Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue May 12 2015 11:27:13

Sellers Say PayPal Payments Being Diverted

By: Ina Steiner

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Online sellers say some of their PayPal payments from customers are being diverted, leaving them without their funds and leaving their customers impatiently waiting for their orders to be fulfilled. The problem appears to be isolated to Etsy, which acknowledged the problem and is being blamed for the snafu. But it raises the question of whether this could happen to other marketplace sellers as well.

Over a week ago a seller reported the issue on this Etsy thread. "I received an email saying an order was placed yesterday through PayPal. I've got the Etsy receipt number but PayPal never received the transaction. I've contacted PayPal and they need the customer to contact them. Would this be a problem between Etsy and PayPal communication? I've counted the buyer regarding this problem, but thought I would ask here in case it was a bug issue."

Other sellers reported the same issue, including this seller who wrote, "I have a similar issue, and PayPal told my customer that her payment went directly to Etsy rather than to my account. We've both talked to PayPal now but are still waiting to hear back from Etsy. And it was marked Paid here on Etsy and in her PayPal Account, but the money just never made it over to mine."

The next day, a moderator posted a response to that seller. "We've received your email. I've gone ahead and escalated your issue to our team to investigate."

But other sellers wanted to know, "Why would a customer's PayPal payment go to Etsy's account first? If it went to the wrong PayPal account, that's a PayPal problem, assuming all the addresses are right."

Another opined, "Etsy should not have access to our dealings with PayPal, nor should PP be handing our money to Etsy. What the heck?!"

Yesterday, Etsy posted another response. "My name is Joe and I work on the Payments team here at Etsy. We understand the frustration you all are having with this issue, and be assured that we are working hard to resolve it. At this time, we're working directly with PayPal's engineering team to determine the root cause of the issue and how to address it. On our side, it looks as if we're sending the correct information over, however, as you all are reporting, a small number of payments seem to be going to the wrong place. We'll continue to push this until the issue is fixed, and we’ll be sure to update you all as we learn more."

Sellers said their buyers are also getting impatient. "Can Etsy PLEASE give my customer their money back, so I can send her a pay pal invoice OR deposit the money into my account? My customer is VERY frustrated and I would like to be able to send her order out to her. It's been 9 days, and still no answer on this. We all deserve to know what is going on."

How is it possible that a payment made from a customer to a merchant ends up in a marketplace's pocket? Even if it's something on Etsy's end as many sellers suspect, it would appear it's a problem for PayPal as well.

Last October, sellers reported a similar issue, but it affected sellers not only on Etsy, but on eBay, Bonanza, and even people who transferred their money from one account to another. We've got questions in to Etsy and PayPal this morning.

Update: An Etsy spokesperson said the company was aware of the issue and was working to resolve it. "We hope to have more information later today. In the meantime, you can find out more in Joe Blossom's post in the forums."




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Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: ajeweler This user has validated their user name.

Tue May 12 11:59:59 2015

I think this glitch is due to the E**Y paypal split up, I was speaking to a paypal rep they are trying to locate the glitch, but I was told they are receiving a lot of complaints from sellers and they are on it currently

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: gizmo This user has validated their user name.

Tue May 12 13:44:01 2015

Sounds like fraud to me ,or another hack? Likely an inside job , a tech skimming. Incompetent programs? Glitch? I think not! Just collecting % interest on moneys held , lost , whatever excuse they use. Sounds like more theft to me.

If it walks , talks , looks like a rat , it likely is. Oh! ,& falls  on the sellers good name , of course.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

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

Tue May 12 14:52:14 2015

Many of us have disabled PayPal as a payment method on Etsy, with an announcement for our customers, until Etsy fixes this.  Their failure to communicate why sellers' money went to Etsy instead is scary. Not to mention failing to transfer the money from their accounts to the rightful owners!

I am lucky in that buyers of my items always contact me in advance to discuss their project.  More traditional sellers do not have that advantage, though.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: Watching the Wheels This user has validated their user name.

Tue May 12 15:17:02 2015

So, if push comes to shove why can't the sellers file claims against Etsy via Paypal?

Let Paypal tackle Etsy. Who's to say maybe it's a stunt geared to get more sellers to use the direct checkout. This woud also NOT be the first time that Etsy stooped to skeevy.

"we" all know that Etsy is the type willing to go to their graves admitting NOTHING. It's always been their MO.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: serioussellers This user has validated their user name.

Tue May 12 15:49:43 2015

Several times a few years ago (in the more successful pre-blackout/pre-throttling years), buyers' payments through PayPal suddenly were vanishing (as were some of the funds we sent to others).

They had paid but the funds never appeared at our end in our PayPal account.  So, ''officially'' our Ebay store was still awaiting payment. Our detective work on that issue/mystery/glitch once again yielded another eBay surprise.

It turns out that if you have ever made a typo when you were typing in your PayPal account/email info anywhere on Ebay, that typo might subsequently be periodically autofilled in a box --- without you even noticing it.  Fortunately the ''typo'' PayPal email address/account did not match anyone's real account, so money was just in a PayPal limbo.  We were able to convince EB/PP to return all of the money to the intended recipient/account.  If this was to happen now, we suspect that it might be more difficult to convince CSRs to put the money back where it is supposed to be.  Perhaps they would not even acknowledge the diversion to a non-existent ''typo'' PayPal account.

In fact, when we first discovered that this had happened to incoming payments several times (within a few days), several PayPal reps eventually had a good recommendation.  They had us officially add that non-existent ''typo'' account as a linked account in PP's files/archives for us  ... just in case we made the same typo in the future.

Then (with the ''typo'' on the official list), instead of going to another of EB's/PP's la-la lands, any misdirected funds/payments (courtesy of any eBay autofilling ''glitch'') would then ''know'' where they were supposed to go.  Ebay likes to be so helpful and autofill so many things that are often absolutely incorrect (such as Item Specifics that have nothing to do with the item being listed). This Ebay member's one time typo has required years of increased vigilance. One typo can come back to haunt you in the Byzantine world of Ebay and PayPal!  

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

This user has validated their user name. by: iheartjacksparrow

Tue May 12 15:54:35 2015

Etsy isn't doing so good recently. First their card reader goes belly up, and now their sellers' money is going into their pockets.

And I bet JD is kicking himself that this didn't happen on eBay. He'd just say it was the "cost of doing business."

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: pace306 This user has validated their user name.

Tue May 12 18:49:33 2015

"Mr Sparrow" :)

JD is kicking himself HE didnt think of it FIRST! lol

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: Ebay's Slow Death This user has validated their user name.

Wed May 13 03:40:44 2015

Interesting, because I had an Ebay-PayPal problem yesterday.

In the morning, I got a PayPal e-mail saying an Ebay Buyer had paid for a postcard. I went to my Ebay account, and the order wasn't there. I waited several hours for it to show up, but it never did.

I went to my PayPal account, and the Buyer was listed there. But, when I clicked on the drop down box to Print a Label, it came up with a red box, which said, ''Go Back To Your Account''.  After waiting several more hours, nothing changed, so I contacted the PayPal number in the red box.

The PayPal guy was very helpful, but couldn't figure out what happened. He had me clear my cookies and jump through some other hoops, but nothing worked. He said it was an Ebay problem. I told him, I dreaded contacting Ebay CSRs. He said he would stay on the line with me.

He called Ebay for us, and we got a lady with an accent. I told her the problem, that a PayPal payment was made on an order, but the order didn't show on my Ebay account. She couldn't comprehend what I was explaining. The PayPal guy told her the problem also. She put us on hold a couple of times, then said I should just click the item on Ebay as Sold. We both said I couldn't do that, because it wasn't there. Also, the listing was still active.

Finally, out of frustration, I said I would send the postcard out, and end the listing. I had the information I needed from the original PayPal e-mail.

That order still has not shown up in my Selling Manager on Ebay. Towards the end of the call, the CSR did ask me all my information about my name, address and account name. Call me paranoid, but I didn't get any Ebay orders for the next eight hours, and they are still coming in slower than usual.

Ebay CSRs are absolutely useless!  I guess they know they can't solve any problems, so they just talk you in nonsense circles, until you give up.

So, somehow, PayPal is not communicating well with other companies. The PayPal guy said the orders come from Ebay to PayPal and then go back to Ebay. I suspect the problem is on PayPal's end, because they are trying to adjust their programming, before the official split from Ebay.

Does this mean I have to check to see that every order shows up on PayPal now, to make sure the money is actually there? I have never done that before. I didn't think it was necessary. But wait, JD probably has his dirty little hand out trying to grab some of the money enroute. Better start checking to see if the payment got by him!

What is scary about this, is that I usually don't pay much attention to what the item is in the PayPal e-mail. But, my brain must have been turned on at that time, because I noticed that particular postcard wasn't on my list of orders on Ebay's Selling Manager. Several others were, but not that one. I am lucky I caught it. I'm just afraid I didn't catch others, and the Buyer's are waiting for their postcard to arrive.  

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

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

Wed May 13 07:44:30 2015

Ina, any update from Etsy to you?  We haven't heard anything since yesterday afternoon that an announcement would be made soon.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: Volvo351 This user has validated their user name.

Wed May 13 09:32:58 2015

OK, stop me if you've heard this before: "We understand your frustration..."

No, they don't. If they did, they wouldn't keep forking up time after time after time...

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: Volvo351 This user has validated their user name.

Wed May 13 09:34:48 2015

Oh, I see that in addition to the "..understand your frustration..." boilerplate we get the worn-out "...clear your cookies.." carp.  

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: RCL This user has validated their user name.

Wed May 13 10:21:25 2015

Wow. This is bad in the EXTREME. Thanks, Ina and Dave, for getting this info out so quick and coherently! I think Etsy just can't get out its own way...too much too soon because of the eBay exodus.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

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

Wed May 13 11:42:38 2015

The last time this happened :

"The PayPal executive struck and killed by a California train last week suffered from depression and bipolar II disorder his family said.

Eric Salvatierra, 39, vice president of customer advocacy and operational excellence, was standing on the tracks of a Caltrain commuter train Friday morning when hit."

The "Skimmer" will ALWAYS be found.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

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

Wed May 13 12:52:23 2015

Etsy released a statement from an un named Paypal source about this that seemed to imply it was a Paypal issue.

However, one of the sellers who still doesn't have HER MONEY was told by Paypal that it was an Etsy problem, and left her hanging on the phone.

Etsy hasn't returned to the thread to explain what happened and hasn't helped the seller get her money.  As of 12.46 pm, at least!

:(

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: Noneya This user has validated their user name.

Wed May 13 16:15:57 2015

Someone is going to get the traditional ice cream party and 3 armed sweater award for this.
Bad programmers can always find a paycheck at Etsy.  

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: sally sad This user has validated their user name.

Wed May 13 21:22:35 2015

Ever since Chad came on with the Code as Craft idea, which lets coders and interns deploy code unsupervised, the Etsy site has gone downhill. When they go into to fix the chaos, such as the search clumping, they can't work their way back to the last functional settings.

While eBay seller are flocking to Etsy, Etsy sellers are going to eBay. I call it changing seats on the Titanic.

And why the fork cannot Etsy make their sellers whole? They should NOT be holding any of that money!!

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: donald This user has validated their user name.

Thu May 14 00:11:47 2015






I never trusted PayPal after eBay bought it .



Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: Jane Dough This user has validated their user name.

Thu May 14 00:42:54 2015

I sell my vintage items on Etsy so that I don't have to take PayPal, I closed the account last Nov. Etsy payments have gone smoothly for me, why would anyone put up with all the PP BS when they don't have to?

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: sundance This user has validated their user name.

Thu May 14 00:50:14 2015

Well, I didn't like the direct pay thingy when it first came out on Etsy and did not sign up.  My shop will remain on  vacation hold until Etsy gets its act together  with all the various issues that the sellers are facing these days. I personally   do not think it is a PayPal problem since I am selling on numerous sites and all of my paypal money has shown up right when it was supposed to.

Perminate Link for Sellers Say PayPal Payments Being Diverted   Sellers Say PayPal Payments Being Diverted

by: cayenna This user has validated their user name.

Thu May 14 01:00:16 2015

JD's been doing it all along just in all the other ways; for years.
Yes, I would like to know how the money ends up in etsy's pocket? I do not like that at all! No privacy of our accounts? Why would something like this be manipulated? Sounds to me like a problem with both paypal and etsy getting on the same page since paypal's changing. I don't like that my earnings can be  manipulated like this.  

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