Why you should NEVER leave money in your paypal account.

[quadcitypickers]

I know some people who leave 10-20k in their paypal accounts, I have no clue why, because some banks offer a percentage of interest, even on checking accounts.

When a buyer opens a case, the money for that item is frozen in your account. This means if you have items you need to ship, the amount could be gone, too.

It does not matter if you sold $5,000 worth of stuff, need $500 to ship it all, and someone made a case on a $5,500 item, that money is no longer acessable.

eBay/Paypal expects YOU to have "extra funds" available to ship out an item.

So when you get paid, don't even blink, INSTANTLY transfer the item amount to your bank. Or withdraw it with your paypal debit card if you ship items in the post office instead of printing labels.

As we all know, multi-million dollar companies have the "buffer" to have transactions frozen and continue business, small time sellers don't always have this, and may wish to not use their credit card or go into debt to ship items out.

There really is no reason why paypal simply can't buffer their own money, but if you look beyond that, there is no reason for them not to.

It really should not be the responsibility of the seller to have to come up with extra money due to a buyer opening a claim, anyone can open a claim and sometimes they are opened for nefarious reasons.

Should you be liable and expected to cough up money to ship items? Of course not.

I got in an hour long argument with paypal this morning because someone fradulently opened a SNAD and made my account go negative $100.

While I DID have money to ship my other orders, I explained to them that this "system is extremely broken" because it forces sellers to come up with extra cash when a buyer abuses the returns system.

This SHOULD NOT be the seller's responsibility.

[bigmotormania]

I've never heard of this issue. Then again I always ship from my own accounts using a separate payment form.

But regardless, in the event that a refund is needed, whether it be voluntary or for a SNAD / INR, wouldn't not having the funds available in the account be bad? 

[hawgryders]

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@illinoistreasures wrote:

I know some people who leave 10-20k in their paypal accounts, I have no clue why, because some banks offer a percentage of interest, even on checking accounts.

When a buyer opens a case, the money for that item is frozen in your account. This means if you have items you need to ship, the amount could be gone, too.

It does not matter if you sold $5,000 worth of stuff, need $500 to ship it all, and someone made a case on a $5,500 item, that money is no longer acessable.

eBay/Paypal expects YOU to have "extra funds" available to ship out an item.

So when you get paid, don't even blink, INSTANTLY transfer the item amount to your bank. Or withdraw it with your paypal debit card if you ship items in the post office instead of printing labels.

As we all know, multi-million dollar companies have the "buffer" to have transactions frozen and continue business, small time sellers don't always have this, and may wish to not use their credit card or go into debt to ship items out.

There really is no reason why paypal simply can't buffer their own money, but if you look beyond that, there is no reason for them not to.

It really should not be the responsibility of the seller to have to come up with extra money due to a buyer opening a claim, anyone can open a claim and sometimes they are opened for nefarious reasons.

Should you be liable and expected to cough up money to ship items? Of course not.

I got in an hour long argument with paypal this morning because someone fradulently opened a SNAD and made my account go negative $100.

While I DID have money to ship my other orders, I explained to them that this "system is extremely broken" because it forces sellers to come up with extra cash when a buyer abuses the returns system.

This SHOULD NOT be the seller's responsibility.

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Having available funds to cover all business expenses is the sellers responsibility --- even if "someone fraudulently opened a SNAD"

As you found out having the money in the account is unimportant --- you will be held accountable anyway

A smart seller keeps a balance just in case --- you don't want your sales stopped due to a dispute ...

[odditiesandantiquities1]

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@bigmotormania wrote:

I've never heard of this issue. Then again I always ship from my own accounts using a separate payment form.

But regardless, in the event that a refund is needed, whether it be voluntary or for a SNAD / INR, wouldn't not having the funds available in the account be bad? 

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Ebay give six days for the Seller to refund the buyer after the item is returned. That is plenty of time to transfer funds into PayPal. You don't get interest for your money in there so why leave it there?

However, PayPal is going to claw the money back regardless of the reason in eBay. 

[richard1rst]

Your entire post sounds like you just woke up to the way the world works and you didn’t like it.

** I know some people who leave 10-20k in their paypal accounts, I have no clue why, because some banks offer a percentage of interest, even on checking accounts.

ANSWER: When I go to a trade show to buy inventory they want a credit card, not a check. And Paypal rebates 1 1/2% of my purchases. That is more than the bank is going to pay in interest and more than the bank rebates on their debit cards.

** When a buyer opens a case, the money for that item is frozen in your account. This means if you have items you need to ship, the amount could be gone, too.

ANSWER: If as you say there is 10-20K in the account then that is simply not an issue.

** It does not matter if you sold $5,000 worth of stuff, need $500 to ship it all, and someone made a case on a $5,500 item, that money is no longer acessable.

ANSWER: When is the last time you sold an item for $5500.00? And again, if there is 10-20K in the account you still have plenty left over.

** It really should not be the responsibility of the seller to have to come up with extra money due to a buyer opening a claim, anyone can open a claim and sometimes they are opened for nefarious reasons.

ANSWER: Whose responsibility is it?

I could go on, but let’s give other poster some room.

[the*dog*ate*my*tablecloth]

They put a hold on money because it's hard to get it back if the seller has taken it and refuses to pay. Some sellers used to let their account go negative and then quit using it. Paypal got smart. Why should Paypal be on the hook for a problem with something a seller sold?

[quadcitypickers]

I have a merchant account with square and they cover chargebacks, so why can't paypal?

Think of it this way..you insure your car so if someone runs into it, and it's not your fault, you get reimbursed.

You purchase business insurance, so that if you are robbed, or your business burns to the ground, you are reimbursed.

All things that are not your fault, and you are reimbursed for because it's not your liability.

So you can see the logic-fault when someone opens a fraudulent SNAD, if it truly was fraudulent, then you are put on the hook for having to come up with extra money to ship things.

So while there is insurance to cover liability when not one's fault, and some merchants offer chargeback protection, there is no coverage when it's done through paypal.

If the buyer can immediately claim SNAD, and instanlty damage your cash-flow, you should have some sort of insurance/protection, but nothing exists, other than having to spend your money do to something that could potentially not be your fault, at all.

Also, if your account is zero, and a SNAD is filed, and you decide to leave eBay, and close your bank accounts, they can't collect the money.

So that alone makes it pointless....

[plumbingspecials]

Why you should never tell someone how to handle their business:

BECAUSE IT'S NOT YOUR BUSINESS!

But, you do realize that the scenario you painted IS THE COST OF DOING BUSINESS. You are supposed to figure a certain percentage of your revenue to cover the cost of losses.

Yikes.

Suggest: BUS101

[a*river*runs*through*it]

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@illinoistreasures wrote:

I have a merchant account with square and they cover chargebacks, so why can't paypal?

Think of it this way..you insure your car so if someone runs into it, and it's not your fault, you get reimbursed.

You purchase business insurance, so that if you are robbed, or your business burns to the ground, you are reimbursed.

All things that are not your fault, and you are reimbursed for because it's not your liability.

So you can see the logic-fault when someone opens a fraudulent SNAD, if it truly was fraudulent, then you are put on the hook for having to come up with extra money to ship things.

So while there is insurance to cover liability when not one's fault, and some merchants offer chargeback protection, there is no coverage when it's done through paypal.

If the buyer can immediately claim SNAD, and instanlty damage your cash-flow, you should have some sort of insurance/protection, but nothing exists, other than having to spend your money do to something that could potentially not be your fault, at all.

Also, if your account is zero, and a SNAD is filed, and you decide to leave eBay, and close your bank accounts, they can't collect the money.

So that alone makes it pointless....

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Trust me, PP will find a way to collect. What will you do...go on the lam?

[pikabo-icu]

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@a*river*runs*through*it wrote:

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@illinoistreasures wrote:

I have a merchant account with square and they cover chargebacks, so why can't paypal?

Think of it this way..you insure your car so if someone runs into it, and it's not your fault, you get reimbursed.

You purchase business insurance, so that if you are robbed, or your business burns to the ground, you are reimbursed.

All things that are not your fault, and you are reimbursed for because it's not your liability.

So you can see the logic-fault when someone opens a fraudulent SNAD, if it truly was fraudulent, then you are put on the hook for having to come up with extra money to ship things.

So while there is insurance to cover liability when not one's fault, and some merchants offer chargeback protection, there is no coverage when it's done through paypal.

If the buyer can immediately claim SNAD, and instanlty damage your cash-flow, you should have some sort of insurance/protection, but nothing exists, other than having to spend your money do to something that could potentially not be your fault, at all.

Also, if your account is zero, and a SNAD is filed, and you decide to leave eBay, and close your bank accounts, they can't collect the money.

So that alone makes it pointless....

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Trust me, PP will find a way to collect. What will you do...go on the lam?

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Exactly..

My reply was going to be; Think again.. They can and will, just like any other creditor! 

[quadcitypickers]

Why you should never tell someone how to handle their business:

BECAUSE IT'S NOT YOUR BUSINESS!

Ya..tell that to eBay and paypal, they give advice to sellers and buyers ad infintum.

Again, I'm not talking about people who sell here a LOT, but smaller sellers.

[emerald40]

Also, if your account is zero, and a SNAD is filed, and you decide to leave eBay, and close your bank accounts, they can't collect the money.
______________________________________________________________________

Oh, believe me paypal will find you and if need be garner your wages until they are paid off.

[richard1rst]

***I have a merchant account with square and they cover chargebacks, so why can't paypal?

They can and do. I have had a few times when my account was hacked by a thief. Paypal made good on ALL of the losses.

I have had times when an Item Not Received was filed yet the tracking showed it was delivered. Paypal returned the money to my account.

Sorry, but in general your opinions are in what is commonly and derisively called "Left Field".

[myboardid]

Having a source to pay for shipping costs is, and always should be, the seller's responsibility.  OP, above you mentioned buying insurance to protect against certain potential problems.  Leaving an amount in your Paypal accoun to cover the possibility of a SNAD or chargeback is the way to "insure"  your ability to function as a business.  Sorry, but your argument holds no water. 

[*help_no_brakes*]

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@plumbingspecials wrote:

Why you should never tell someone how to handle their business:

BECAUSE IT'S NOT YOUR BUSINESS!

But, you do realize that the scenario you painted IS THE COST OF DOING BUSINESS. You are supposed to figure a certain percentage of your revenue to cover the cost of losses.

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