There are countless horror stories online about PayPal method of payment, but let’s just be clear for people who think PayPal offers any seller peace of mind:
- If you sell an item and use PayPal for the transaction, and don’t ship with a tracking number, the buyer can just claim they never received the merchandise. PayPal will always side with the buyer and return the funds from your account to theirs.
- If you do use a tracking number, the buyer can lodge a complaint and claim that the item is not as described. Supposedly they are required to return the item to you, but PayPal will just return the funds to their account.
Oh, wait, you say. But what if I immediately withdraw the funds from my account once the buyer has paid me? Then PayPal can’t do anything?
Actually, they can. PayPal will put your account into a negative balance and any funds you add or receive will first go towards that negative amount. If you keep a negative balance for over 30 days, they will send you to collections and close your account. This will eventually appear on your credit report and you will be constantly hounded to repay the negative balance. It doesn’t matter that you were scammed out of your money; you’ll have to dispute the payment and likely take the matter to court to have it resolved.
The other biggest problem is that PayPal is no longer regulated by the FSA. Money sent by the clients is being hold by PayPal for 21 days, which is totally uncomfortable as the postal charges are starting to be out of the pocket expenses. No need to say about the percentage PayPal takes for withdrawing the money.
PayPal is not suitable for online buying and selling. The only reason people use it on eBay is that it’s the only allowed payment choice in many circumstances.
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