hours. Guarantee NO HOLDS EVER, like all the rest of the services we choose to use.
Listen DAVE : You're the fairly NEW GUY. Here's the way it is > You've inherited a LEMON.
Worse than the Edsel of eCommerce. So, forget all the erstwhile ideas (use in Home Depot, Outer Space, etc...) and just use it as Ebay's new "In House Charge Card System". Just like the SUCCESSFUL "Other Big "E" venue" has. Keep the Take Rate to 1.75% if you want to compete and WIN. And make sure people can start seeing their money right after THE INITIAL FIRST FIVE DAYS after sign-up. Not based on the number of sales or the value of sales....that's where you get into trouble. Then the deposits hit 24 hrs after item payment is made, forever.
KEEP IN MIND > this new entity ISN'T THE COPS. Visa, MC and all the rest have their own protocols for dealing with fraud, chargebacks,  etc. DON'T GET INVOLVED...that's another pitfall.
WALL STREET CRY BABIES GET THE BOOT.
Spin-off the New Entity then keep Very Loose Ties with Ebay. That's the way to go. NEVER EVER get involved with the stock exchange. You don't need them. They will SUCK this venture dry.
Ebay stock will shoot through the roof if you follow this story line.
So, now you just have to call a meeting with "BooBoo CEO" (Donahoe) and get the ball rolling.
He gets all excited at the mere possibility of Ebay stock going up. Just print out this text to show to him, and you're Off to the Races  :o) Good Luck !

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Ric

Mon Sep 2 00:44:45 2013

Mr Marcus may be relaxing the policies that trigger account holds on some PayPal accounts, however, for eBay sellers, this is simply false hope in the form of more smoke and mirrors.

If you have a PayPal account which does not involve selling on eBay, then, Mr Marcus has likely given you reason to have a little more confidence in PayPal.

On the other hand, if you are an eBay seller, you are still in the same leaking boat, and John Donahoe has been kind enough to provide you with a thimble with which to bail.

eBay owns PayPal, and since eBay orders account restrictions from their predatory position at the top of the eBay Corp food chain, eBay sellers will see no loosening of account restriction policies.  eBay will still order PayPal to freeze seller accounts when ever the mood suits them.

In fact, I would expect to see an increase in eBay seller account holds and limitations now that PayPal no longer will be placing holds on non eBay accounts.

The company relies on holding revenue in order to grow their interest income, so the pressure will be on to maintain the balance, making eBay sellers the likely victims.


Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

by: comet This user has validated their user name.

Mon Sep 2 01:36:03 2013

Wait---Aren't ebay seller ALWAYS the victims????

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Ming the Merciless

Mon Sep 2 02:55:29 2013

Gee, another dirt poor smiling plutocrat who can't afford a tie.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

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

Mon Sep 2 03:34:57 2013

No, sellers aren’t always the victims. PreyPal is an equal opportunity shyster; their clunky operation will effectively defraud either buyer or seller ..

Just remember, in the US, payers should never allow the clunky, unregulated “PreyPal” direct access to their real bank accounts! If you do so, you have absolutely no protection from this clunky operator because you have agreed to their terms of business.

Your only protection, when dealing with this clunky operator, comes from the issuer of your credit card because PreyPal, being little more than a very large credit card merchant account operator (with the infamous Wells Fargo Bank), has had to agree to the credit card companies’ term of business, and oh, how PreyPal must hate that …

PreyPal is analogous to a heroin addict: being basically a credit card merchant itself, it can’t live without the banks’ credit card system, and yet the terms of business that it is forced to agree to with the credit card companies is the thing that gives PreyPal users some protection from the grasping claws of PreyPal’s ugly adoptive mother, the master fraud facilitator, eBay …

“... we have a great responsibility to keep funds safe and protected from the bad guys – no one does this at the scale we do, in the number of countries we operate in, dealing with the number of regulators we have.”—PayPal’s David Marcus (2013) ...
Funny, the credit card companies cope with the same amount of regulators without any of the “disruption” produced by PreyPal’s activities; and, as usual, whenever an eBay/PayPal spokesperson moves their lips, they are being disingenuous ... http://bit.ly/UVXx53

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Ming the Merciless

Mon Sep 2 03:40:46 2013

I'm sure it's completely coincidental that PreyPal adopts as "Customer First" initiative just as significant competition arrives at PreyPal's front door.

However, given the anti customer model PreyPal and its evil stepfather, ebafia, have had historically, this is actually "disruptive innovation."

Were it not for all human misery PreyPal has been causing for years,  Marcus's fantasies would be more laughable than they already are.

I especially enjoyed that PreyPal employee suggesting that new programs never reach full fruition because PreyPal suffers from ADD and can't concentrate on anything long enough to complete a task.

And of course, as Phil and I always, say "if their lips are moving, they're lying." They know no other way.

I see that PreyPal will continue to allow criminal buyers to whine about counterfeits and other alleged fraud.

Yes, counterfeits do exist, but PreyPal should require buyers making claims to present evidence in the form of photos.

Buyers should be required to return the exact item they were shipped and, if they don't, they get no PreyPal refund.

Buyers should be required to submit photos of alleged defects.

Buyers should be required to return   the item in question before seller is required either by ebay or PreyPal to issue a refund.
empty boxes, rocks, a self damaged item, or a facsimile item should receive at least a 30 day ebafia suspension and should be unable to leave feedback or access their PreyPal acocunt.

Marcus would do well to remember that The Ho created far more bad buyers than bad sellers remaining on ebafia.

Frankly, I expect very little will come of this because the ebafia/PreyPal cartel kulture is figuratively stuck in cement.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

by: Massachusets Howler This user has validated their user name.

Mon Sep 2 04:00:48 2013

$49.99 and falling.
(Come on baby- drop like a STONE).
:-) Mass Howler
Those ol PP holds have reached around and bit JD in his arse- word is OUT- they cannot GROW as promised.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Rexford

Mon Sep 2 05:52:46 2013

I don't trust eBay and I don't trust PayPal.

Until both companies stop abusing small sellers I will NEVER purchase another item on eBay and I will never use PayPal.  I want to see action for a change, not lip service.

eBay takes money from small sellers and gives them little or no exposure in search.  This is just not acceptable.

I have enjoyed seeing the look on friends', relatives', (and anyone who will listen) faces when I tell them of how eBay treats small sellers.  They are simply amazed at how they have thrown us under the bus.  Whether Donahoe wants to believe it or not, these stories spread like wild fire.

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by: FREDDY This user has validated their user name.

Mon Sep 2 07:18:36 2013

@ Ming
Buyers that return a self damaged or box or rocks etc. should get at least a file with the police dept. Over a certain amount - a court action is mandatory. That would be the only way to stop this nonsense.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Map

Mon Sep 2 08:35:56 2013

@ Ming,

The first thought I had was he looks like Ricardo Montalban.

A picture of him dressed as Khan would be appropriate since he is the Captain of the Warbird PREYPAL.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: Map

Mon Sep 2 09:08:07 2013

@ Mass Howler your right.

JD has been selling his stock this year. Looking at ebay stock chart. The 2012 and 2013 looks similar to my Omniture reports in that we had massive growth in 2012 and then a sudden plateau at the end of 2012 and lasting thru 2013.

Our Plateau is a flatline at the bottom. Jd's stock is a flatline at the top.

Sellers are basically all bankrupted and Terra Peaks is showing dead sales in nearly all ebay categories.

What a high cliff for ebay to fall from.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: The End

Mon Sep 2 09:27:10 2013

"PayPal's biggest PR nightmare is not when a problem impacts online sellers and merchants". Believing this leads to the death of PreyPal.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

by: pace306 This user has validated their user name.

Mon Sep 2 10:05:42 2013

Almost every encounter I've had with Paypal has been a negative experiance.

Ive been a seller since 1998, have a NY State Tax ID, and a local NYC business license - I'm NOT fly by night.

Yet I get treated like crap. Every call is a fight to get back whats rightfully mine.

Paypal allowed the last women I dealt with to file an INR case via eBay (ebays long arm reaches into your Paypal account and steals your funds) even though in the complaint she ADMITS she moved to another country! WTF?!

The worst is the catch all "chargeback". They seem to crop up all the time now, and when I call about them, I get he appologies, the Im sor sorries and the "yes you are right, we will put the money back into your account". Then they have the nerve to send ma a survey asking me how well they are doing!

The worst of course is that they dont know how Global Shipping works. Sellers cant be - sholdnt be debited for INR or damaged goods based on the GS program. Yet..... it happens and then I have to remind them of how the program works. You would think as they are an eBay company - they should know, right?

I have loads of stories, each one costing me time, effort and money to get back the moneies taken from me - and I've won each and every case. There's NO way eBay and or Paypal are going to steal from me. Having a brother in law whos a licensed attorney in NY/NJ makes sure of that.

I want/try to be fair - ALWAYS. I recognize and appriciate ALL my buyers. Xmas time, I even include holiday cards, I randomly throw in extras or freebies, and even personalize each invoice and write thank you.

What I wont tolerate is people stealing from me via eBay OR Paypal.

I too had money holds, and it took some good threats but finally I got them removed (about 2 yrs back).

Paypal has a bad rep because its %50 an eBay company and eBay is tainted with the WORST reputation ever.

Theres no lipstick that you can put on the Paypal pig to make it NOT a pig any longer.

Thier best choice - to get people to take them seriously - is to %100 cut ties with eBay. Otherwise the nepatism ruins any chance of Paypal being treated like a "grown up company".

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

This user has validated their user name. by: The End

Mon Sep 2 10:24:35 2013

PayPal IS NOT LICENSED to do business in New York. That's why they don't care.
They are based with Ebay. That's how they "Get Away" with it.
P.S.(@BackInBlack) Ebay & PayPal are the only ones "Getting Away" and doing wrong. The rest of us are just doing our best to make an honest living HONESTLY.

Perminate Link for PayPal President Tackles a PR Problem: Account Holds   PayPal President Tackles a PR Problem: Account Holds

by: NetWatch This user has validated their user name.

Mon Sep 2 10:25:05 2013

Rexford, don't forget to blog all over the Internet about ebay's treatment of small sellers too. Yes, ebay can and will continue to slap illegal holds on sellers' PayPal accounts unless the sellers contact the banking regulators in the states wherein they reside (many states only allow holds of up to 10 days)and get the banking regulators to tell PayPal to release the holds.

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