Paypal: Can you get ripped off easily?

[LeftCoast]

Hi all,

I'm selling a laptop via the trader section of the Forums, and am considering being funded through Paypal. It seems I've read some horror stories about getting hosed this way(the buyers somehow cancel payment to PP after the item is shipped, and PP doesn't back the seller up and refuses to fund the seller or automatically removes the funds from the seller's bank account after it shows funded). Can anyone elaborate on this? Are there any other pitfalls to using PP, like do I have to pay a service charge/percentage for using the service?

Are there any other options available? This can't be a unique situation here.

As always, thanks in advance.

[EvilRick]

I don't know about all that. But if it were me, I would withdraw any large amounts of funds as soon as they were deposited. I don't keep but like $10 in there and xfer from the bank if needed.

[LeftCoast]

Yeah, I'd certainly not keep it in my PP account, but PP has access to my checking account info, right? It's been a while since I've used it to pay for anything...

Do you know if I'm charged a percentage/charge from PP?

[EvilRick]

"PayPal will never make transfers from your bank account without your authorization."

That's from their User Agreement. I don't think they can legally withdraw funds from your account without your consent.

Now they can take legal actions against somebody that might have done something illegal, but that would take time.

You might check out their "Seller Protection Policy" to clear up any other questions you might have.

[LeftCoast]

Of course, should have started there. I'll remember this the next time I think of suggesting someone should RTFM.

[EvilRick]

I just suggested it since I haven't even read it either.

[MDS]

Paypal will most certainly withdrawl money out of your checking if the buyer files a complaint and you don't have time to reprond. Never ship a large item until payment is cleared and transfering to your checking account. If it clears they can't stop payment unless they claim fruad and they will contact you and give you so many hours (I think 48hrs) to respond so Keep proof of mailing the items and have proof that the system is working as promised.

[MDS]

"If your Paypal account reflects a negative balance as a result of a chargeback settlement, your immediate attention to the issue is necessary.

PayPal sellers are not automatically protected against transaction reversals, such as chargebacks. Therefore, qualifying PayPal sellers may want to sign up for the Seller Protection Policy.

If a buyer, or sender, transaction is reversed for any reason, and there is no Seller Protection Policy for that transaction, the seller must reimburse PayPal for the amount of the reversed transaction, plus any associated fees incurred by PayPal.

PayPal may use funds from any currency balance to recover amounts owed to PayPal for chargebacks or for any other reason. (A chargeback, or reversal, occurs when a buyer rejects or reverses a charge on his or her credit card.) Pending ACH or check withdrawals may be canceled on the account.

Furthermore, any payments received for an account with a negative balance will be applied towards the negative balance regardless of a member's Payment Receiving Preferences. PayPal will forcibly convert all negative balances to the U.S. Dollar (USD) balance after the account has been in a negative balance for 21 consecutive days. The referenced negative balance above does not include negative balances which may result from a "pending" reversal, such as in a case where PayPal has yet to conclude an investigation of a complaint or situation.

We recommend you add funds to your account to bring your balance to a positive status within the next seven (7) days. If your account balance is still negative after seven days, we have no choice but to pursue all available collection options. These protections are necessary to keep PayPal the easiest, safest and most cost-effective way to send and receive money online for millions of people worldwide. "

I had someone try a charge back to me and they tried taking back from my checking only I went to the bank and told them that it was a unauthorized withdrawal and they blocked it. So paypal closed my account and threatened action against me for canceling the withdrawal. It took almost 3months to get things straightened out. This took place before ebay purchased paypal though.

[IMSirius]

Yeah, now that eBay is in charge, I don't think there's much possibility that paypal'll do something stupid like the horror stories of yore. Just follow the standard precautions and you'll probably be fine.

I forgot where/if I copied the link, but this one person had reviewed paypal way back when, during the period of screwy charges, and honoring random charge claims, dipping into peoples' accounts, not requesting verification, etc. giving it a 0 pretty much. They did another review shortly after the takeover and gave something of an about-face rating (the 4/5 stars, or whatever they used), citing the new User Agreement as a real winner, actually protecting users from scam artists. I'll see if I can't dig the link up at some point.