Weird Happenings at PayPal

madcap_magician

madcap_magician

Farts rainbows.
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Feb 27, 2005
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So, last month I got notification from PayPal that they were putting funds in my account on hold, which prevented me from immediately transferring about $800 in money to my bank, which I usually do immediately after receiving funds through PayPal to avoid the risk of PayPal taking it.

I have heard from mainly Facebook knife groups of this happening, and PayPal does not seem to explain well how they decide to do this.

However, in the notification, they did say I could request a limit in the amount of funds that would be available to me each month if I told them how much money I anticipated I might receive over the next three months. I did this, and it seemed to have been approved almost overnight. Apparently there is some sort of limit of $2,900 per month of incoming funds. I use G&S for the most part (sometimes people send F&F, but I don't ask for or solicit it - nor do I refund it, I just mail the knife if they do that). It seems like they are doing this until they have some idea of whether you are a 'good seller.' Ordinarily I don't come anywhere close to this amount, but in January and February I sold fourteen knives and just tipped over that cap. That's way more than I usually sell, I just happened to have made a bunch of impulsive purchases last fall that I was letting go.

Interestingly, today, I got an e-mail from them saying my amount of instantly available money per month was being permanently increased to $7,800 in sales per month from $2,900, due to my "consistent sales history" and because I "developed great relationships with [my] customers."

I suspect they're using some sort of AI algorithms to assess seller 'quality' when they believe someone is running a payments for some sort of business through PayPal, and the low monthly max is for sellers who are not established, though they provide no guidelines for how to get established or become a 'quality' seller. In my case, I have always shipped the same or next day and updated PayPal with the tracking information immediately and I suspect my quick shipping, adding of the tracking info, and the fact that no one has ever complained about any sale I have made is what helped me out.

Anyway, long story short, I thought it might be interesting to see what other people's experiences with PayPal's opacity about selling requirements and sometimes seemingly arbitrary holds, and if other people are doing things that are making their PayPal experience better or worse. Specifically, I am wondering if some of the people seeing funds held are using PayPal to update the buyer on tracking information (or if they're just messaging or e-mailing tracking to buyers without updating it in PayPal). It would be interesting to see if that data point is something that helps you be a 'better' seller on PayPal. I am also interested if PayPal is somehow flagging frequent F&F sellers for holds because they suspect ToS violations. That seems likely, since patterns of misusing F&F seem real easy to spot.
 
M miafricker most people complain about PayPal, but never even reduce their usage . Be one of the (relatively) few that takes a stand. I closed my account a couple years ago and haven't regretted once. Sure, it has cost me a few sales and purchases; but I don't really care about either.
I was disappointed that I couldn't join the Buck Collectors Club because I didn't have/wouldn't open an account...but I got over it pretty quickly (I'd actually forgotten about it until I was making this response)
 
madcap_magician madcap_magician I just had this happen as well.

Quotes from the relevant posts in my sub forum where I talked about it:

David Mary said:
[...]

Also something interesting happened. This is perhaps my most ambitious run yet, and due to the increased PayPal activity on my account, I received an interesting message that I have never seen before about approaching a threshold of allowable cash flow within a certain time frame, and the email said something about adding tracking numbers to transactions and other best practices to prove that I am actually sending products out, or any further transactions coming in (once I hit the threshold) would be placed on hold. Now there won't be tracking numbers for these transactions for at least a couple months, so you can imagine my concern about that.

I called PayPal and asked an agent to help me understand. She explained to me that I had reached 75% of the threshold, so I don't have holds on any funds at this time. I asked her, if I were to go above the threshold what would happen? She explained that as long as I provided tracking numbers to prove that my goods are going out, I could go above the threshold and funds would not go on hold. I said these are deposits, so I may not have tracking numbers for quite a while. She said that when a transaction is for a deposit, the process to use is to go into the transaction, click "add tracking" and instead of selecting "shipped" and providing a tracking number, instead select "order processed", and this functions in the same way to alert the system that that particular transaction is not pending a change in state. Previously what I had done once an item was ready that someone had paid a deposit on was add tracking to both the balance due transaction, and the original deposit transaction. She said that is not the correct way to do it.

So I will be updating my practice now to the process she prescribed, and applying the "order processed" state to deposits from now on, so those of you who have placed orders on this run may see email notifications from PayPal to the effect shortly.

[...]

I was kind of stressed when I called PayPal today, but Cierra, who I spoke with was understanding and took the time to answer all my questions, and frankly this threshold process sounds like a very good way to protect buyers and sellers alike. And that threshold can be raised if a seller is consistently doing sales above that range. I read stories about how people hate PayPal, or PayPal screwed them over, etc. but any time I have had a concern they are always willing to educate me, and I always come away with a renewed sense of validation for using their service these past fifteen years.
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David Mary said:
She told me this was brought in recently, like within the last three years or so. How it works is if a PayPal account shows higher than usual activity beyond a certain threshold, it triggers that hold funds process as a safeguard, in case the account had been hijacked. That way the funds are in reserve in case of a sudden influx of disputes. She said it also protects the seller, in that in the event of disputes, the funds are still available in the account so that the seller doesn't experience chargebacks. But she also said that if an account goes over the threshold two months in a row, a request to increase the threshold would more than likely be approved, if the account remained in good standing while its activity increased.
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David Mary said:
It's a temporary hold due to increased activity beyond the specific account's threshold, as a sort of "waiting period" to see if disputes start flooding in. She told me that the period per transaction is 21 days, and that after that the hold is released.

Again, I did not breach the threshold for my account, I merely received a notice that I was approaching it. [...]
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I've never had any tax or other issues with PP but I'm an enthusiast and buy/sell maybe once every 3 months at most, in other words, I don't think I'm likely to be mistaken for a small business.
 
They used to do something similar for Ebay sales for the 1st some amount of sales. They would hold the funds for 30 days or something, I think from the point of reported delivery by the shipping service/tracking info.

I find it odd they started doing it for established accounts, maybe it's a anti-hacker thing or something, seeing how many people are getting scammed across BF recently.
 
David Mary said:
madcap_magician madcap_magician I just had this happen as well.

Quotes from the relevant posts in my sub forum where I talked about it:
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See, that's great info! Thanks! I wish they had included some of that in the email to me. There was literally no advice about how to 'be a better seller,' they just approved my increase request and then randomly told me I was a good seller and was getting even more of an increase.
 
More people should stop using them!
 
madcap_magician said:
See, that's great info! Thanks! I wish they had included some of that in the email to me. There was literally no advice about how to 'be a better seller,' they just approved my increase request and then randomly told me I was a good seller and was getting even more of an increase.
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You're welcome. I do believe communication is important, but sorely lacking in so many walks of life and business nowadays.
 
David Mary said:
You're welcome. I do believe communication is important, but sorely lacking in so many walks of life and business nowadays.
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I think this explains a lot of the issues people have had with PayPal. PayPal has these restrictions based on the way you use it, but they didn't tell us about them, they just make decisions on our accounts based on rules they never shared.
 
It's not that they never shared. They share terms of service updates all the time. People sometimes don't read it, so they don't know what was shared, and when they run into it, lots of people seem to go the route of rampaging against PayPal instead of either reading the documentation or talking to a rep. I can't be bothered to read all the documentation they send, so I call a rep whenever I don't understand something that has happened. But just now, I checked, and sure enough their process of holding payments in the case of what they term a "potentially high risk transaction" is in the documentation.
 
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