We feel quite lucky that our reserve is only 3%. Some sellers’ we’ve heard from are having to stomach 10% reserves!

We also asked whether we would be able to earn interest off the reserve, but we’re told due to Paypal’s Banking License this wouldn’t be possible. But we were told this is an option for US reserves.

We’re still selling well on eBay, but are definitely looking to concentrate a lot more time and money away from eBay as a result of this.

PP could effectively hold onto your companies profits for the entire duration of your business, increasing the amount they hold as you grow.

This must be a total nightmare for any seller effected, especially if you sell on eBay, your only choice then is to leave eBay or lump it and try and survive with a big chunk of your cash taken away from you.

If you’ve got a reserve on your acccount, get used to it. And if you haven’t, I’d get ready for it.

If you want to learn more about what’s /really/ happening in PayPal, read this inside information in the following link:

I was a middle management type with Pay-Pal

We, at Software Candy, just got the email, stating that reserve of 10% with a 60-day rolling period is being placed on our account. We use PayPal to process sales of software, downloadable directly from our web site (http://www.softwarecandy.com). We have never had a chargeback or a dispute. We are a 100% reliable & responsible customer oriented business, solving any and every customer concern to his/her FULL satisfaction. So clearly, there is something strange going on in PayPal.

As I read through the comments here, the picture becomes clearer… Very good suggestions are given here. Serious businesses should diversify their payment options, not limiting themselves to PayPal only, Google Checkout only, Moneybookers only, Authorize.net only, etc.

To me, this whole thing stinks like a company that wants some working capital at the expense of its customers. 10% of a whole lot of customers’ money for up to 90 days is a great boost to their cashflow.

Basically, because of this, we are ditching PayPal. We are not going to have our business compromised by dealing with an organisation so opaque as PayPal who treat their customers (us!) with such a patronising disdainful attitude. Our search for an alternate online payment processor has given us several leads, including Paymate (Australian) and of course, Google Checkout.

Good luck to those of you who are forced to stick with PayPal, and all tghe best to you as you involuntarily turn your business profits into a slush fund for PayPal’s.

Are you sure no interest is earned? I opted into their money market fund years ago and remember reading that the 21 day holds collect interest when opted into the money market account. I would assume rolling reserves would be handled similarly.

1. There is no set criteria for setting a rolling reserve on anyone’s account.
a. This is done arbitrarily by someone with no guidelines in place
b. Paypal is unable to provide or show how they came up with their methodology for placing a rolling reserve, for how long or for the amount.

2. They have no form of Due Process to where one can make a case to provide facts as to why they should not have a rolling reserve placed or for tha amount or duration of the placement.

3. Paypal employees and customer service personnel are intentionally not given information about rolling reserves and therefore can not answer any questions. I find it very hard to believe that I am the only one to ever call regarding rolling reserves!
a. To get the department which handles rolling reserves is almost impossible to find. They apparently will only send you a form e-mail to communicate reiterating what the CS personnel have already said

4.The money which is held does not pay any interest or is held in any form of trust or escrow. This is suspect in it’s own right.

5. I spoke to 12 different people and got transferred 9 different times. Each time I was told that I was going to the correct department that could help.

6. The phone number in the U.S. I received to call are

1-866-837-1851 -Merchent Services
1-866-331-4021- Merchant Services again
1-888-221-1161 Customer Service ( a complete waste of time)

I urge each person who is affected by this rolling reserve issue or has a sense of fairness to write to or contact the U.S. Attorney General’s Office

U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

AskDOJ@usdoj.gov

Department of Justice Main Switchboard – 202-514-2000

Office of the Attorney General – 202-353-1555

The taking and use of monies from a person without their consent under the guise of returning it later should be reported. Thank you

I assume they realised thered be an uproar initially but then people would get used to it and carry on using their services.

If this is true, they should be able to explain to me exactly why my case is a worry for them. If my chargebacks or customer complaints are too high (and I really don’t believe they are), they should be able to back this up with a figure, and then inform me of what figure I would need to attain to satisfy them.

The only reason I can see why Paypal wouldn’t want to do this, is because they are happier keeping the reserve in place.

If we refund a payment, the risk element associated with that goes so why still hold the money and make us dig out of our pockets to subsidise the refund?

*however* PayPal’s excuse would be that if they tell you what they’re looking for, people will game the system. FWIW…

If this is the case, why would Paypal not give us any examples or figures to justify the reserve being put in place? Unless Paypal tell us WHY they are unhappy with us, it is very difficult for us to rectify this problem.

A little transparency from Paypal would go a long way to resolving this.

http://forums.ebay.co.uk/thread.jspa?threadID=1100224597&start=113

“Tamebay’s post asking whether PayPal applies reserves to sellers’ accounts has created a lot of interest on the eBay community message boards. We explained here a few days ago that we do not apply reserves to all seller accounts. But as the debate has continued, it might be helpful to offer a more detailed explanation of our approach.

PayPal’s main aim is to provide a safe and secure payment service for buyers and sellers. You’d be concerned if a financial services organisation didn’t actively try to minimise the risk of fraud and insolvency amongst sellers, which could impact PayPal and its customers. While we cannot guarantee that fraud and insolvency will never happen, we can reduce their impact. Payment providers do this by using arrangements such as various type of guarantees, delayed settlement arrangements and minimum balances, to name just a few.

Tamebay focused on PayPal’s use of reserves – in other words, holding in reserve a percentage of the seller’s account balance. PayPal does apply reserves to a very small proportion of accounts. To repeat what we said before, it’s completely wrong to suggest that these are applied to all seller accounts, and we have no intention of doing so. Also, the proportion of an account balance typically ‘reserved’ is way below the 20% quoted in the Tamebay post.

PayPal has sophisticated ways of monitoring accounts to spot certain ‘trigger events’ which suggest action is required. For example, we might review an account where there has been a sudden increase in chargebacks, or a big increase in buyer complaints. These are examples of the types of events which may prompt us to apply a reserve.

PayPal, eBay and the Seller and Buyer communities have a common aim: a safe and thriving marketplace. We cannot always prevent insolvency and fraud but we can take steps to protect customers from their consequences.

PayPal UK”