In A Word: Paypal

American Scofflaw

This could happen to you. I recently read a very sad story posted on eBay's (EBAY) Paypal discussion board. It's about a fantastic mom (eBay id: seasonalstuff) who sold holiday decorations to earn Xmas money for her family. Unfortunately all her hard work was for nothing because the Paypal Grinch froze her account two weeks before Santa's arrival.

What did this seller do wrong? She sold too many Xmas decorations. Then she was selected for an "account review" by the Paypal Grinch because her sales triggered Paypal's built in false positives. She also refused to give Paypal her SSN and driver's license number out of fear of identify theft on the advice of her attorney. I don't blame her. I wouldn't give Paypal my SSN or license number either because all members' personal information is shared with eBay's entire corporate structure, subcontractors, and God knows who else, which is really scary when you think about it .

Now multiply this situation by thousands of sellers whose funds have been held or charged back for ridiculous reasons such as: 1) false positives; 2) less than 100 feedback; 3) sold too many items; 4) etc. etc. etc. and a pattern begins to emerge.

I doubt if Donahoe ever asked himself the following questions before he added the mandatory use of Paypal to eBay's user agreement.

1. What buyer will tolerate shipping delays due to a seller's funds being held?
2. What seller wants their funds to be held for up to 180 days for no good reason?
3. What seller wants charge backs if they have a no refund policy or when a buyer experiences remorse or neglects to read an item description?

John's mandatory Paypal policy is why Xmas Mom's children may not have Xmas this year. Other sellers are reporting the same thing. I'm sure family members are helping out but it's sad to think eBay's new CEO could not have foreseen this occurring. Perhaps he didn't care.

Here's Xmas Mom's story, in her own words:

Due to circumstances beyond my control I am going to have to cancel some orders and give full refunds and end all listings tonight. Paypal has decided that after over 300 completed transactions and NO problems, they need to freeze my account for a minimum of 21 days. Over the last few months I've sold here on eBay to save money for Christmas, times are tough as many of you know and this is a great way to earn some extra money.

It was explained to me that my account was picked to be reviewed for the simple reason that I have sold a lot of items in the past 30 days. (It is Christmas time and I do sell holiday decorations!) Anyway, this is the only reason, not because of disputes or complaints or anything else. I was told that although my account is verified by my bank account and credit card they want more personal info, my supplier's name and address and tracking numbers for items that were shipped through Paypal!

I was also told that since they are "reviewing" my account it will remain frozen for 21 days, if I do not agree to their terms then my account will be closed and they'll release my balance in 180 days. Here is my problem, I'm already verified. They want a copy of my SS# and drivers license too? That's just asking for identity theft! Supplier info? I already gave it to them 3 times over the phone (all of my supplier purchases were through Paypal). Tracking numbers? I ship through Paypal! They have them! Even if I give them my personal info they are still holding my funds for 21 days!

90 percent of my current balance is for transactions that have already been delivered, days, weeks and months ago! I feel horrible having to cancel these transactions and refund some of you.

The problem is they have frozen my shipping funds and all of my Christmas money. I don't have much cash. I can't pay for the remaining shipping out of pocket without completely ruining Christmas for my kids. I hope you can find it in your hearts to understand. I will be leaving eBay. After I get through this mess I'm moving my inventory over to Amazon (AMZN). Those of you who are sellers too...you may want to consider it too some day. I pray that it doesn't take something like this. I wish everyone the best and I hope your Holidays are wonderful. My apologies again.