More Paypal nonsense

I've been sitting here for the last five minutes trying to make a point eloquently. I'm having a hard time with it. So I'll just put it like this:<p>What else can we really expect from a product whose parent is <i>eBay</i>?<p>This company is a <i>fucking fossil</i> with all the hunger for customer satisfaction of a used tissue.<p>Is it convenient for users? Yeah. Is it worth gambling your entire business on? Given the lack of accountability these clowns enjoy, I'm going to say probably not. Neither eBay or PayPal has evolved in any meaningful way in the last decade. On the contrary: they've steadily declined in user experience and customer satisfaction. Why trust a business to such a stagnant concern?<p>On principle, on practicality, for the sake of all of our futures: just say no to PayPal.

A little experiment: Apply for a merchant account, saying that you're not a registered nonprofit, but intend to take donations to buy gifts for kids. I just phoned my bank and they literally laughed in my face.<p>People who have customer service nightmares with Paypal are generally doing something that no other payment processor would touch. I hear complaints from people who have been accepting pre-orders of a game or pre-registration for a conference, which is obviously a massive risk for a payment processor. If you found a merchant account provider willing to take such risky business, they'd demand a huge deposit and charge well above the odds.<p>Paypal provide an absolutely exceptional service in allowing pretty much anyone to accept card payments without a great deal of fuss. The flipside of this is that they have to deal with risky accounts retroactively, which means they have little choice but to freeze accounts that set off their fraud detection algoritms. If you prefer to know where you stand, apply for a merchant account - in most of the world, that will involve a long, expensive vetting process.<p>People continue to use Paypal because for many use cases, there aren't any better alternatives. This isn't because Paypal or the card companies are abusing monopoly power, but because payment processing is hard and fraud is expensive.

At the risk of being perceived as the devil's advocate, let me ask a question.<p>I've heard of dozens of stories about Paypal along a similar vein. "They locked my account for unreasonable reason X and now are keeping the money".<p>Most of these stories seem anecdotal. Can someone point to a rigorously documented set of cases where both Paypal and the customer's side of things are reviewed?<p>Over the last few years, all of these "Paypal screwed me" stories have sounded like all the complaints a few years ago about Apple seeming to reject apps arbitrarily. As far as I know, the complaints about Apple from devs have largely died down since we've had a fairly straight-forward list of do's and don'ts to work from.<p>If most of the people reporting problems with Paypal are doing things that are inconsistent with their policies and then saying publicly how they're being screwed, then that creates a negative reputation for other people who have never personally had a problem with Paypal.

PAYPAL: I haven’t seen that PDF. And what you’re doing is not a worthy cause, it’s charity. ME: What’s the difference? PAYPAL: You can use the donate button to raise money for a sick cat, but not poor people.<p>Sigh. At the risk of pedantry, it's hard for my wtf filter to believe this without more context. Is this a direct quote?

These horror stories are so common that I have to ask: why does anyone still use PayPal?<p>I ask this in the most constructive way possible... is there a set of use-cases that PayPal is still the best for? Is it a lack of awareness of alternatives? International availability? Something else?

I'll be looking at alternatives after receiving the friendly "We reviewed your account and determined that there's a relatively higher than average risk of future transaction issues" email that states they'll be holding my money for 21 days...<p>I have never made a claim. I have never had a claim filed against me. My account receives maybe $500/year, tops. I send $500/year, tops. HUDGE risk of transaction issues.

It looks like PayPal's site for creating a donatiom button makes it really easy to get yourself into trouble...<p><a href="https://www.paypal.com/us/cgi-bin/?cmd=_donate-intro-outside" rel="nofollow">https://www.paypal.com/us/cgi-bin/?cmd=_donate-intro-outside</a><p>I don't see anything on that page to suggest you have to be a nonprofit or somehow a worthy cause. They optimize their web page for encouraging people to create a donation button and then provide you with a shitty experience on the back-end if you make a mistake. They aren't trying very hard to keep you from hurting yourself. This is why government creates consumer protection laws, so maybe PayPal needs a big warning label next next the link encouraging you to create a donation button.

"Donate" has a very specific meaning, at least in the US, and comes with numerous accounting connotations, including the ability to write off the expense. As many people don't realize that "charitable donations" do /not/ include "donations" to purchase toys for children, it is misleading to use the term "donation" in this circumstance.<p>Meanwhile, often the person /accepting/ the donations doesn't understand this either. You cannot, for example, accept a $5 "donation" and then send someone a $5 product back to them: that is a "sale", not a "donation". You do not "donate" to Ikea in exchange for a chair: you "pay" them $5 for it.<p>In this case, this person obviously doesn't get it. "Why? These are my customers!" &#60;- Right, which is why they are not "donating". These "customers" are buying toys, which are then being sent to other people on their behalf. These are /purchases/, like any other. This seller even goes so far as to state they are operating "just like any other retailer would".<p>At which point we ask the killer question: are they collecting sales tax? This is where the theoretical issues suddenly run right into the brick wall of reality, as sites that believe they are accepting "donations" on behalf of charitable work, such as handing out toys to children, put everyone in a position where they fail to realize that they are operating an online retail store where the receipts need to be reported (to the IRS), sales tax needs to be collected (for sales made to people in the same state), and the people buying the gifts can /not/ write off the expense.<p>PayPal is therefore very right to be wary of these situations, and often contacts people making the claim "only a nonprofit can use the Donate button", as the PayPal representative stated in this e-mail. I know this, as they contacted me once: I had a button "Donate to saurik.com" on the top of my website, which I ended up changing to "Contribute money to saurik.com".<p>That said, I am actually not 100% certain that that is their official "for everyone" rule. This author was correct when they said that "worthy causes" is mentioned in the PayPal PDF [1] on this feature: a more full quote being "for your nonprofit or worthy cause"; that said, the PDF also claims that when you sign up for your PayPal account you should do so "selecting “nonprofit” as the type".<p>(edit: Reading some more context of the story from Regretsy, including more responses from PayPal, I think that what PayPal means by "worthy cause" may actually be those "on behalf of verified non-profit organizations", not that that is made clear at all in that PDF.)<p>Their website [2], meanwhile, only ever seems to talk about nonprofits, but goes into detail regarding confirming non-profit status only for obtaining a discount on processing fees. I can certainly see that this is confusing, and I also believe I see a lot of websites around that /do/ use "Donate" in weird ways; certainly, if they really cared to limit it to nonprofits, they could actually enforce your account type /was/ nonprofit before letting you use it.<p>So, I personally believe that they simply contact vendors who seem to be running a for-profit sales business (even one that is losing money or breaking even "for the children") using "donate", rather than people who are simply using "donate" "without being a non-profit". How do they figure that out, you ask? My guess is that users are flagging the transactions as fraudulent, or complaining to PayPal using the dispute transaction feature (which some PayPal users treat pretty flippantly), using wording that indicates that they were buying something.<p>(For the record: I'm pretty certain that's what happened to me. I /also/ run a retail product called Cydia, which accepts payments through a separate PayPal account for SaurikIT (my company). People can contribute money to the cause I represent (open access to devices), or purchase things from Cydia. However, some users would just send my personal account (which I use for contributions to my work) $1.00, either by sendmoney or /my "Donate" button/, and then go on to say that they paid me $1 for some product in Cydia and that I didn't send it to them.)<p>In the end? While I think PayPal needs to be clearer on some things, I do not actually blame them for their reaction here. This setup seems "sketchy", was probably not handling the taxes on the sales correctly, was almost certainly handling the "extra money sent to the family" part incorrectly, and in the end went over the top with this emotional appeal (seriously? I have to have crying children surrounding this text?) rather than looking at this as an intellectual debate about PayPal's policies here (which might be interesting, and might cause everyone, including them, to learn something).<p>[1] <a href="https://www.paypalobjects.com/en_US/pdf/PP_Online_Donations.pdf" rel="nofollow">https://www.paypalobjects.com/en_US/pdf/PP_Online_Donations....</a><p>[2] <a href="https://merchant.paypal.com/us/cgi-bin/?cmd=_render-content&#38;content_ID=merchant/donations" rel="nofollow">https://merchant.paypal.com/us/cgi-bin/?cmd=_render-content&...</a>

It really perplexes me as to how paypal can get away with withholding money from people. What is stopping them from simply picking accounts at random and saying, "actually, I don't think you deserve this money, so we'll keep it."

I have never seen a company more in need of competition. I realize its massive installed base makes it tough to approach, but isn't there somebody who can compete credibly? I have to think that there's enough user dissatisfaction that people would defect in droves, given a decent alternative.

Yikes, are you really only allowed to use "donate" buttons if you're a nonprofit? I use them as a "tip jar" on my blog. What's the options for for-profit when you're giving money for nothing in particular?

Google does this too for the Donate button: <a href="http://checkout.google.com/support/sell/bin/answer.py?answer=72721" rel="nofollow">http://checkout.google.com/support/sell/bin/answer.py?answer...</a><p>For a kicker, you MUST be based in USA otherwise according to their terms, they'll hold the money like PayPal does.

Almost this exact scenario happened to me a few months back, and they did the same, asking me to sign an agreement saying I knew what I did was wrong (it wasn't) and that I wouldn't do it again. I absolutely refused to sign such a thing, and thankfully a friend of a friend knew someone in a high position at PayPal that finally got it all sorted out. Two weeks of extreme stress later, but at least it got worked out. Take unusual measures and if you are lucky you'll get it worked out.

So just to be clear, when the Paypal rep says "We know what you are trying to do and we aren't going to let you do it", what do they think the scam is?<p>That the site would accept "donations" for a fraudulent reason?

Fun fact: The horror that is PayPal came from the same guy who gave us our hope for the bright future of commercial spaceflight. PayPal has vertically integrated every step required to stiff you. They can do it safely and reliably, but a public mishap like this one may cost them.

I'm sorry that you don't realize what you are trying to do is nearly equivalent to a Nigerian scam, but in the eyes of a payment company, it is. So cut Paypal some slack.

This is an amazing, in-depth blog post that explores all the relevant policies and web pages regarding the use of the donate button. <a href="https://thegreengeeks.wordpress.com/2011/12/06/why-paypal-is-wrong-regarding-regretsy-according-to-their-own-policies/" rel="nofollow">https://thegreengeeks.wordpress.com/2011/12/06/why-paypal-is...</a> Still nothing! No explanation anywhere on the site that might explain this behavior.

I'm a huge fan of WePay. They don't play these games.<p>With all of the different competing solutions out there these days, I don't know why anyone continues to use Paypal.

After using PayPal on a number of projects over the years (both successfully and painfully unsuccessfully) I've come to the conclusion that PayPal is fine if what you're doing is completely standard.<p>Once you start doing something that could be interpreted as even slightly non-standard then it's more trouble than it's worth and the odds are that PayPal aren't going to play ball.

PayPal has unlocked the account and made a donation to Regretsy<p><a href="https://www.thepaypalblog.com/2011/12/regretsy-issue-resolution/" rel="nofollow">https://www.thepaypalblog.com/2011/12/regretsy-issue-resolut...</a>

I wonder if PayPal has misunderstood what Regretsy is doing.<p>For example, suppose PayPal think that Regretsy is buying cheap toys at cost, marking them up for profit, adding the cost of shipping, then selling them to customers as part of their ordinary business model (perhaps not even paying sales tax on them), but of course agreeing to send them to poor kids instead of the people paying the money.<p>PayPal would have every right to block such transactions, and I'd expect it. It wouldn't be charitable on the part of Regretsy nor would it be donation to a worthy cause, but a partial "donation" to Regretsy, a for-profit company. It would be ordinary profit making on the part of Regretsy in the guise of charity work!<p>I think Regretsy should just clarify with PayPal what it is they are actually doing. If Regretsy are honestly doing this for needy kids and not for their own profit, then I cannot see how it would be a win for PayPal to not accommodate this in some way.

Anecdotal, but anyway...<p>Earlier this year, Paypal notified me that they required more information about my personal account - namely confirmation that it wasn't a business in disguise. Due to my mistranslating from American English to British English, I accidentally declared that I was a charity (non-profit of course has a specific meaning), and Paypal promptly froze my personal account.<p>It took one phone call to the UK helpdesk, and about 20 minutes to get this fixed, and my experience with their customer support was fine. I screwed up, they were polite and helpful, no problems.<p>What WOULD help is if their UI translated their terms for the benefit of non-US customers (if they'd said "charity" instead of "non-profit" I'd never have chosen that option) and gave you an obvious way to say "I am not a business" (if they'd had that I wouldn't have been on that page in the first place), but I can't fault their customer support.

Paypal has a reputation for stuff like this...can't exactly be a surprise

Too much is too much. Closing my PP account. So far I haven't seen an online shop that doesn't have alternative payment options other than PP. In Germany (Europe?) we have ClickAndBuy [1], which works great so far. Buyer protection is usually sold separately via Trusted Shops [2] (but has to be payed for by the seller). This also eliminates the various COI arising from the payment processor also trying to police account owners. And I can choose to not add additional buyer protection costs for shops that I trust in.<p>[1] <a href="http://clickandbuy.com" rel="nofollow">http://clickandbuy.com</a><p>[2] <a href="http://www.trustedshops.com" rel="nofollow">http://www.trustedshops.com</a>

I hope Square buys Stripe, figures out the international bits, adds some features, and then starts eating away at PayPal's market share.

<a href="http://i39.tinypic.com/25fizw1.png" rel="nofollow">http://i39.tinypic.com/25fizw1.png</a><p>Paypal wins still?

Looks like they settled it: <a href="http://news.ycombinator.com/item?id=3320154" rel="nofollow">http://news.ycombinator.com/item?id=3320154</a>.

Looking at the detailed arguments in this thread, my only advice is to use a little common sense. Or does that not exist anymore?

I'm sure everybody knows by now, but this is certainly not the first time paypal has done this kind of thing:<p><a href="http://www.somethingawful.com/d/news/paypal-fiasco-summary.php" rel="nofollow">http://www.somethingawful.com/d/news/paypal-fiasco-summary.p...</a> (slightly nsfw)

I am SO sick to death of "I used Paypal, Paypal screwed me over" posts. The first few times when it happened and no one was aware of how they operated, sure, I felt bad for the person/people.<p>Now I just think "The definition of insanity..."<p>I guess I'm just an elitist prick though?

Wonder what percentage of users are facing such an issues with PayPal. As somebody who's just in the middle of setting up payment solution (UK) with PayPal, such a stories are not making it easy to justify the decision to go this way.<p>In my eyes, PayPal is just another corporation, with all of its bureaucracy, both processes-wise and the way how they handle their customer care.<p>My bank is not making it easier to get started (otherwise I would have merchant account), so why would I expect PayPal would handle edge cases otherwise?<p>EDIT: jdietrich already made this point <a href="http://news.ycombinator.com/item?id=3319045" rel="nofollow">http://news.ycombinator.com/item?id=3319045</a>

The donate button thing -- that's got to be because of tax reasons, right?

At the end of the day, Paypal is a slave to the credit card associations. To that end, whenever they find something out-of-the-ordinary, they have no choice but to act. The sad reality is, they really don't have any latitude in cases like this, if they want to prove to their credit card overlords that they are tough on fraud.<p>For whatever reason, it seems that they'd rather be known for having terrible customer service than own up to the fact that they are hog-tied as to their policies on what kinds of transactions they can process.

Paypal wants to be a bank without being regulated as a bank. If they were regulated, this sort of fiasco would get their charter revoked.<p>In addition, the business courses I'm taking all (in the text books and case studies used in classes) point to how eBay is trying to transition away from the auction model and turn into fix-price sales as some sort of discount Amazon Marketplace. Making life miserable for smaller retailers and auctioners is part of this goal.

Out curiosity, why wouldn't PayPal just put categorical warnings on the payment page that allows merchants &#38; buyers to assess the risk themselves?<p>So if a merchant understands these relative risks, they can opt in to a high risk warning category, in order to make sure accounts don't become locked, and buyers can then fully understand what they're getting into via the warnings.<p>I mean really this is all about liability right...or maybe is it that I'm expecting too much...?

AlertPay is a good alternative. Fees are a bit high, but there is no such thing as a "limited" account, unless you send/receive fraudulent funds of course.<p>The problem is that AlertPay is not accepted by many online services. Once that is solved, I believe that it could probably compete with PayPal.

Never before have I read an article and been greeted by the mental image of a vein bursting in my brain, the blood spewing out of my eye sockets, forming itself into an axe, and traveling through a magic portal to mutilate a company's board of directors.

There's a script in this blog page that makes Firefox freeze and crash.

I'd love to know more about the legalities of a company (that isn't a bank) withholding funds for months. PayPal must be making a pretty profit on the interest accrueing on those accounts.

Paypal is a bunch of scumbags. They deserve to go out of business.

PayPal is just as likely to hold funds for 6+ months if you're not selling a product if using "Buy Now."

Someone should start an anti-paypal campaign that recreates the paypal buttons, except they have a big red X through them, and link to a collected list of grievances. I'd put one on my site... I dealt with all this garbage in 2004 and haven't used them as a seller since.

No sympathy here.<p>Abusing "donations" on paypal to avoid paying fees and taxes is not a good business practice. Either own up to the fact that you are indeed selling something or incorporate as an actual non-profit, neither is particularly onerous.

I am so glad I turned down that job with Paypal

I'm going to be somewhat direct here.<p>I allege that what Paypal is doing here (holding funds over 10 days) is illegal.<p>In order to do what Paypal does in the USA, you need licensure. They point out that they are not a bank. Indeed, they aren't: in many states they are classified as a money transmitter. In 8 states, they have no license to operate.#1<p>And, Indiana also requires licensure for money transmission. IC 28-8-4-20 (a) A person may not engage in the business of money transmission without a license required by this chapter.<p>What is this money transmitter stuff? In essence, the law in all the locales I have checked (I have not gone through every one), indicate only a short holding period (5-15 days) and only allow holding of money of a known crime. So indeed what they do is absolutely fraudulent. In other words, if you have a patent troll corporation with many lawyers, target Paypal for their illegal behavior. #1 Source: <a href="https://www.paypal-media.com/state_licenses.cfm" rel="nofollow">https://www.paypal-media.com/state_licenses.cfm</a>

i use dwolla

uhm... don't use paypal?

Next time use bitcoins )

<a href="http://bitcoin.org/" rel="nofollow">http://bitcoin.org/</a>