How to Resolve PayPal Payment Holds in 2024

By Simon Slade

7 min. read

On this page

Why Does PayPal Hold Payments?
How To Get PayPal Funds Released
How To Avoid Payment Holds In The Future
Bringing It All Together

On this page

Why Does PayPal Hold Payments?
How To Get PayPal Funds Released
How To Avoid Payment Holds In The Future
Bringing It All Together

PayPal is one of the most popular payment methods on the web. However, there are a few downsides that correlate with using PayPal.

There’s one, in particular, that we’d like to talk about today: payment holds.

If you use PayPal, you may know all about this pesky downfall. If not, we’re about to save you time, energy, and hopefully stress.

We’re going to shed some light on PayPal's payment holds policy and provide you with a few steps to to avoid payment holds, and how to get your money if you’ve already fallen victim to one.

We’ll also explain how you can minimize any negative impact it may have on you, your clients, and your business!

Sound good? We thought so, too. Without further ado, let’s dive in.

Why Does PayPal Hold Payments?

payment hold

Image Via: paypal.com

Back in January, 2012, eBay changed its policy on payment holds. In a talk with the Times Tribune, workers at eBay explained that this policy was put in place to “Make sure that there’s enough money in your account to cover potential refunds or claims” as well as “increase the quality of the auction experience.”

You may be thinking, “But, I’m an excellent seller! I’m top-rated and have excellent feedback. PayPal won’t hold my payments, will they?” As a matter of fact, they will.

Whether you’re new to eBay or not, PayPal holds will affect you all the same. While this may send you into a pit of despair at first, these holds won’t last longer than 21 days.

In fact, your payment may not even be on hold for that long! Payment holds can be lifted as the status of the shipped item is updated.

Meaning: when your package is marked “shipped” and a tracking number is provided, the hold will be taken away. (If anything, the payment hold will be lifted when the buyer leaves feedback for you).

Still not sure why PayPal has placed your payment on hold? Here are a few reasons to be on the lookout for:

You’re new to eBay. If you’re not a valid seller and haven’t sold more than a few items, PayPal will put your payment on hold to make sure you’re delivering the item(s) in a timely manner. This is just because PayPal wants to ensure you’re not a fraudulent seller.
Your item may be fraud. Selling electronics, phones, tickets, and gift certificates on your eBay store? Guess what? These items are known to be under the “fraud” category. While your item may be 100% authentic, PayPal won’t (and shouldn’t) let up on this. When the buyer leaves feedback for you claiming the item is authentic, your payment hold will be lifted.
Your buying and selling history doesn’t add up. Identity theft is common on the internet, and PayPal is no stranger. Let’s put it this way: If you sell bedsheets and pillows, and then start selling adult movies out of the blue, PayPal (and eBay) will watch your account to make sure you’re not a victim of fraud or identity theft. This may anger you (especially if you’re truly the one selling these items) but you’ll thank these services if you ever find yourself a victim of fraud.

Now that we’ve explained why PayPal holds payments, let’s dig into how you can get your funds released in a quick and stress-free way.

How To Get PayPal Funds Released

There are a few good ways to get your PayPal funds released, but the most effective ways of doing so are:

Print your labels directly from eBay. By doing this, you (and your customer) will receive the tracking information ASAP. The tracking number will be automatically linked to the PayPal purchase and, in most cases, the hold over your PayPal account will be released within 2-3 days.
If you’re drop shipping your products, be sure to upload the tracking number from the supplier into the PayPal transaction history. By doing this, PayPal will link the tracking number and your payment hold will be released sooner, rather than later.

It’s easy to do both of these things, but in case you’re unable to, you can ask the buyer to leave you a review on the day they get the item.

Because PayPal won’t release the payment hold until the buyer rates and reviews you, this may be the best way to ensure you get your money in a timely manner.

If, however, the package is lost in the mail (or the buyer is unresponsive) PayPal will automatically release your payment hold after 21 days.

Unless, of course, the buyer is disputing your store and claiming you sold them junk. This will result in a loss of money, as well as endless amounts of stress.

To avoid this, be upfront with your customers and they’ll repay the favor. As long as you both remain calm, positive, and responsive, you’ll both be happy with the purchase decision!

How To Avoid Payment Holds In The Future

While everyone is at risk of a PayPal payment hold, there are ways to ensure that it doesn’t happen to you.

Or, if it does, it won’t be often enough to bother you (or your business).

Let’s talk about some of the ways you can avoid payment holds in the future.

Have a top-notch seller status

Being a top-rated seller on eBay will come in handy in more ways than one. A few ways to get to the top of eBay’s seller list include:

Being an eBay seller for more than 6-12 months.
Above 95% feedback score.
Less than 20 DSRs (Detailed seller ratings) within 12 months.

Before we get into the negative aspect of your seller rating, let’s dip into DSRs quick. A DSR will either make or break your store and we’re here to make your store that much better!

The DSR score won’t be shown alongside feedback that your customer leaves for you, nor will it affect your overall feedback score.

The detailed seller rating system is based on a 1- to 5-star scale. 5 stars is the highest rating whereas 1 star is the lowest.

A good way to get 5-star ratings from buyers is to communicate with them, describe your items correctly, and ship as quickly as possible.

By doing these three things (and selling a good product), you’re almost guaranteed to get a 5-star rating with nearly every sale you make.

Now, let’s talk about what will affect your seller status in a negative way:

High rating of buyer disputes.
Low DSRs (meaning, if you only get 1-2 score ratings).
Inaccurate (or incomplete) account/product information
Inconsistent payment activity (a good example of this: let’s say you usually make $100-300 in payments per week. If all of a sudden you receive $5000 in payments in one week, that’d be odd).

It’s easy to keep your seller status (as well as your store) out of the negatives if you simply communicate with your customers and provide true up to date product descriptions.

Another thing to look out for (if you don’t want PayPal to hold your payments) is to stay consistent. What does that mean…?

Be careful with the items you sell

As we stated before, you don’t want to go from selling only bedsheets and pillows to selling adult movies.

Of course, most eBay sellers start small, and then broaden their store. This is completely fine (and we recommend doing it)!

However, you’re going to want to move this process at a slow pace. Don’t overwhelm your clients with new products all at once. Ease into it, see how you like it, and, if it works, continue to scale up.

Here are a few factors PayPal looks into when it comes to selling items on eBay:

Sudden changes in products.
No established history selling the products on your eBay store.
Selling “high-risk” items. (Tickets, electronics, phones, gift certificates, etc.)

Surprisingly, every single eBay seller will go through at least two of the factors listed above.

Can you guess what they are? Sudden changes in products and no established history selling the products on your eBay store.

You cannot avoid these two factors. When you start an eBay store, you’re not going to have established history. Not to mention, you’ll be changing your store from empty to full.

Every single seller will go through a payment hold at first. If you follow the general rules we’ve laid out for you, there’s a chance that you won’t be a victim for long.

Many people believe eBay discriminates against new sellers and this is simply not the case.

In fact, there are hundreds (if not thousands) of high-volume eBay sellers who have their payments held on a regular basis.

Bringing It All Together

It’s clear that payment holds are a nuisance. However, they’ve proven to be incredibly helpful in some cases (they protect you from fraud, after all)!

Though, just because they’re helpful doesn’t mean they’re wanted. Keep in mind these few tips to ensure you’ll be free of payment holds after a while:

Stay consistent with your customers. Answer their questions, provide excellent product descriptions, and never sell fraud items.
Keep your DSRs around 4-5. Higher ratings = better trusted stores.
Don’t change up your store too fast. Take it slow, see if you like it, and, if you do, scale up. Don’t rush!
Print your labels directly from eBay (if you’re selling there) and always enter your tracking number.

If you follow those three steps, you can almost guarantee that your payment hold will be lifted in no time.

And if you do get a payment hold, try to get your customer to rate and review their purchase as quickly as possible.

If you’ve found this article helpful, be sure to share it with your friends who also run an eBay store!

About the author

Simon Slade

CEO of SaleHoo Group Limited

Simon Slade is CEO and co-founder of SaleHoo, a platform for eCommerce entrepreneurs that offers 8,000+ dropship and wholesale suppliers, 1.6 million high-quality, branded products at low prices, an industry-leading market research tool and 24-hour support.

View profile

Was this lesson helpful? Let us know!

Happy to help! Share this article with others (they’ll thank you later)

Copy link

122 Comments

Paul Hereford-Smith 6th of August

And yet when you ask PayPal hold your money they say no and I have heard this many times when I have to actually call them when I have had money held for no reason. On all occasions was not even dealing with Ebay or anyone else for that matter. Just a simple money transfer transaction. So again why do they do this and yet claim they do not hold anyone's cash. You tell me, and they still do it to me. The last transaction was held for 2 months why? no answer from them as to why? Just the lame old excuse again "We Dont Hold Anyone's Money" strange that but yet they do. It took a call from my bank to get the last lot released. Fed up with them and Ebay, nothing but thieves, both of them.

Reply

incognito 6th of August

to: Erika Garnica And thats why 1000s others leave paypal, all feed up and biored witht their rules for some and other rules for others Even if you defend paypal, we have another side of views darlordau is right

Reply

Ayman Badr 6th of August

I have a very important question. You all know that if you are doing Dropshipping then you have to pay for the item so the Dropshipper can ship the item and give you the tracking Number. So how in the world i can pay for the item if my payment is on hold from Paypal?!!! It is extremely Difficult to make this kind of business "Dropshipping" on ebay. I would like you to answer my question and tell me how in the world i can pay for the item if my payment is on hold from Paypal?

Reply

Onelove 6th of August

The truth of the matter is both companies belong to one single body- Ebay bought Paypal over some years back. The fact still remains that if there is no other company to spring up to compete with ebay, I am sure that they will forever continue to monopolize the whole economy even to the international level. Ebay/Paypal are just serious pain to sellers. They would hold fund for 6 months and would suspend you for no reason at all, despite that you provide them with hard copies of document requested to restore your account. They would not give you a concrete excuse for suspending a seller. Many a time that I have read about them in the news paper when people complained bitterly about EBAY/PAYPAL useless company. They are thieves without guns! I am working with some officials to really look into this matter, I should think by time people begin to read bad reports about ebay and Paypal, I should think they would need to amend their crooked ways. Genuine sellers with nothing to hide has been victims of suspension and total account suspension with no reason at all. THEY ARE USELESS AND MONOPOLISTIC IN NATURE. One day the bubble will burst!

Reply

Ishtiaq Nasim 6th of August

Another suggestion to avoid payment hold. This sometimes work but other times may not. In my auctions I write at the end: " Pls don't pay if you win this item till you have received an invoice from us. This step is for us to keep all our sales record uptodate. your cooperation in this regard will be appreciated" . As soon as I'm notified of the winner I promptly send the winner paypal(not ebay invoice) invoice and if the winner honors this invoice my payment gets credited right away. I've tried this 3/4 times and only once paypal placed a hold. So I'm not sure if the winner just paid or paid based on the invoice. Last week I'd a winner who was sent paypal invoice($400+) and I got credited. Next day I sent second chance offers( one was for $200). this one accepted and paid right away before I'd a chance to send him the invoice. this payment is being held up. Other thing: Four times before I've asked paypal for early release of the funds citing that the item has been delivered and 3 days have passed the buyers have not responded either to emails to confirm receipts or have not left +ve feed back. Twice they released the funds next day after I send them the email and twice they rejected. Mysterious are the ways of paypal and ebay. Even though I'm sick of these behemoths I've no choice but to grin and bear because I do make some money using them.

Reply

Scotty D 6th of August

I have a web based advertising program where merchants get their link on our website. Paypal continued to hold large sums of my transactions even though clearly merchants were getting what they paid for. I got so fed up I cancelled and now have a merchant account with Suntrust Bank. This penalizes new businesses that need sustained cash flow.

Reply

wreckdiver 6th of August

What you do with you account can also have adverse effects. I recently sold an item, and was in PayPal using the Google web browser. I tried to print a shipping label, forgetting that the plug in does not work properly in the Google web browser. I opened internet explorer, logged on and printed out my label with no issues. I did not log out from the Google browser first and apparently this triggered something in their system (presumably multiple log-ons at the same time). The account was frozen for about a week and I could do nothing..., buy, sell, transfer money... nothing. When I asked them what I did to make this happen, they threatened to cancel my account, saying that information was proprietary and they did not have to release it ( I was just trying to avoid making the same mistake again). I've also had others tell me that they have received payment from someone else for money owed for a non-eBay item and that was held for nearly a month. I can understand the policy for protecting eBay buyers, but what about non-eBay transactions, especially a strictly cash transaction with no goods involved.

Reply

6th of August

Hello Erika, My comment doesnt really have much to do with Paypal but with Ebay. I was wondering if you could contact me? I see that comment that "darklordau" left is also upset with Ebay. As am I. I see that you are a former eBay Top Seller Account Manager and would like to ask you a few questions. I am also a Top Rated Powerseller with 100% positive feedback and I am aslo fed up with Ebay. Please let me know how I can contact you. Thank You

Reply

Cecil Savage 6th of August

This article is written completely from Pay Pals view. It's really nothing that most of us don't already know and certainly have experienced. PayPal put me out of business the first time I tried to get into ecommerce with EBAY. I had very little money and no product to sell so I was forced into drop-shipping. I needed the money from my sales to buy my product and ship it to customers. It was that simple. But of course PayPal hates drop-shipping even though I could not get anybody at PayPal to admit that. Bottom line is I ended up over with over $100 being held by PayPal for the mentioned 21 days which caused bad feedback scores and you know the rest. I did make good on my payments but never used PayPal again. I got my own website and learned a lot by reading the forums on Salehoo and built my own business using a merchant account and Google Checkout. I avoid EBAY and PayPal and don't miss either.

Reply

FrankMan 6th of August

I have been working with PayPal for several years - the vast majority of my experiences have been very positive. About 2 and half months ago, my entire account was put on hold due to 'percieved' un-authorized activity by outsiders. I have been unable to pay others or receive payments. I cannot get my money returned to me unless I provide PayPal more information than I wish to provide. Any and all contact by me has been ignored and not acknowledged. What outsiders? What activity? Why no explanations? I will say this, they have large cajones. I complained to the local D.A. and they have ignored his inquiries. They sent him a copy of their TOS and other nonsense, claimed they had my agreement and consent, and, essentially said it was none of his business due to privacy issues. But this is what makes capitalism so great. Others will see opportunity due to PayPal's customer experience of unabashed arrogance and competitors will rise. I watch for this day and will leave the PayPal community once and for all the first chance I get. In the mean time, I use forums such as this to share my experiences and hopefully sway public opinion.

Reply

Ben Wright 6th of August

Without even reading the full article, I can tell you now that what you are saying about if you're an honest seller, there is nothing to worry about having ebay placing your payments on hold, because I personally was one of the most honest sellers to ever operate on ebay. I even went as far as taking losses just to keep customers happy, but time a time again, payments were placed on hold even though ebay couldn't find a single slither of evidence that a customer was unhappy with my service or didn't receive exactly what they paid for and in most case more, until I sold to a powerseller, who goes by the name: royalcarriagelv, whom seller exotic cars like Ferrari, Benz and so on. I sold him a $450 phone, he found it a little cheaper somewhere else and wanted his money back, which I agreed to. He promised to not give me negative feedback in return of a refund, which I was going to give him anyway, but he gave me a negative feedback anyway so I refused to give him a refund, that's when paypal and ebay took over a year to settle our dispute, because they knew I was in the right, but he was paying them much more profits from each car sale than I was with each phone sale so obviously I knew whom side they would take at the end, which took much longer than normal to settle, hoping time would discourage me. To make a long story short. Ebay took the refund out my checking account and gave it to the customer, the customer kept the phone, ebay still demanded final value fees, closed my account until I paid, which I never did, and their was nothing I could do about it, not even give this customer a negative feedback, which is why this whole thing took place the way it did in the first place, not to even mention this customer promising to maliciously sabotage my account, to get his way, I still have all the emails to prove it, just in case. I still believe, on ebay, the powerseller is king and ebay will do anything in their power to keep them happy even if it's down right corrupt. So please do even try to explain a strategy to keep ebay from doing what it wants to do for its own benefit. PS: I didn't proof read this so there may be some spelling and phrasing mistakes My Profile on ebay was: inlikeben and now I'm going to Amazon.com, it seems just a huge a ebay if not larger or soon will be.

Reply

Ben Wright 6th of August

Your company must be working with ebay for you to make a lot of the statement that I read here.

Reply

Jai 6th of August

I've had a couple of transactions held by PayPal. My only frustration and criticism with this policy is that it only becomes an issue when a seller relies on the customers' payment through PP in order to post out the item(s). As this PP policy is rigged so that fee will only be released when customer has left seller feedback and customer will only leave feedback when they receive item, etc - this is the problematic circle. To benefit from this policy if you rely on the buyers' payment (with postage fee built in) to mail out the item - and, should it hit you - you only need a separate supply of 'posting' finance in a physical bank / elsewhere in order to mail out the goods. I put this query to PP only days ago - on incorporating my store with acting as agent / distributor for an overseas high end guitar range. PayPal told me straight (and, my apologies if some of it echoes the above article): There is always a possibility that the item you are selling on eBay may be held or not. Unless the payment is processed by the buyer, that is the only time that the system will determine whether the payment will be placed on hold until it meets either of the criteria to release the funds on your account. For some sellers, PayPal will hold funds while we ensure that there are no disputes or chargebacks made against the seller’s account. When sellers don’t have the funds available to cover disputes and chargebacks made to their accounts, the associated cost is significant. Managing this cost is our responsibility – it’s also a benefit to sellers because it enables PayPal to keep service costs for all our members lower than other online payment providers. In deciding whether to apply payment holds, PayPal reviews many factors including: 1. Account tenure 2. Transaction activity 3. Business type 4. Past customer disputes 5. Overall customer satisfaction Holds are typically placed on: 1. New sellers or sellers who have limited selling activity - until they build up a history of successful transactions 2. Merchants selling in higher-risk categories like electronics or tickets, where we see higher levels of chargebacks and disputes 3. Sellers who have performance issues, or a high rate of buyer dissatisfaction or disputes... I hope this helps / contributes to things. What a mad, crazy world trading is.

Reply

Nelson Ribeiro 6th of August

Paypal risk management is populated by people with no brains and no good will, it's all "because I said so". They killed my business which was legit, registered with Florida State and even after showing them that it was a legit business they still held my operative funds in reserve for more than 3 months leaving me and buyers with a bad taste in the mouth. After 2 months trying to deal with them, I gave up with a loss of over $18,000.00 and a lot of disputes from buyers. Advise: DO NOT USE PAYPAL, AT SOME POINT YOU WILL REGRET IT DEARLY.

Reply

GottaWearShades 6th of August

2 comments. First, the obvious answer about holds is, don't stop calling people until you find someone who will work with you. This can be harder than you think, paypal suddenly decided that they had to verify my account information, ignored the "successful" online verification (which looks disturbingly like a pfishing scam) and every call after that dropped me straight to a recorded message that told me that something was being mailed, I needed to be patient and wait for 7-10 days. What paypal was holding was my payment to ebay, which they'd just successfully collected from my bank, so I called ebay and told them that. They got me to the right person at paypal who immediately released the hold WITHOUT ASKING FOR ANYTHING. Second, while I agree that using paypal shipping is the best answer (it hands ebay a tracking number and delivery confirmation for only $0.19 or Free depending on the service), the service is TERRIBLE. I end up voiding as many labels as I can actually get printed, because the actual label-printing service is rarely available. You get 6 or 7 failures (error message) and then a different message that says you've exceeded the maximum number of reprints (never getting it to print even once) and you have to void the label and start over. Voiding the label will get you a refund in approximately 2 weeks, while you pay again for postage. Getting one label to finally print means nothing about the rest (generally I can get two before the service craps out again for hours). The annoyance adds up fast with lots of items, and the cost adds up fast with expensive items. However you ship, don't ever ship without a tracking number. No matter how high the buyer's feedback rating is. Getting a refund for an untracked package is free money for them, and a serious hassle for you. Not saying that ebay and paypal won't just pay them even with a tracking number, but without one you're just fresh meat on the internet.

Reply

milwil5 6th of August

I've had some pretty bad experiences with PayPal as well. I went into my account to do a simple address change. It wouldn't go through so I called for assistance. I was hung up on THREE TIMES!!! Each time it was after I asked to speak to a supervisor because the person on the phone could not help. I used to really like PayPal before but now.....not so much. I ended up completely closing my account with them.

Reply

Sassysam 6th of August

PayPal has been nothing but nightmare to me. I live outside of the US and signed up as an affiliate to sell clothing online. I was told that I would need a PayPal account and so I set about trying to open one. After several tries I was utterly confused. I called PayPal and asked very direct and specific questions. Can I have a business account if I live in _____ country? The agent said yes. Can you help me to set it up? She said I had to do it myself. Eventually I got it and then I received my first payment. I paid my supplier and they shipped the items directly to the customer. Then PayPal reversed the payment. Gave back the customer the money and then told me that I owe them over $100 and Put my account on hold. I went through everything and cleared the account. I started again. Then I received another payment over $1,000. They put my account on hold again. Then after many frustrated conversations with them then I was told that I cannot have a business account in the country i live. Now, I can only advertise in my country and I have to collect money by hand from my customers. -- And I cut this story short. -- What a nightmare.

Reply

Pissed off seller since 2004 6th of August

Yes they give no reason at all to hold money and it does not even have to be related to ebay it can be somebody just sending you money for another reason. Paypal is not safe or secure and they do hold money up to 180 days? They don't have to right to abuse your business they are suppose to be providing a service and they stink at it! The best thing to do is have you own merchant account and stop dealing with these thief's

Reply

Tracy 6th of August

Thank you for this i am very weary about getting an account with paypal now for my website. At the moment all transactions are processed manually through customer and i with no inbetween. i am unsure if i should go ahead with starting up a paypal account or leaving it the way things are, maybe someone else could shed me some light on this please?

Reply

anthony 6th of August

I lost $700 because of a fraudulent claim made by the buyer's credit card bank. I was paid by credit card which paypal accepted and notified me it was okay to send the item which I did. The buyer then told his bank that his credit card had been used without his approval and that his signature had been forged. A stop payment was then issued by the bank to paypal which they did immediately. Various negotiations were made between myself and paypal, but in the end a ruling was made in favour of the bank and the $700 was returned to them. The buyer get's his free item and I have to pay for what I knew was a fraud but was powerless to do anything about it. All this was after Paypal had authorised me to ship to the buyer. DON'T TRUST PAYPAL they are not on the seller's side and neither is Ebay who will allow negative comments by the buyer but none by the seller.

Reply

mohamed 8th of August

hi, helpful information . fortunately i did not face that bad situation until now . i do dropship business on ebay , what i do exactly as you mentioned , i sent the track number to " paypal" , once i see " on courrier website ' my customer received his item i contact him to get the key to release my payment i mean " positive feedback " - another comment to " ayman badr" . forget to do dropship business on ebay without some investment . thanks for salehoo team work

Reply

David peter 8th of August

hi, helpful information . fortunately i did not face that bad situation until now . i do dropship business on ebay , what i do exactly as you mentioned , i sent the track number to " paypal" , once i see " on courrier website ' my customer received his item i contact him to get the key to release my payment i mean " positive feedback

Reply

Joseph P Lampo 9th of August

I just want to offer a few comments here about our experiences with eBay and PayPal. I was surprised to learn that so many people have had a negative experience with PayPal. We have been active on eBay for over 10 years, and were using PayPal before eBay bought it outright from its original founders. We have never, and I mean NEVER, had a problem with either entity. We have found PayPal to be a boon and a blessing to operate on eBay and, indeed, outside of eBay, too. I have purchased various items over the Internet, using PayPal as a medium of exchange. We buy and sell on eBay with no problems whatsoever. I hope that continues to be the case. I am offering these comments with the hope that others out there who may happen to review this blog, will know that all is not bad with eBay or PayPal. With particular respect to eBay, we think it is one of the, if not the only, best run website on the Web. It is user-friendly and logically functional, and was so from the outset. We hope it will be around for many decades to come! Best of luck to you all.

Reply

Ken A. 9th of August

I've only had 1 freeze placed on monies paid for an item. The question was about the item's condition and ebay/paypal informed me of the buyer's issue and concern just before the freeze. I didn't have an issue with Paypal/ebay doing that as they were trying to protect buyer confidence in their system and I was afforded the ability to plead my case for review. I would have refunded the monies in question without the need by ebay to freeze that portion of the account. The matter got resolved in a timely manner between myself and the buyer. Upon receipt of the item in question I gave ebay the go-ahead to refund the buyer his money which they promptly did. The big surprise from that transaction was getting positive feedback. Usually I don't pursue the buyer re yes or no re feedback. It's voluntary on the buyer's part. I can't help but notice the subliminal sense of condtional approval by some ebay sellers about feedback: I'll give you 5 stars if you give me 5 stars but you the buyer have to give it to me first. I don't do this either. Upon receipt of payment the buyer gets positive feedback from me. I don't hold the prospect of "approval" over his/her head as a condition. So far this non-conditional transaction behavior has worked for me. I have encountered no contentious behaviors from buyers. I also answer all questions from buyers no matter how insane. My best bidders have been the question-mongers. My main peeve with Paypal: UPS and USPS withholding of shipping funding. I don't object to the monies being tied up re "pending" awaiting USPS or UPS to do their monetary sweep periodically to get paid. USPS collects quickly, UPS is a nightmare waiting to happen. UPS will do a weekly sweep of my Paypal account and usually will get all monies owed yet every once in a while there will be 1 or 2 "pendings" they miss. When this happens Paypal releases the "pending" funds that were on hold back into my account. I wish Paypal would just hold the money owed UPS until the next their next weekly fiscal sweep because I'm tired of having to move other accounts around to re-infuse a negative balance if I dare use Paypal to buy something on ebay. Ken A. ,ebay seller since 9/05, 100% feedback, Powerseller also

Reply

POUNDPUPPIES1981 10th of August

POOR PEOPLE TRYING TO SELL SOMETHING REALLY OR DESPARTLY NEEDING THE MONEY AND PEOPLE TRYING TO START AN ONLINE BUSINESS ON DISABILITY AND SSI AREN'T GOING TO BE ABLE TO SHIP WITH OUT THE SHIPPING FEE FROM THE SALE. THEREFORE PAYPAL IS JUST PREVENTING BUYERS FROM GETTING THERE ITEMS AND SELLERS FROM GETTING MONEY THEY REALLY NEED. TRANSACTIONS ARE JUST BEING WRONGLY DRAGGED OUT. THIS CRAP PAYPAL HANDS OUT IS RETARDED. THERE ARE MANY WAYS TO ATTRACT BUYERS WITHOUT SCREWING THE POOR AND INCOVEINENCING BUYERS WHEN THEY BUYER FROM PEOPLE THAT ARE POOR. I'M SICK OF EBAY AND PAYPAL NOT CONSIDERING AND SCREWING THE POOR WHEN THEY CHANGE POLICES AND OR ADD NEW ONES.

Reply
- Charlene Real 15th of March
  
  You are so right! I want to sell a few things on Ebay but I need the money from the Buyer to ship the items. It never use to be like this. I use to sell on Ebay and get my money as soon as the Buyer paid. It's a no win situation for me.
  
  Reply

Duane Melson 10th of August

PayPal's new hold policies apply because they don't care. All they want is your money. This happened to me several times and I ended up getting a credit card to put everything on it when I make a sale to dropship before PayPal release the money to me. But then, I learned the fact that it's extremely important for my business to never ship or dropship anything until the payments clear the bank, not paypal. Remember, the money have to be in the bank, and a person must be charged for that product so you can confirm that it was paid for before you ship it to that person. I don't care what PayPal or eBay wants. I want to work for my own business, not for eBay or PayPal. The best way to do that is to get a real online merchant account and a payment gateway like Authorize. It's much better for you.

Reply

Patricia013 19th of August

Well.....out of all the posts I've read here not ONE of them agrees with the article. Ebay/Paypal management should take note but they are oblivious and so arrogant as to think its their way or the highway. Ebay/Paypal carry the reputation of being the most hated companies on the internet they do not know how to keep their customers!....nuff said.

Reply

Chris lowdon 31st of August

I have a google merchant account and have half set up a paypal account (merchant) this is for ecrater and not ebay. With the google checkout/merchant will i recieve funds before i send goods? What about paypal merchant? I think im going to stay away from paypal if this is the case. I ask as i have started dropshipping and obviously i will need all funds from the buyer before i can purchase the stock or the buyer will never recieve their goods as i would not be able to pay for the items. Paypal sounds complicated you say you have to send a tracking number to the buyer before funds are released but dropshipping you wont be able to get a tracking number until after you have recieved the funds and paid the supplier. I am assuming google will pay me the funds before i send goods and if there is a dispute then they will charge my account? If someone could just clear that up for me as i am listing electronics such as projectors and car audio which are a couple hundered dollers each and cannot cover the initial costs. Thank you guys

Reply

michael 14th of September

ive recently created my own website to offer websites for customers and after reading all the comments Ive now decided to use Paypals invoicing system to send an email invoice to the customer to make payment and this is all I will do with them. I think when i decide to do DROPSHIPPING now I will only use a MERCHANT company to get receive my payments rather than use Paypal or even EBAY. Although as for my website as Im not selling any goods Paypal presumably will be ok. Ive had similar problems in the passed from others and totally agree with these kinds of issues although not exactly experienced these exact problems.

Reply

boandpinky 17th of October

Listen y'all, it doesn't take a rocket scientist to understand why eBay/Pay Pal is doing this. If Pay Pal holds even a paltry 1,000,000 in sales for 21 days, how much extra interest does eBay/Pay Pal earn? I rest my case!

Reply

Royal Carriage 18th of October

In response to Mr Ben Wright's comment in august 2010 about his experience with paypal. Nothing can be further from the truth. Let's examnine the evidence, he claims to be the most honest seller on ebay but he was in the business of selling illegal countfeit cell phones! Can we see the irony here? Second, he claim to be a victim of paytpal hold when when he was the one who cannot answer my repeated request for tracking number and i gave him twice the promised time to come up with the phone and it was one excuse after another. His most creative and rediculous one was he did not want to upset the clerk in china for asking her to work too hard to see where the phone is. In the meantime, the phone which was a gift for my wife as xmas gift was no where and apparently my wife's emotional state was not as important as the clerk in china who apparently was so stressed by me asking for a tracking number. His lack of common sense was astounding. Paypal asked for the same info and when he cannot supply a simple thing like a tracking number or proof of delivery to anyone, they charged him back which is how it is suppose to be, in this particular case, paypal worked the way it is suppose to protect buyer from the MOST HONEST COUNTERFEIT SELLER ! His further comment about people who did not agree with him msut be working for ebay or paypal is further evidence of his delussional claims and business ethics. It is funny that all my customer spending huge sums of money buying exotic cars never ahve any issues nor did the hundreds of sellers selling methings from camera to rolex watches also have never had a problem with me paying and finalizing all my transactions in a honest and timely manner. All i can sugest to Mr Wright is seek professional counselling, we are not all out to get you . Also another fiction by him is that there was never a hold, he got the funds and when he cannot proof he did anything, they charged him back.....that is not a hold, that is a simple charge back. Hold is when you never got the funds, which os not what he claims , but then again we are talking to the most honest seller who just happen to be jkicked off ebay and paypal and who also ahppen to be selling illegal counterfeit phones, why would we doubt his words? LMAO

Reply

shaunh 30th of December

Erika i get the feeling that paypal has paid you to stick up for them! I love the fact that their is protection for the buyer but ebay has that protection already! I am a buyer and a seller! When i paid for an item and never received it EBAY paid me not paypal!!! Paypal is stealing if temporary but they definitely don't have a right to take what is mine for 21 days! It messes with the flow of my business and prevent me from being a drop-shipper! Please don't agree with internet thiefs! A good seller service provide will not only meet the needs of the buyer but also the seller! I wouldn't be suprised if people start suing paypal and they go bankrupt like that other one in 2007! I will be looking for other alternatives to paypal!

Reply

shaunh 30th of December

you can't just make stuff up! we live in a civilized technology age, we can't return to barbaric ways of bullying sellers by made-up rules that are practical nor sensible!

Reply

Rafi 24th of January

Very good article, your absolutely right about Pay pal, they really dont want to hold payment as long the supplier can ship and customer can receive and be happy. Thanks http://www.eurostarjewelry.com "Dropship Silver Jewelry, Gemstone and Body Jewelry"

Reply
- Robert 29th of August
  
  Yes they do, if they didn't they wouldn't hold it in the first place and they surely wouldn't created a 21 day hold policy. The thing with them is that at this point they are big enough to screw the seller and get away with it. Stripe, Wave, Amazon, google assume just as much risk and their policies are nowhere near this disadvantages or vague to the seller. Amazon clearly states upfront what their reserve is for new sellers. Google does the same. Stripe clearly tells you that you are either in the 7 day or 2 days deposit tier. For merchants who use them as a secondary processor to our main merchant account its almost laughable. You want me to ship items all over the country with no guarantee that we are going to be paid for them. In the event of a fraudulent buyer, when do we get paid? A month? 2 Months? 6 months as per their policy? The next time you order an Iphone from the Apple Store tell them to ship the phone to your house and if you like it you'll pay them in 21 days. See how that goes over. I think a lot of people who acdept this policy are people who've never had an actual merchant account and don't know what "industry standard" actually is. Merchant accounts issued by banks can't hold your money that long because they have to follow federal rules. Paypal doesn't because they are not a bank. They operate in a gray area. They are like the payday loan companies of the payment industry. When you see a paypal hold you notice they only hold your portion. They take their cut out as opposed to holding the entire payment until its cleared. Their cash flow is not tied up. That should be the first red flag right there.
  
  Reply

Sheila Nelson 27th of January

I am a new member of SaleHoo. All your comments and ideas are so much helpful for the new starter. I like all the article. I am now planning to start my business on February, anyone who can give me some ideas of reliable merchant account company who is dealing with all the cards and can be is affordable for the new starter? All your recommendation and suggestion will be much appreciated. Thank you....

Reply

Irene Vallejo 28th of January

Hi twinstar888, Here's a link with useful information regarding merchant accounts http://www.salehoo.com/education/business-setup/how-to-set-up-an-online-store-2 If you need further help, do send us a message at http://www.salehoo.com/support Welcome to SaleHoo! :)

Reply

tuckerstuff 13th of May

PayPal & eBay. A dream turned into a nightmare. As eBay and PayPal continue to build The Fourth Reich online, If you use it in this day and age, you will regret it; if not now, in time you will. If the DSR's are so darn important, eBay should REQUIRE feedback to be left from purchasers. I, too, was a victim of the drop shipping payment holds. I couldn't order the products for the customer until the funds were released. Because they are an online payment service, and NOT an online payment gateway, they are not required to follow or abide by FDIC banking regulations, so they operate as they please, punishing the little guys and pampering the powersellers and corporate conglomerates. Also, I got an email message saying my account has been frozen until I can provide some more information about one of my sales, and an ID# was provided. I called them on the phone several times about this trying to find out what information from which sale they needed, but they say they don't know what I'm talking about as nothing is showing on their end, but my account has been permanently frozen with almost $100 still there that I cannot access for over six months, but yet I didn't do anything wrong. I asked them why, but they couldn't give me an answer other than it's something the "Back Office Execs" decided on a whim. I asked to speak with one of them, but I got a shocking, "Oh, no, they are unavailable for customer support issues such as this, and am left dealing with someone who just wastes my time by telling me there's nothing they can do about it. If you do use drop shipping services, be very wary, as you could be held accountable for mistakes made by your drop ship suppliers. One guy filed an "item not received" dispute after I provided him with the tracking number and it was showing up as being on its way. Guess what? He received the item, and eBay issued a refund without my knowledge or consent. I got an email saying, "we have refunded the buyer for this dispute and you now owe eBay for the amount refunded". I never got the item back, case was automatically closed, and I still had to pay the final sale value fee. Also, I sold an Autographed Football to a lady that complained, saying it was flat and would not hold air. She sent it back for a full refund, which I was happy to give. When I received the ball back, it was not flat, and holds air just fine. I tried to inform eBay of this and offered to pay the shipping to send the item back as the ball is fine and the lady was not honest about the condition in which she received it, but case closed and refund given, and final sale value fees paid. Bastards. I sold about 200 items last year, and only got feedback for 117, and only two were negative, but it was enough to drop my feedback percentage to about 98.6%, after which eBay and PayPal feel you are not worth their time, and punish you by putting your listings in last place on search results. I went through the same thing with PayPal. I haven't won a dispute yet, even though I provided all the correct documentation, gave refunds to buyers who received the items. Some items were never even sent back to me, and I was still forced to give refunds. So, after a year of dealing with them, and losing money instead of making money, I signed up for Authorize.net because eBay told me that was one of the options available for accepting payments for purchases, but when I tried to link it up to my listings, eBay told me I had to be a Webmaster to do it; either that or sign up for a Payflow account (which is also controlled by PayPal) for an additional $175 setup fee and a monthly fee. Forget it.With all their constant changes in listing restrictions, policy changes, and the latest and greatest "PayPal" takeover, they've made it nearly impossible to sell anything there, when it used to be the place to buy and sell anything. All this combined with a blatant lack of customer support and service, it's no wonder they reported a quarterly loss for the first time since they started operations. They have also lost more than 3 million eBay users. With over 40 million users, this may not seem like much, but most of those were Power Sellers with big time items and stores. I have been in communication with many of them, and they have completely closed their stores, removed their items, and closed their accounts due to the constant increases in fees, policy changes, and lack of technical support. I am starting to see a lot of them at www.bonanza.com, of which I am also a member, but the newest, latest, and greatest site I have found is www.addoway.com. Find me there at this web address: www.addoway.com/tuckerstuff. It is what eBay used to be and has made buying and selling online fun again. It is the friendliest community of buyers and sellers that I have yet to find anywhere online. They have a Facebook Meet n Greet Fan Page where you can post your store links, Twitter profile link, and they are more than happy to share and Tweet your listings for you. Any technical questions I posted there have been answered sometimes within 5 minutes after posting. Compared to eBay, it is a joy and a pleasure to post a question and get a kind, friendly answer without sorting through 50 pages of "Help" menus and "FAQ" pages only to discover there is no answer for your question. It is amazing and impressive, with one page user-friendly listing creation, free to list, free if it sells! If Addoway keeps going like this, eBay may have to rethink it's strategies. In a desperate attempt to get people back, they are now offering up to 50 "Free to list Auction Style" listings every month, but you still have to pay the final sale transaction fee of 10%. With the PayPal takeover, though, this has made it impossible for me personally. I hate PayPal and their restrictions, as well, and I have my own Shopping Cart service to process credit cards online, but eBay says I have to be a Webmaster in order to link it up to my listings. Either that, or sign up for a PayFlow account, which is and affiliation of PayPal, with a $175 setup fee and another monthly charge on top of that. Forget you, eBay, there's some new players in town, and they are better than ever as more and more people start realizing that eBay is no longer number 1, and is falling fast. I just hope I am around to see them totally collapse. They've made it impossible for the small time sellers, and is more of a Corporate Conglomerate nowadays more than anything. Online sellers unite! Bonanza.com and Addoway.com are the next rising stars in online selling, so join today and enjoy hassle and headache free listing, buying, and selling. www.bonanza.com/booths/tuckerstuff www.addoway.com/tuckerstuff www.tuckerstuff.ecrater.com My shops are the one-stop shop for all your Hawaiian and tropical needs, from quality Hawaiian print clothing for men, women, and adorable baby girls Hawaiian Capri sets, Hawaiian Essential Oils, Bath, Body, and Beauty products, Tropical Themed Restaurant&Tiki; Bar Supplies, Hawaiian Fabric in Cotton or Rayon available in 5 Yard cuts, Kahala Brand Shorts, Shakabera, Shakatime Hawaii, Maui Diver's Jewelry, and other major Hawaiian brands are now being featured. A combination of Novelty collectibles, household items, and quality merchandise. Open your own store today, and import all your listings and feedback with the "one-click" importer link at both Addoway and Bonanza. They both allow you to accept multiple forms of payment, from checks, money orders, and cashiers checks, to PayPal and Google Checkout, and you don't have to be a webmaster to do it! Sign up today and you will be glad you did. They do not get the net traffic that eBay does, so items may move a little slower, but I think that will change over time as more and more people realize what a "screw job" eBay has become and continue to search for alternatives. You can't get much better than either of these two sites. I love them both and am happy to be a member in the friendliest communities of buyers and sellers on the net. If you don't believe it, just try it and see for yourself. You will not be disappointed.

Reply

Sandra Lewis 26th of May

I sell on Bonanza, just started. Paypal is my form of payment so this is really bad news for me. I can't believe they hold payments. What other payment options are there?

Reply

Irene Vallejo 27th of May

@sandysbargain: They accept Google Checkout and Money Order - http://www.bonanza.com/site_help/booths_setup

Reply

john dale 15th of July

EBay and Paypal don't want small sellers on eBay. And if you are going to sell on eBay they are going to make it a steep learning curve. Donahue stated at one point that eBay looked like a big garage sale. EBay wants to become Amazon. If you're going to sell on eBay be prepared to except a harsh environment with varying rules and policies. EBay is a giant arbitrary corporation with different rules for different sellers based on ones size, money and their ever changing whims. The key is to not invest a lot in them. Only use them to sell things to make a quick buck with as little time and effort as possible because for every hour you put into their platform, a simple click from some moron CS person can end your selling on eBay. It's a jungle.

Reply

maine 16th of July

Very Frustraing when the parent company ( eBay) allows one thing (dropshipping or pre-sale orders) on their website but thier child-subsidiary (Paypal) does not allow such activity. So you have one issue that will bring huge profits for a business but also may wreck that same business when a company holds your money up to 21 day(s) and have no way to pay for the item to ship it and your customer is breathing down you neck for the item that they ordered. What does a person do when first starting out in a high profit category and keeping their carry cost down to offer the best price the right hand says you can do one thing but going to be punished later on when a company decides to suspend your account and hold it longer than 21 days that ends up to 180 day(s)\6 mos. Either eBay eliminates the allowance of drop shipping or tell paypal to accept the practice. Another thing, when Paypal requests information, like name of suppliers like I did in my case ( name, address, phone numbers, etc.) and they come back verified, they need to accept such information and release the funds. Be a different story if I did not provide the info. and\or could not be verified and I just ran but did the right thing and gave my sources but still got punished and they still closed my account.

Reply

Vaison-la-romaine 14th of September

I never was a seller and never will be one in view of all the complexity of the accounting necessary, and what I read here is an additional desincentive. As to regards the holding of funds I noticed the following: whenever I would transfer funds from my bank account to Paypal, it would take 5 to 7 days for my funds to be entered ito my Paypal account and thus be available to me. Yet, whenever I had run out of funds in my Paypal reserve and would pay for a purchase, via Paypal, directly from my bank account, that payment was done instantly to the buyer. I figured that any money I was transferring from my bank account to Paypal was held for Paypal's benefit (they make interest on it). I have decided not to replenish my Paypal account any more and simply use then to pay directly from my Bank account. I believe all this holding of funds is a way to make interest out of the "frozen" or "highjacked" millions of dollars due to sellers and buyers who wish to refill their account, it's like an invisible fee or tax. I use their services but I do not trust them an inch. And, Oh, all the shill bidding which is going on in the last hour or so of auctions! I have also found other auctions which I use as much as possible.

Reply

Sydney 15th of September

Hey does anyone know what I can do to get my payment hold released? I've looked everywhere. I haven't sold anything in ages and have nothing pending. I literally transferred some money into PayPal from my bank account so I could buy something off of eBay and now there is a hold and I can't get it anymore. It's because of this crap that I refuse to use eBay and PayPal anymore but I found something I really wanted a good deal on and thought I'd make an exception. Bad idea. Do I just have to wait it out.??? Thanks, I'd appreciate any feedback.

Reply

Manny 25th of September

I have a 100% rating on eBay and always paid my bills on time via Paypal. Yet I got a notice that they were going to put a hold on my payments. Payments for what? Haven't used it for a while and anyway the last ones I tried to sell didn't sell. Very confused.

Reply

Irene Vallejo 25th of September

@Manny: Just confirm with eBay if the messages were for you and request for more information. :)

Reply

JOE 14th of October

eBay even has a moderator who reads our post and determines weather to allow it to be viewed or not ? TOTAL CONTROL.....Have you ever talked to eBay`s rep`s ? It is like talking to a mindless robot who only say`s what they are programmed ( they are all stepford ) .....It is useless ...I can not believe what they are getting away with and no one is challenging them legally ?

Reply

Tarren 27th of October

Here is another issue with both companies, if eBay belongs to PayPal, why the double charging? I hope a huge court case will be brought against this company to teach them a lesson. It just shows you don't need weapons to be a robber or a thief, this is robbery of the highest but unsophisticated kind. I made a sale for 159 pounds, ebay charged me 16 pounds for final value fee, not to mention 3 pounds or so for the initial listing and when the buyer made a payment va paypal and the funds dropped into paypal about 9 pounds was missing but yet the funds was on hold till the buyer left feedback but to add more insult when I made a payment once the funds cleared to another paypal account another few pounds went missing... thiefs I really cant wait to see a damaging court case against them.

Reply

Mary 30th of November

This is funny... this is my opinion, like it or don't like it - I still need to say it. eBay and PayPal deals with money whether seller or buyer; sending or receiving money... so don't be lazy and allow yourself to be ignorant to what's going on. If your money matters so much to you, then why leave it in the hands of someone/something without knowing what will happen to it? Ignorance is not always bliss - take the time to protect yourself by knowing how this people work with your money. It will not do you any harm to do so, in fact allow you to know how to use it to your advantage. Doesn't matter if its online or going to an actual store. So if you go into something that involves YOUR money and YOUR livelihood, without knowing how it works then for sure you are going to be screwed over - whether by a big company or small time con-artists on the net. Let's face it, there are real risks when trading and if you don't protect yourself - how can you expect others to protect you? @Vaison-la-romaine - when you add funds from your bank it will take time to clear but there is a payment method on PP where (if you have bank and credit or debit card on there) they will pay for you so the seller gets the money right away but the time it takes to clear from your bank is still the same. Comes in handy for me when I wanna buy something and its still a day or two away from pay day.

Reply

Web Design Ipswich 8th of December

Paypal holds are a pain, but you must prepare for them as they are not going to get any better. In fact, with increased risk in world markets, I expect them to push for 10% on every account and maybe try and hold certain payments for 30 days.

Reply
- Daniel Fendley 16th of February
  
  CONFORM AND GET BACK IN LINE LITTLE SHEEPLE...I don't think so, this is how Paypal and other rogue companies get away with this kind of customer treatment.
  
  Reply

Lloyd 3rd of January

I don't sell on eBay, and my payments are for services but PayPal still holds my payments and I'm stuck waiting 21 days because I can't provide tracking on a service. When I called Paypal my only option was to have my customers send an email to Paypal saying they are satisfied then wait 3 days. LOL I am NOT asking my customers to do that. Paypal is ridiculous and once I get my payments all cleared I'm closing my account and sticking with Google Checkout only.

Reply
- Daniel Fendley 16th of February
  
  I have learned the hard way just what you explained. Paypal is a disgusting organization.
  
  Reply