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February 12, 2007

The Paypal Saga

Paypal has become indispensable as a way of transferring money between unconnected parties. When the web first become a means to shop, the traditional methods of payments didn't quite meet the demands of this new frontier. Cheques and money orders worked, but they were slow and difficult to deal with, increasingly difficult as you try to make payments in other countries. Credit cards are great, the payment can be made online in real-time and their usage is valid in other countries and currencies. But the terms of service meant that smaller shops and individuals can't accept credit cards. Along comes Paypal (or X.com as it was known). Their idea, store money in an account with them that you can transfer in from a bank account or credit card. You can then send money from this account to another party who can transfer the money to someone else or back to their bank account. I sure wasn't eager to get my money locked into an account with an unknown party. But after a while, Paypal grew successful and I tried it, instantly transferring money from my credit card to Paypal and then to another party. Paypal is basically the only way to transfer money between individuals over the internet now. The service is invaluable, simple and reliable. The fees are also fairly reasonable, although sneaking up. The big issue is the edge cases. Customer service is near useless. Customer service phone numbers are hard to find, and individuals are discouraged from calling toll free. As far as I can tell, reps that answer the phones cannot make any changes to a transaction or account. The end result is that their answer always becomes, email customer service. Emailing customer service is a long trying ordeal. You aren't likely to get an answer to any question in any response, you also aren't likely to get a timely response. You're likely to go in circles, getting the same answers and asking the same questions over and over again. Normally you wouldn't need to use customer service, even a dispute over a payment can be handled automatically on the web interface. In two cases where I received products that were not as described and could not resolve the issue with sellers, I lodged complaints with Paypal. Paypal resolved neither case. The protection system is easily foiled, in one case it was obvious a tracking number of any kind was sufficient to prove that an item was received. It didn't really matter where the tracking number indicated the package was headed or if it was delivered. They really don't care if you don't get what you paid for. They care a little more if you don't get anything. In the latest case, I didn't receive an item, didn't receive any email responses from the seller and filled a claim with Paypal. As I neared the deadline for my Paypal dispute expiring, I finally received an item, but it wasn't what I ordered and I couldn't even use it. To avoid the dispute expiring I proceeded to the next step, filled a claim and indicated that I received something, but not the right thing. Shortly there after, Paypal awarded a decision in my favor and refunded the payment. I contacted the seller to return the item I received. Weeks later, still having heard nothing from the seller, Paypal reversed its decision. They sent me a notice that the decision was reversed and that I needed to "provide business information" or my account would be limited. I was confused and emailed customer service, I'm not a business, I couldn't even provide business information when I tried. Given the round and round treatment by customer service my account gets locked down because I haven't been able to meet their requirements. Limited access means I can't make or receive payments and can only fund my account via bank account. I guess the account state is generic, it doesn't make sense to limit and prevent money from flowing into my account to make the payment. During this period, attempts at receiving funds and making payments result in odd error messages that are completely unrelated to the limited access state of my account. Eventually I'm sick of email circles and dig around for the customer service email and call when they are open during normal business hours. The long summary is, the decision to rule in my favor in the dispute was a mistake, they reversed it and they needed me to refund the money and I would have to email once I did. Providing business information had nothing to do with it and made no sense since I had a personal account. After complying with the now clear request, I dutifully sent off the email using the exact phrasing the customer service rep said and including all the required and pertinent information. A while later I get a response in something resembling english stating they could not comply with my request. I noticed that my account was unlocked at this point. It has been a while and I have no idea whats going on with this, its just in limbo, so I'll leave it there, I'm not going to continue to fight with them to provide a refund they refused to accept.


If you ever intend to be a seller of things on EBay, I recommend you call up PayPal and ask to "opt-out of PayPal Buyer Protection". Their FAQ discusses it here -- http://tinyurl.com/24jhn7

By opting out of Paypal's protections, buyers won't be able to put a freeze on your Paypal account as easily. (Note that Ebay still offers buyers some protections, but they are not associated with your Paypal account.)

Paypal's poor customer service is also why I always leave my Paypal account unfunded and only transfer in money when I need it.

Posted by: bovine at February 18, 2007 04:13 PM

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