The Keys to Surviving the PayPal 21-Day Hold Policy
The “21 Day Hold Paypal Policy” has created a great deal of frustration for many eBay sellers. Below I have some recommendations for eBay sellers who are looking to ease the pain of this new policy:
1. Become informed
By knowing when PayPal is most likely to hold your money and what it takes to get the money released, you can better prepare the hold and react more quickly to get the funds released.
To read about the details of the PayPal 21-Day Hold Policy for Seller, be sure to click HERE
2. Prevent the 21-Day hold to the extent that you can
In all cases, your buyer satisfaction rating must be greater than 95%. A dissatisfied buyer is one who (a) leaves negative or neutral feedback or (b) files a PayPal dispute / seller non-performance dispute or (c) leaves a 1 or 2 star rating in any of the detailed seller ratings categories. More than 5% buyer dissatisfaction automatically subjects you to the PayPal 21-day hold.
Other than having a buyer satisfaction rating greater than 95% you also either have to
(a) have been an eBay member for more than 6 months and you have 100 feedback or more, or
(b) you will need to have received 20 or more detailed seller ratings in the last 12 months.
eBay sellers who are relatively new (less than 100 feedback or member less than 6 months) or who have had little activity in the last year (fewer than 20 DSRs in the last 12 months) are, therefore, automatically subjected to the PayPal 21-Day hold even if their buyer satisfaction rating is greater than 95%.
3. Understand that sometimes you cannot prevent the 21-Day Hold
If you are a seller listing your item in a high-risk category such as gift certificates, video games, cell phones, computers or consumer electronics then you are subject to the 21-Day Hold simply because of the type of product you sell.
4. Do not offer international shipments if you are subjected to the 21-Day Hold
Unless your international buyers will pay express mail shipping costs willingly, it is not in your best interest to offer international shipping options. International shipments take longer to arrive than U.S. destinations and it is more difficult to confirm delivery thus taking even longer for your funds to be released by PayPal. Instead, sell domestically only while you work toward meeting the requirements to prevent the PayPal holds (see number 2 above). When you are not automatically subjected to the PayPal hold then you can once again consider selling internationally.
5. Do not contact the buyer specifically for feedback to get the funds released
PayPal funds are released from the hold if the buyer leaves positive feedback. While you would hope that the buyer would leave feedback immediately upon receipt of the item, that does not always happen. Contacting the buyer to inform them that PayPal will not release your funds until they leave positive feedback puts the buyer in an awkward situation, gives them undue influence over the transaction, and gives an unfavorable impression of you and your business. So, your pleading with the buyer to leave feedback could actually cause the buyer to leave unfavorable DSR ratings with their positive rating if they feel unduly pressured or it could cause the buyer not to leave feedback at all when they otherwise would have done so automatically. Instead of asking the buyer to leave feedback to have your funds released, consider another alternative (see number 6 below).
6. Ship all items with delivery confirmation (postal) or tracking (UPS/Fedex) to a valid address
Be sure to use delivery confirmation if you ship by postal and keep a record of the delivery confirmation number or the tracking number if you ship by UPS or FedEx. If the item is a high-value item, be sure to require signature confirmation. And always let the buyer know in advance the method by which you ship an item, especially if by a method other than postal. Some buyers may have had problems with a particular delivery service and they might tell you in advance if FedEx seems to never be able to locate their address, for example. Again, your goal is to get the item to the buyer as quickly as possible. Once the item has been delivered to the buyer, give PayPal the delivery confirmation number or tracking number. The PayPal funds will then be released to you approximately 3 days after the package has been delivered.
Also, it is important to note that you MUST ship to the address supplied by PayPal not an alternative address that the buyer might provide in the PayPal notes or in a separate email. And if you attempt to run a shipping label and the carrier notifies that the address appears to be invalid, do NOT ship but immediately contact the buyer to work out the issue before shipping. If you need to, request the buyer’s phone number from eBay and give them a call. Again, it is best not to mention the PayPal 21-Day hold issue.
If you fail to provide the delivery confirmation or tracking number to PayPal and the buyer does not leave positive feedback, then you will not receive your held funds until 3 weeks after the payment was made.
7. Be professional and calm with all dealings with PayPal personnel
PayPal employees cannot change the 21-Day Hold policy and they cannot get your funds released any more quickly than what the rules state. Therefore, no amount of pleading for leniency or for an exception, no amount of complaining about the policy or threatening PayPal customer service agents will help you. Instead, provide the shipping information that is necessary to get your funds released in a timely manner. Be diligent and persistent in your efforts but always remain professional and calm. Place your call to PayPal when you have had a few minutes to sit down and relax first and call at a time when you are not rushed.
The goal is to get your PayPal funds released as quickly as possible with the least amount of effort and stress while, at the same time, working toward preventing the funds from being held anymore in the future.
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You can also add Tracking Numbers to Paypal transaction page for high dollar items to have your funds released sooner. There are few things you have in control, but communicating tracking numbers is one of them.
TekGems
November 15, 2008
Good tips, as usual.
tula
November 16, 2008
[...] recent post: “The Keys To Surviving The PayPal 21-Day Hold Policy” on the Brews News, details all of the ways a seller will be subject to the 21 day payment hold policy when accepting [...]
The Cold Hard Reality of PayPal Payments and eBay : Agents of Revenue
November 16, 2008
As a merchant, I would NEVER ship an expensive item without having cleared funds. Ebay gives NO notice at the time of selling that this could happen if using paypal; instead they let a seller get a rude surprise after getting payment to learn about this policy. As it is insane to ship an item without knowing if the funds are good or not, and also insane to trust Paypal to release your funds as they outline, since they have a long reputation of freezing funds beyond what they state, the best thing is to completely avoid using paypal for your first 25 transactions in a year, and only then use them IF you have positive feedback and meet the other criteria. But in reality, it is best to completely avoid them, and instead have a buyer pay you directly with a moneyorder or check, or use google checkout for credit card payments. I used to not like google checkout, but now they are looking good as an alternative to accepting paypal payments on ebay. I have a merchant account, so I will use that, but for those who sell infrequently, just to clean out their garages, or make some side money, beware. Use google checkout or have your buyers pay you directly. This whole setup screws the seller and only really protects paypal. If paypal really cared about protecting the seller, they would not urge the seller to quickly ship out their item without having confidence the money was cleared. Instead ebay would set it up so that all buyers would know they have to wait 21 days before their items are shipped, just like paying with a check, so paypal and the seller know the funds are good. Anything else is an insane way to do business as a seller. Do you think Walmart is going to ship out online orders, letting paypal hold their money for 21 days? I don’t think so.
Vivian
November 28, 2008
This PayPal 21 day hold is WAY OFF BASE!!!!
PayPal tells you NOT to ship until you have received cleared funds!!!!!
This is just another way for GREEDBAY to make more money at your expense!!!! They hold the funds in theri bank account earniong interest while tou are expected to ship and get feedback in order to get your money?????
That’s not the way retail sales work!!!!! Why should sellers have to wait for their money?????
On top of that, the PayPal 100% buyer protection is NOT 100%!!!!! It depends on whether or not they can take money from the seller’s account. I won an item for $200 including shipping, paid with PayPal. Never got the item as it was destroyed in shipping and insurance claim was denied due to seller fraud. Seller refused to refund my money so I had to file the claim with PayPal. After over 2 MONTHS I finally got a partial refund of only $150!!!! 75%, NOT 100%!!!!!
THERE IS NO VALID REASON FOR PAYPAL TO HOLD FUNDS OTHER THAN GREED!!!!!!
LED
December 8, 2008
CEO, BBFG, LLC
McDonough, GA 30252
email:info@xxxxxxxxx.com
12-10-2008
To: Office of the Attorney General State of California
Re: Paypal account “xxxxxxxx@xxxxxxx.com”
cc: Federal Trade Commission, Office of the Attorney general state of Nebraska, Complaint Assistance Unit of the Division of Consumer Services of the Department of Consumer Affairs, Better Business Bureau, American Express, Chase, FBI Fraud Unit, Paypal
Dear Madam/Sirs,
We are submitting this complaint to compel you to renew your investigation of Paypal for ongoing fraudulent activity and to seek regulation of this financial entity to the accountability and rule of United States law.
Our story is a shocking symptom of the problem at hand. Paypal is withholding $33,306.86 that was successfully reversed to our Paypal account on November 7, 2008 without claims or disputes by any other party. Paypal initially declined to approve the transaction that became reversed, and no money changed hands between buyer and seller. The buyer made alternative payment arrangements with the seller because Paypal also failed to deliver the payment venue with the ease its advertising promises. Although no claim or dispute by the seller has been placed on the amount in over 30 days, Paypal continues to hold our $33,306.86 without offering any reason or date of resolution after repeated phone calls.
This presents numerous problems for which we think Paypal should be investigated and regulated. This pattern of milling and holding legitimate charges from honest customers on a large scale, in an imperious manner, is self-evident to anyone who investigates the volume of Paypal complaints. Whether this pattern is suggestive of secondary gain or whether its just bad business service is the real concern at hand for the US government. If the former is true and Paypal wishes to fund their own investment strategies with customer money, then customers at least need a Prospectus for full disclosure prior to that money being used elsewhere as “capital” to Paypal. If the latter is true then customers will still need some sort of consumer protection from mayhem the likes which we are experiencing. Paypal must not be allowed to continue to advertise “ease of use” while ensnaring customers in charge back schemes and debacles for which there is no accountability to a third party. As such Paypal is a threat to many businesses who find their cash flow suddenly impeded by questionable Paypal decisions for which their is no governing authority to mediate. In many cases businesses are financially damaged by such undesired mismanagement.
To this date, we still have not received our own money returned to us. Nor was a purchase completed. And, our credit lines continue to be inaccessible while Paypal holds the funds.
We will readily submit any necessary evidential documentation at your request.
Sincerely,
tibo
December 10, 2008
this is definitely ridiculous. i have not used ebay in quite some time but decided to sell my wedding dress and ebay was the best route to go. i sold it for $250 and since i have less than 100 feedback (i hardly use ebay) i found out AFTER the buyer paid that i would have to wait 21 days to get my money. they should release all this info up front. (which i’m sure they do in the terms of agreement but to be completely honest, who ever reads those things?) anyway, i am getting delivery confirmation through usps so that i can get my money sooner. but i am still, inside, worried that they will hold my money for some reason. it’s just not right.
lisa
January 26, 2009
This is a tactic to put money into their [paypal's]Bank and gain interest on it for 21 days. America is in a financial crisis, like $500 + Trillion of derivities debt and 3 leading banks combined liquid assets are 1.7 Trillion. Time to take alternate steps to secure our money transactions.
D Borgetta
January 26, 2009
Paypal is currently holding my money for 21 days and the wait is truly grueling. The a-hole I sold my item to won’t leave me any feedback and even though a paypal rep told me I could have access to my money after 3 days of a confirmed delivery, 5 days later, MY MONEY is still “pending”.
DavidJuaquin
February 4, 2009
I got my funds released when I asked for a supervisor and now I have reported them to Better Business Bureau
Nadine.G
May 2, 2009
I sold several computer items on Ebay before I learned of the Paypal 21 day hold, and 8 weeks later I still have not received my money. Calling Paypal/Ebay is about the biggest waste of time ever. BUT LADIES AND GENTLEMEN, I FOUND A LOOPHOLE!”
Anyone and everyone can sell on Ebay without worrying about Paypal holding your funds anymore. I have even opened an ebay store and it’s doing quiet well. The secret? Ebay was forced to allow other merchants besides Paypal and I switched to Moneybookers! I am selling well on Ebay and no matter what the item is I get my funds instantly!! All sellers should drop Paypal and switch to Moneybookers and re-level the Ebay playing field! Spread the word…
Sylvester
May 4, 2009
I just had a transaction with paypal and they placed a hold on the transaction. I promptly notified the buyer that I am really sorry but I will not send out an expensive computer processor that could be destroyed and disputed while not being paid. I called paypal and they agreed with me but would not do anything for me. I promptly refunded the buyers money (within 30 minutes) and listed it on craigslist. If it does not sell then I guess I will build myself another computer. I repeat will not send out a product without cleared funds available to me. EOM.
Colin
May 8, 2009
I believe this policy is unfair to the seller as well. What is to stop the buyer from destroying it within 21 days and then scamming us (the sellers) or what is stopping them from sending fake photos of a damage version of that product they found on google.
Greg R
May 22, 2009
I don’t see CHARGEBACK in that there entire survival guide.
michel
June 15, 2009
Michel, that is because a chargeback is a completely different topic from the 21-Day Hold issue.
thebrewsnews
June 15, 2009
The ideas stated above are legitimate ways to deal with the inconvenient hold now placed on by eBay.
acenet
June 26, 2009
[...] a blog article titled “The Keys to Surviving the PayPal 21 Day Hold Policy” (click HERE for that article). In that article, I stated that one way to survive the PayPal 21 Day Hold is [...]
PayPal Glitch or Advance Warning of a New Random Holds Policy? « TheBrewsNews
September 6, 2009
Who do you work for? Paypal?
kevin
October 18, 2009
Kevin, I work for myself. I am an ecommerce seller.
thebrewsnews
October 18, 2009