I have been a long time Pay Pal member for years. When I first joined I was only using them for purchases I made on line. A short time after, I began to sell on Ebay. This advanced more and more until I became a power seller on Ebay. I always used Pay Pal as a source of payment in my auctions and websites. However, during my time with Pay Pal I have seen the good, the bad, and the ugly throughout company. The website comes off as being cut and dry just being an on-line bank. This is, for the most part, true. However, there is a lot more going on in the fine print at Pay Pal that you need to really look at.



The Good

Pay Pal is the best when it comes to fast money. Sell something on the Internet and have someone pay you through Pay Pal. Then “POW” your money is in your Pay Pal account instantly. There is a small transaction fee the Pay Pal charges for each payment transaction you receive depending on the amount of payment. This I can live with as this is how they make their money. As the saying goes “you pay for convenience”. They state that the fee rate is, 2.9% + $0.30 USD per payment transaction (this does always come out to this ratio so I suggest reading Pay Pal’s terms). If you are selling a lot on the Internet you just need to plug this ratio into your selling price of what you are selling because in high volume sales it will add up fast. This can also be lowered if you choose to get a merchant account and are approved. A must if you are selling a lot.



Another great thing you can get is the Pay Pal debit card. This works exactly the same way as your bank debit card. You will also receive a cash back bonus every time you use the debit card. (as long you use it as debit not credit). Your cash back bonus is 1.5% each transaction. Your spending limit and cash withdraws can go up in time as well. There is also no wait on your money. As soon as money enters your Pay Pal account you can spend it on the Internet or using your debit card.



In order to receive all of this you need to get verified. This means you need to hook Pay Pal up to your checking account. This is easy to do and a must. Another benefit this gets you is, you can spend money from your Pay Pal account even if there is not enough money in the account. The remainder of the purchase will be automatically deducted from your checking account. This is great as it saves you all of the hassles of transferring money back and forth all of the time.



Last thing Pay Pal is very good at is, protecting the buyer. The buyer is very well protected buying over the Internet whether it is on an auction site or a company site. If you do not receive what you paid for, there are a lot of ways to go about getting a refund. These ways are easy to do and Pay Pal will work with you on any complaints.



The Bad

First off, Pay Pal is a third party merchant bank. This you need to read through thoroughly before getting too involved. This is important if you plan on selling a lot on the Internet using Pay Pal as a payment option. Most of there terms and services benefit someone making payments through them not receiving them.



For example, if a buyer is unhappy for any reason with any transaction that was made through Pay Pal all you have to do is file a complaint and Pay Pal will dig right into it. This could be anything from, the seller never mailing you the product or you are just not happy with it. This part I like of course. You feel very safe making payments with Pay Pal and not worried about getting what you purchased. However, as a seller the only real protection you have is, keeping every shipping receipt and E-mails back and forth between the buyer and you. End the end, this not always enough. This is especially true if you allow oversea payments in US currency.



A quick example of this, I sold a very rare Beanie Baby to someone from the UK. Two weeks later they complained to Pay Pal they had not received it yet. I sent it air priority mail and that can still take longer than two weeks to receive. Pay Pal takes the $440.00 from account right away. When I called with the proof of shipment they tell me that the insurance form I have is not proof. They explained that is not the tracking proof I need that I had shipped the Beanie Baby. I run to the Post Office telling them of my situation. They look at me with confusion and tell me that the insurance form I have is the tracking form. They do not do separate tracking on oversea shipments. The insurance form that I had was the tracking number and that is all that I can get. I ask, for the hell of it, is this the same for all of the Post Offices in every state? The man laughed and said yes. I run back home and call Pay Pal again. I tell them exactly what the Post Office told me. This got me nowhere. They tell me again that I need a tacking number which there no way I can get. After arguing with the lady for a good 15 minutes I hang up. I had to file a claim with the post office. After waiting over 3 months (that is how long you have to wait for the post to consider a shipment overseas lost) they found and returned the Beanie Baby to me. So I had to resell it again and this time not using Pay Pal.



The Ugly

This is where Pay Pal fails in every way imaginable. This includes extremely long wait times on the phone, very rude customer service representatives, and the unwilling to help the seller in certain cases. They come off with with the attitude that they could care less about you. I speak from a lot of experience in these matters. Doing a lot of selling for the past couple of years I have had my share of issues I needed to contact and take up with Pay Pal. Again, if you are the buyer they are very willing to work with you. If you are the seller they seem like a complete different company. I have won a few battles with buyers that try and screw you using Pay Pal but, the process is very long and tedious.



Another thing that drove me crazy using Pay Pal is the fact if there is any complaint made against you they take the money right out of your account and put it on hold. Whether the money is there or not. There is nothing you can do about it. If the money is not in the account that they try and take out your account will go in the red until funds enter the account to make it even. So, if you received a $100 payment for something and 3 weeks later someone files a claim you loose the $100 until the complaint is resolved. That really sucks if you have already spent the money. Pay Pal states (this is funny to me) that buyers have 30 days to post a complaint. However, they have the right to follow up on any complaint for up to 6 months. If a buyer makes a complaint after the 30 day period they will probably not follow up on it. I have found that for the most part this is true. However, I have seen the other way as well.



If you are a selling on the Internet my only advice to you is, keep excellent records for at least 6 months. Save all of your shipping forms (insurance, tracking, and receipts) well placed and dated for convenience just to be safe. You may want to place a disclaimer on your products that you will only accept refunds if made within a certain time frame. Check your laws on this matter to protect yourself better then what Pay Pal can do for you. I have done this on my Ebay auctions and have had no problems. Also, you may want to very seriously consider not accepting Pay Pal as a payment option. I only accept money orders or personal checks and have seen no affect on my auctions. Ebay tells you that sellers using Pay Pal will receive extra bids. However, if you have good feedback with an auction site that is all that you should really need. Plus you don’t have to pay the extra fee for each and every payment transaction. You just will have to wait a couple of more days for payment to arrive.



Another Example

I sold an older used Sony video Camera on Ebay a while ago for $122.00. Buyer made a very prompt payment through Pay Pal. He sent an E-mail telling me payment was sent. Got the camera packed up and shipped right away never hearing from he again.



5 months later I get a charge back on my Pay Pal account. Poof, the $122.00 was taken out of my account and put on hold. Again, 5 months later. This started the long and tedious phone calls to Pay Pal. This was my first charge back and I really did not know exactly what it was. They explained to me that this means the buyer has put a complaint to his credit card company for a fraudulent purchase. He was saying that his credit card was used without his permission. I argued this of course asking why and how could he do this 5 months after payment was made and he received the camera. Did he not receive a bill and see the $122.00 charge in the past 5 months? Pay Pal said nothing to me and just stated that this will have to be taken up with his bank.



I keep very good records and had the shipping insurance form, tracking number, and even his original E-mail to me about him sending payment. He signed his name at the bottom of this E-mail. I sent Pay Pal a fax showing the insurance form and a copy of his E-mail to me. All they kept telling me was they had to wait until this was resolved with his bank. And, that it could take up to 3 months to get this resolved. I was furious. They took the $122.00 right out of my account with no warning or explanation then tell me that I have to win a battle with his bank to get it back. They even took out the payment fee they charged me in the original payment made from the buyer. I had to argue with them just to get this money back. If there is no payment transaction now why am I payment them a free. They did refund that back to me. However, I can do nothing about this myself but, provide them with the information they asked for. I asked if I could get the bank used so I could call them and talk to them myself but, had no luck there either.



I did end up winning the battle with the bank (so Pay Pal tells me) and Pay Pal put $122.00 back into my account. Not long after this I received the camera back from him. However, it is now broken. The tape holder will no longer shut. Right after this, here comes Pay Pal again taking out $122.00 from my account. I go through the hours of phone calls again just to find out he sent them a copy of the shipping insurance that he mailed the camera back to me. When I explain that I just received the camera and it no longer works they tell me there is nothing else they can do. I will have to take him to court for my original $122.00. It is no longer in their hands. I now have had this money twice and loosed it twice. And the second time they will do nothing to help me as a seller. So, the buyer got the use of a Sony camera for 5 months, broke it, returned it and ended up paying nothing. That is the protection Pay Pal offers the seller even when they have documented everything Pay Pal says they need in order to be protected.



At the end of all of this, I did win my case in court. But, I would have just been better off accepting money orders or personal checks only. This could have been avoided that way. Or, if had come back with any complaint he would have to take me to court which is where we ended up in the first place.



Conclusion

I am very skeptical of Pay Pal’s business practice on a lot of things. I feel that if you are using them for purchases made on line they are a great company. If you are using them as a way to receive money you may want to reconsider. I don’t feel going through everything I have had in my years with them worth getting payments faster and paying them a fee every time.

As for the recommendation, I do for someone using Pay pal to buy. I don't recommend for someone using Pay Pal to sell.


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