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PayPal’s eBay Payment Holding Policy, Why I Agree, and How to Work with it.

I seem to be alone on an island with the idea that I actually agree with PayPal’s new system for new or low volume eBay sellers.  I understand it can be frustrating and especially confusing for new sellers, however, I believe it will solve more problems than it causes and if you work with the system properly everybody can be happy.  I’ll discuss more about the reasons this system has been introduced later.  For now, let’s talk about how we can work with the system, because like it or not, if we’re going to sell on eBay, we have to.

So, we sold our item on eBay and now “evil” PayPal has placed a temporary hold on these funds, however, they’re telling us to go ahead and ship it.  The way this new system works is that our funds will not be released until one of the following things happens:

  • Your buyer leaves positive feedback
  • 3 days pass after delivery confirmation (via tracking number)
  • 21 days have passed

Obviously, we don’t want to wait 21 days for our money.  So how can we ensure that one of the first two things happens in a timely manner so that we can have access to our money as quickly as possible?  Here are a few things to consider.

Handling Feedback

eBay’s Selling Manager application provides an easy way to automate the process of requesting feedback from your buyers.  You can create rules to send a feedback reminder x number of days after shipping it.  Beyond that, you can easily find all of your sold items that need feedback and with just a few clicks you can send out feedback request emails to every one of them with a personal, customized message to each.

If the Selling Manager doesn’t offer enough help you can use the eBay web services API to develop custom tools to completely automate the process of requesting feedback from buyers who have not left any, as well as leaving feedback for your buyers on a set schedule, after they’ve left one for you, or however you’d like to handle it.  You could even create a system that automatically tracked all of your current shipments and sent out reminders on the same day your customer received their item.  Within the reminder, ask them to inspect their item and ensure they’re happy and then please leave a feedback on eBay.

Of course, the key to obtaining a positive feedback quickly is to be honest about what you’re selling and maintain good communication with your buyer throughout the entire process.  If your buyer is truly happy with your service and the product they received they are much more likely to take a few moments and leave you a feedback.

Tracking Numbers – Proof of Delivery

PayPal will also release the funds once three days have passed after proof-of-delivery (tracking number shows delivered).  If you use PayPal’s shipping buttons to print shipping labels for your products then this step is taken care of automatically.  The tracking number is entered into the transaction details and PayPal’s system can easily track it and release the funds accordingly.  This probably covers the majority of you.

Here’s the part PayPal screwed up!  They do plan to fix it, though.

If you are NOT using PayPal’s shipping buttons to print shipping labels it can be a nightmare to maintain the tracking numbers in PayPal so that their system can successfully release funds on time.  Currently, the only way you can get your tracking information into PayPal if it was generated elsewhere is to manually add it.  There is no access to tracking information via PayPal’s web services API!

This problem could indeed be a big one.  I have a couple of clients that use FedEx for shipping so they don’t even have the choice of using PayPal’s shipping features to generate shipping labels.  As such, the only option they have is to employ somebody to enter tracking numbers manually into PayPal’s system.  As such, they typically skip this and focus on obtaining positive feedback from the buyers.

Why is PayPal Doing This?

I think the easiest way to explain why this system has been put into place is to provide an example scenario in which not having this system hurts everybody.  I’ve seen it all too often.  Consider the following:

Buyer purchases a desktop computer on eBay for $1000 from Seller.  Seller states in the auction that the computer has 4 RAM slots.  He also states that he has a 7 day return policy should anything go wrong with the sale.

Buyer pays for the item via PayPal and Seller has the money instantly.  Seller is an honest guy that just needed to get rid of this computer.  He ships the computer and assumes everything will be just fine.  Seller proceeds to spend the $1000 on this month’s bills and his PayPal account is now at $0.

Buyer receives the computer and sees that it only has 2 RAM slots in it.  He had already purchased 4 sticks of RAM and was ready to load up his new machine and is rather upset.  Buyer contacts Seller and explains the situation and also opens a new PayPal dispute claiming the item was not as described.

Seller, again, is an honest guy.  In the PayPal dispute he apologizes for his mistake and agrees that Buyer should get a full refund upon returning his item.  Buyer returns the item and provides proof-of-delivery on the returned merchandise.  PayPal sides with Buyer on the dispute and attempts to refund Buyer.

The problem is that Seller already spent the money.  Seller’s PayPal account now goes into the -$1000 balance.  PayPal has to explain to Buyer that because the Seller has insufficient funds they cannot refund the money even though they sided with Buyer on the dispute.  Buyer, of course, is not happy with this news.

Seller is also not happy because his PayPal account is now -$1000 they’re coming after him for that money.  Seller is struggling to pay it back, though, because he already spent it on his bills.

At this point Buyer is unhappy with PayPal, Seller is unhappy with PayPal, and PayPal is unhappy that they now have 2 people spreading the word on blogs that PayPal is a horrible thing.

That is just one of the many examples I’ve seen that could have been avoided if the Seller would have simply waited until the buyer had received his item and was completely happy BEFORE spending the money.  Buyer would have gotten his refund and Seller could have re-listed the item and sold it again with the correct specifications.

Here’s another scenario to consider:

Scammer has a list of phished eBay and PayPal accounts.  Scammer proceeds to list items on these accounts that are high dollar and quick sellers.  Things like iPhones, laptops, and the likes.  Scammer sells approximately 20 of these items without any intention of ever delivering a single thing to anybody.  Unsuspecting buyers purchase these items and send payment right away.  Scammer then moves the money from these payments between a bunch of different phished accounts to make it hard to track and eventually gets out with cash or might even use the funds to purchase items and have them shipped to “drop-spots” where they will be able to obtain the merchandise.

In such a case, once PayPal discovers this has happened they are forced to freeze ALL ACCOUNTS INVOLVED while they investigate and try to track down all of the money that has now flooded their system with disputes.  Now you’ve got a whole mess of upset customers.

Again, this scam could have been avoided had the funds not been made available until after the buyers actually had their items, which in this case would have been never.  Then, when disputes were filed the funds would still be available to refund to the buyer.

Once more, these are just a couple examples of the many crazy scenarios I’ve seen with buyers and sellers on eBay using PayPal.  By implementing systems like this “Escrow” holding, huge problems can be avoided and if you follow the guidelines of the system it will not be a nuisance.

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48 Responses

  1. Jim Murray says:

    This is where I disagree. I feel eBay/PayPal are painting with a broad brush and they are creating more of a risk then before. I do feel there has to be safeguards in place, but again to penalize highly rated sellers from not getting their dollars instantly defeats the honor/rating system that has been put in place. Let’s face it — all transactions are a risk on the internet whether you’re selling toothpicks or a large ticket electronic item like a computer or camera. Someone that has a 97 to 100% approval rating with a total of 30 (could be 50) or more transactions in selling products should not be effected by this –“payment on hold -ship now” – scam.
    Talk about a scam – all that is happening here is that PayPal is lining their pockets with the added interest they accrue over a possible 21 day period. I have had to call PayPal and remind them that both positive feedback and signed/confirmed delivery had taken place and they state that they will act upon this within a day or so. This is so wrong it hurts. Plus they take their normal fee as well…come on, who is scamming who.

    Here is an example of a potential burn for the seller:
    Seller has listed a vintage analog camera for auction. It sells for $700. Item is purchased by an eBay buyer who has over 60 transactions and a 100% rating. Buyer is from Taiwan which is fine, but wants to ship to another location in the US so a friend can check it out. OK…now the situation gets a little sticky for the seller, a yellow flag pops up in the sellers head and doesn’t like it but feels it’s OK as long as the friend signs for the item, and references in care of the name of the buyer. We all know how items get delivered, many times the driver will not get a signature and just drops off the item, the buyer reports that they never received the camera and gets both their money back from PayPal and also keeps the camera, while the seller is out the camera and the money and then has to fight with the delivery service to get his money back.
    Reference the typical brick and mortar policy; the item doesn’t leave the store until it is paid for…
    In my mind, even though PayPal has been paid for the item, I the seller have not – so I have a product that has left my store unpaid for in realistic terms.
    Again, eBay/PayPal should stick to the rating systems that have been establish so that all the buyers and sellers that have worked so hard to achieve good to excellent ratings don’t get “scammed” by additional greed from PayPal.
    *Penalize the high risk buyers and sellers, not the product category.
    *Hold payments on sellers who have bad ratings and reputations not solid business folks that worked extremely hard to EARN good ratings!
    PayPal is not protecting me the seller here and I will look to find alternatives to get instant payment. This was a great vehicle to exchange money, but not with these new policies. Good things always do come to an end!

    • angelleye says:

      In my experience sellers with a better reputation on eBay do not get hit with held payments nearly as much as new sellers. For example, one client of mine has 50k feedback at 98% and hardly ever has a payment held with this new policy, though it does happen from time-to-time. Another client of mine only has 300 feedback and I’d say 50% or more of their transactions get held. They were frustrated at first, however, after explaining situations like I mentioned in this email and developing solutions for them to work with the system they’re now very pleased with everything overall.

      As for the interest, I’ve heard that argument many times. I don’t know any details of PayPal earning interest on money and all of that. I’m sure they do, but so can you. While that money is in holding it’s still part of your Total Balance, just not your Available Balance. As such, you still earn your interest on it if your account is setup as a Money Market account. I many many clients who like to keep money in PayPal for a week or a month and then move it all the bank on a given day of each week or month. That way they can incur their own interest and by the time they’re ready to move it to the bank most of it’s cleared anyway becuase it’s already been delivered and the buyer is happy.

      You’ve lost me with your example of burning the seller. I don’t care how many feedback and what the percentage of the buyer is. If he’s in a Taiwan asking me to ship to the U.S. and whatever excuses he gives me…simply ship to the address in the PayPal transaction details and make sure the Seller Protection shows that it’s protected. Otherwise, don’t do it. Simple as that. If I get ANY payment that isn’t covered by Seller Protection I simply refund the money and provide information to the buyer about how to verify/confirm their account and fix the problem. If they refuse to comply I sell it to the next guy. I never get “screwed” this way. That’s all for another topic, though, I think.

      You referenced a brick-and-mortar store and how the item doesn’t leave the store until it’s paid for. Well, I completely agree. In this case, though, the buyer doesn’t have his item yet. He hasn’t “left the store” with his item until he has it in his hands, at which point the tracking will show delivered and your funds will be released shortly after. That’s exactly the point I made in my original post. Sellers are spending money before their buyer even has their item. In my eyes, that’s not right, and buyers are left extremely vulnerable in that situation.

  2. Tom says:

    I have no problem with the IDEA of a seller’s hold. In fact, I also think it might be a good thing.

    However, there are some problems with the implementation.

    I found a video game locally that happens to be in high demand right now (and completely out of stock on-line.) So I picked it up on the cheap and put it up for auction. I’d probably make $10 or so, and someone would get a game that they’ve been trying to find with no success. It’s a win-win.

    So it sold right away, but PayPal is holding the money. I’m a good seller, and I’ve never had a chargeback, yet since my feedback is only 75 right now (100% positive), PP held the funds on this video game sale.

    What irks me is that this is something that I could have been warned about AHEAD OF TIME. EBay knew that this was a game, EBay knew my feedback score, and EBay knew that PP would hold the money.

    So why not warn me as I posted the item? A simple notice: “This is a high-risk sale, and PayPal will hold funds based on our policy at xxx”

    Then I could have made an informed choice about whether to continue to sell the item on EBay, sell it locally, or even not pick it up for resale in the first place.

    The implementation of this policy has seriously frustrated a good customer; one simple message is all it would have taken to make me
    happy. Is losing one $3 fee worth losing me as a PayPal and EBay customer? Apparently they think so.

    • angelleye says:

      eBay does return a message about the possibility of a hold when you post your item. Nobody knows when a payment is going to be held. It’s random. In fact, I’ve sold about 5 things on my account since this started. 2 of them were $1k+ items and 3 of them were less than $100. The 2 expensive items were NOT held and the 3 cheaper items WERE. Go figure.

      Anyway, it’s been a long time since I’ve posted an item manually on eBay, however, everything I’ve seen in the developer API is available manually too. When I post items via my web applications for myself or any of my clients where this could happen eBay returns the following warning message upon posting the item:

      PayPal may hold some of your payments in your account. PayPal will release the hold when you receive positive feedback or after 21 days without a buyer dispute, claim, chargeback or other action.

      Also, it’s not just 1 $3 fee eBay is worried about. It’s tens of thousands of $3 fees. Not to mention the plethora of charge-backs and disputes that are avoided by simply holding the funds until the buyer has received their item.

      I’m also curious. Was this item seriously the very first time you’ve heard of the eBay/PayPal holding policy? They’ve been very open about it. It’s not like they’re trying to hide it. The eBay blogs and forums are full of information about it. I understand as a casual seller you may not hang out in those community areas very often. In which case, is it really that big of a deal to wait a couple of days for your $10 profit?

  3. Bill says:

    The only problem with getting pay-fail involved is that it violates ebays own policy that says Seller agrees to ship x amount of days AFTER SELLER RECEIVES PAYMENT. Money on hold in an account is not getting paid. I don’t ever remember purchasing something online that I didn’t have to pay for (which means the seller is holding the money) before they shipped it.

    As far as small sellers go … if all the small sellers jumped off ebay there wouldn’t be an ebay.

    • angelleye says:

      You’re contradicting yourself a little bit there. Just like you say, from the buyers point-of-view you do indeed have to pay before the seller will ship the item. If you purchase an item on eBay and pay for it and the the funds wind up in a holding status on the seller’s end, you’ve still paid for your item and you’d expect it to be delivered within that time-frame. In fact, the buyer would have no idea the funds were even being held in “escrow” unless the seller contacted them about it, which I wouldn’t recommend, by the way. It just confuses buyers. All they know is that the money is no longer in their account and they can show proof that they sent it to you, the seller. Simple as that.

      On the seller’s side, the money is indeed part of the TOTAL balance and you would even incur your Money Market interest on it. It’s just not part of your Available balance yet, but it’s still your money and in your account. As such, you’ve been paid and you should ship your item. Think of it like a check or money order that’s guaranteed to clear (no way it’ll bounce) as long as the transaction is completed successfully, meaning the buyer at the very minimum has the item in his hands. Just becuase you deposit the check/money order doesn’t make it available immediately. It has to clear first. In this case the “clearing” is when the item is in the buyer’s hands. I realize that’s not a perfect analogy, but hopefully you get my point. The fact is you have been paid and should have no problem at all meeting your shipping deadline according to your auction terms.

  4. Jon Wold says:

    Well I’m a small seller who usually deals in cell phones. I just ran into this new policy and really hate it. I generally fund the shipments out of the proceeds of the sale. Now I can’t use PayPal UPS because I carry a zero balance and have to fund the shipment out of my pocket. One of the benefits of ebay/pay pal was that the little guy could sell things without much hassle. I have one item on payment hold pending receipt and another sale about to complete, which also will go on hold. After that, I’m closing both accounts and will find another way to accomplish my small sales…craigs list..who knows.

    • There’s an easy solution to your problem. Rather than fund the shipping immediately using your PayPal funds you can keep a running statement with UPS instead. You can adjust this in your PayPal account profile under Shipping Preferences. Just pay the statement balance in full at the end of each month, each week, or however often you want to do it. This way you don’t have to actually spend any money on shipping and then by the time the bill is due you should have your funds and can use them to pay the bill.

  5. Erik says:

    I actually like the hold policy, particularly for high value items. However, I would like to see the amount designated as S&H released immediately. I recently sold a 1k item with a $30 shipping bill. While I was able to pay the shipping out of pocket, it would make sense to release that amount immediately.

    My only REAL complaint is that the policy states that after positive buyer feedback is left, funds will be immediately released. However it would appear this isn’t true. Positive feedback for my sale was left last night and I still don’t have access to the funds. Contact with Paypal support tells me that they can see the positive feedback, so I only have to wait 24 hours to get the money. And then if it still isn’t availible, I can call back and they can manually release it.

    If the policy says “immediately” and they confirm that they know the feedback is posted and they say they can manually release the funds, why are they not obeying their own policy of “immediate” access?

    • As I mentioned in response to Jon’s comment, you don’t have to pay for the shipping right away. You could keep a running statement with UPS and then pay the statement off later when you have the funds available.

      As for the immediate release upon positive feedback…where exactly do you see the policy state that it’s immediate? I haven’t ever seen one released INSTANTLY but generally within 24 hours it’s done. I’m curious to see where you see the word immediate in their policy..??

  6. Neill says:

    If I sell an item on ebay and the customer pays via PayPal, what gives PayPal the right to take the customers money and withhold it until I ship the item and receive a positive feedback from the customer which the customer cannot do for 5 days as this is his first transaction on both Ebay & PayPal. Why do I have to wait 5 days for a payment which should be made available imediately if the customers funds have left their account. Its either that or I wait 21 days by which time I imagine that PayPal will have made a good amount of interest for themselves. This would almost be justifiable if the customer could cancel the sale and retrieve their money, but this cannot be done without a lengthy claims process. So it culminates in a stand off, because I will not ship an item that I have not received payment for because this customer is new to ebay and PayPal and the customer wants to cancel the sale because of all the hassle of it all and cannot because PayPal have stolen his money. for the forseeable future. This kind of thing does not make economical sense and I have now closed both my ebay and PayPal accounts. It appears that ebay do not want casual sellers anymore.

  7. What gives the PayPal the right? Well, they’re the ones processing the payment and they’re the ones who have to deal with all of the problems that arise when sellers spend money before the buyer has their item and is happy. And, it’s not the customer’s money any more. It’s yours. He paid you with that money and it’s now in your account, even though you can’t access it quite yet.

    You mention that PayPal probably earned interest. Well, so would you if you’ve got your account setup as a Money Market account. Even though the money isn’t part of your available balance yet it is part of your total balance and you earn interest on that just the same.

    PayPal will also release the funds after the shipment shows that it’s been delivered so you wouldn’t necessarily have to wait for the buyer to leave feedback. Although, by the time he actually gets the item in hand it’ll probably be close to 5 days anyway.

    If you’d just ship your item you’d have access to your money before long and everybody would be happy. If you refuse to ship it you’ll just have an unhappy buyer leaving you a negative feedback and you’ll have to hassle with filing a NBP, then closing it so you get your fee, then re-listing your item (or selling it elsewhere) and by the time all of that happens you’d have had your money.

  8. Pat says:

    You say PayPal are the ones who have to deal with the problems. Funny I thought that’s the reason they charge a fee. This is a SERVICE that they are providing and getting paid for it. Now to put myself on the buyers side about a year ago I purchased something paid for it using PayPal and never received the Item. After going through PayPals process I was told that I was right but that they could not refund me my money. Good thing I used my Amex card and they made good on the refund. But every time you buy something with PayPal they keep trying to have you use your checking account. Even when you pick alternate funding you have to be careful because they still have the web page set up in such a way that they make it tricky to pick the alternate payment method. Quite truthfully that seems a little bit of a scam on there part. Anyway if I had used my checking account instead of my Amex card I would of had no recourse whats so ever and would have been out a few hundred dollars. Let’s face PayPal is no saint in my eyes. Just a legal Loan Shark.

    • I’m not exactly sure if you’re arguing my point or agreeing with it..?? Everything you’ve mentioned here is exactly why PayPal has put this payment holding policy place. It’s actually a pretty widely-known tip to add a credit card to your PayPal account and use that credit card when you pay through PayPal. I know what you mean about the funding source, but it’s really not that confusing. You just have to make sure your PayPal account is at $0 when you do it or it will use the available PayPal funds and then put the rest on the credit card. I don’t really see that as a scam. That’s just what part of their service is.

      You’re right, though. It’s great you used a credit card and that you were able to get your money back from them. Not everyone is so lucky. Sometimes credit card companies will actually take the money back again from the card owner (I’ve seen it many times) because disputes the charge-back. Remember, PayPal sold you nothing. They should not be responsible for your refund. The seller should. Well, the seller is crapping out on everybody and leaving PayPal to blame for it. You feel like PayPal is scamming you, mean-while the actual scammer is running away with the money.

      If only this holding policy would have been in place when you made your purchase. The scammer would not have been allowed to withdraw your payment from his account until after it had been proven that you received your item. Because of the fact that you never did receive it and you filed a dispute, those funds would have still been there available for PayPal to refund back to you and you would have never had to mess with the chargeback through your credit card company in the first place.

  9. Dean Spencer says:

    I have just contacted paypal who have stated that its not them who decided to put holds on funds and that its an ebay policy.

    Even sent them a link to parcel tracking site with tracking number, they say they can’t help until person leaves feeback. or the 21 days pass, where they can do what they like with my money and everyone else’s money!

    • Correct. The sale occurs on eBay and they’re the ones who have all of the data about the seller regarding their time on eBay, their feedback level, the types of products they typically sell, etc. Therefore, they’re the ones who decide whether or not the payment should be placed on hold or not.

      Does your tracking number show that it’s actually delivered? If so, have you added this tracking number into the actual payment details page in your PayPal account or did you just send it PayPal in an email or something? If you’ve got the tracking number in the actual system and it shows it’s been delivered you should see your money available within a couple of days.

      As for PayPal doing “what they like” with the money, that is not true. One of two things will happen with that money. It will sit in the seller’s PayPal account until the buyer has received their item at which point it will become available to the seller. If that doesn’t happen and a dispute is filed the funds will simply be reversed back to the buyer. PayPal won’t be doing anything with that money while it’s on hold.

      Now, some may argue that they’re earning interest on that money while it’s there and whether or not that’s entirely true I’m not sure. However, the seller earns interest on it also (if your account is a money market account) because it’s really your money whether or not it’s 100% available or not yet.

  10. Dave says:

    I got round this annoying little problem by PayPal and ebay by telling the customer exactly what happened and asking politely whether they would mind leaving positive feedback even though they had not received the item otherwise they might have to wait twenty one days for me to post the. item.People tend to get unhappy when they realise the payment they have just made has been withheld from the seller and so help out without a problem.

  11. Dean Spencer says:

    Thanks for your response Andrew, did just send prof of del to paypal via email will have a look at entering it on their system. All this just frustated me and doing a little bit of venting help at the time.


  12. Samantha says:

    Paypal has held a payment of $123.00 not much money at all. I have been with ebay and paypal since 2004 but I only have 13 feedback, I don’t sell and buy that much BUT it is all 100% positive. I am ID verified (not sure what this protection gives except for giving them another $5.00). They will not release the funds until one of the 3 rules are met. I understand the reasons for these rules, but I do not believe that this is the best way to go about it. It is just frustrating since I do not do this often I have to wait and wait because you dont always get feedback and 21 days is not that is not around the corner to a small seller and buyer. I did have to apologize to the buyer because I did not understand what this meant and I emailed the buyer first to find out why. I hope I did not confuse them as I have not heard back from them. Sorry, just venting

  13. Victor says:

    I’ve been a member in good standing of eBay since 2003. I currently have a 100% positive feedback but only 8 stars. I haven’t sold much and never bothered to ask my buyers for feedback.

    I sell musical instruments that are expensive to ship. My last 8 sales on eBay have been held. I can’t afford to keep shipping and have already had 2 buyers cancel their purchases due to this hold. I refuse to ship until I actually have the money.

    It’s really a catch 22 situation. How can I get good feedback if I can’t send the buyer their purchase. How can I send the purchase if I don’t have the money to pay for shipping? If I can’t ship, how does the buyer get their purchase?

    This new policy is bad for everyone except eBay and PayPal.

    • I couldn’t disagree more. Items like yours are exactly the types of things that cause problems. That’s why you’re having so many held. Expensive items that could get damaged in shipping, among other problems, and sellers spending money before the buyer has their item and is happy.

      The fact of the matter is you do have their money already. It’s part of your total balance, just not your available balance. It is your money, though. Think of it like a check that’s guaranteed to clear as long as the buyer receives their item.

      As for the expense of shipping the items there is no problem there either. If you’re shipping with UPS or FedEx (and I recommend you do if you’re not already, especially with those types of items) you can ship items and bill them to your account. Then just pay the statement in full at the end of the month after all of the payments have actually cleared. Simple solution to the problem.

      There really is no catch-22. The buyer has paid and has no idea the payment is on hold (unless you tell them about it) and as far as they’re concerned the item should be shipped. You can ship items without paying for shipping immediately and then nobody will get screwed, guaranteed.

      This new policy benefits everybody if used the way it’s meant to be used. If you’d just ship your item(s) you’ll have your money within a few days just like they had written you a guaranteed check of some sort.

  14. Jack says:

    That last comment Andrew is not strictly true, if the customer does not leave you feedback, then you have to wait 21 days, this indeed is the unfair part. So it is not as cut and dried as you make out. Are you on their payroll or something?

    • Jack,

      Apparently, you didn’t bother to read the article. Positive feedback is not the only way the funds get released before 21 days pass. They will also be released once the tracking number entered into PayPal’s system (which happens automatically if you use PayPal shipping) shows that the item has been delivered.

  15. Victor says:

    I use a drop shipper who expects to be paid before shipping to my customer. How odd that my drop shipper won’t ship until he’s paid via PayPal. I tried to send an eCheck once. He waited until it cleared. There’s no way he would ship if he received money from me that was held by PayPal. Try convincing him to ship without being paid, 21-day hold or no hold.

    Sellers want their money in their account, not PayPal’s account, before they ship their merchandise. It’s just that simple.

    I work things out with buyers who have problems with their merchandise. This rarely leads to a dispute on PayPal, but with this new system, every purchase has become a struggle and 1 out of 2 purchases has become a dispute since I’ve begun demanding to be paid before I ship, for the moment, PayPal get’s paid, not me. If I want to be paid by check, I’ll ask for it. I don’t need PayPal making decisions for me.

    • Victor,

      I can see how a drop shipper may cause a slight problem. If the payment is on hold in your account and you’re trying to pay them you would indeed have to float the payment to him. However, I just really don’t see that as all that big of a problem, especially if you’re selling any reasonable amount of items. Either float the payment yourself for a few days knowing that as soon as it’s delivered you’ll have access to the original payment and will be square again or work out a deal with your drop-shipper. Educate him on what exactly this policy is and he’ll probably be more willing to work with you on it. The money is guaranteed as long as the item arrives and the buyer is happy. If not, it should be refunded and the money will be there available to do so.

      The money IS in your account. Not “PayPal’s” account. If you’re setup as a money market account YOU will earn interest on those funds because they are indeed a part of your total balance. Just not yet part of your available balance because of the policy. If you’re keeping track of all your accounts in QuickBooks or MS Money or anything like that, for example, you should include payments that are currently held as part of your total balance of that account. Seller’s DO have the money and SHOULD ship the merchandise. It’s just that simple.

      That’s great that you work things out with buyers and can often avoid disputes all together. Continue your good selling practices and eBay will eventually stop flagging your items with this policy. At least not nearly as much. If buyers are paying you and the money is getting held and you’re claiming that you haven’t been paid (not sure if I understood that correctly..??) then I can see how you’re getting disputes now. From the buyer’s stand-point they money is gone and they have a receipt showing they’ve paid you. The hold has nothing to do with them. Just ship the items and you’ll hardly notice the holding policy if you have a flow of sales every month.

  16. Victor says:

    In theory, it should work, but, in reality, it doesn’t work. My profit is less than a third of the sales price. The more orders I receive means the more I have to pay out of my own pocket to ship out.

    I was doing fine before the new policy and for a short time under the new policy, but the new policy is catching up to me financially, and now I’m strapped for cash.

    No matter how much PayPal pays you to say otherwise, their new policy does not work. I’ve refunded several orders already in the past few days. Everyone loses when this happens. I’m already looking for other ways to sell as well as other forms of payment. It seems like the only way to save my business.

    On a brighter note, eBay insiders have told me that this stupid, new policy is being reviewed internally and WILL change in the near future. The reaction to the new policy has been largely negative. How the changes will affect me is yet unclear.

  17. Jon says:

    Well, after many years with ebay, I closed out my account and refuse to do business with them anymore. I haven’t been a big POWER SELLER, buy I have provided them with a small steady income with my activities. I believe if you aren’t happy doing business with a company..stop.

    • Jon,

      That’s definitely an option that is always open to business owners. And I hate to say it, but you’re showing some ignorance by acting like I’m “so far up eBay and PayPal’s butt”. The truth is that my eBay account is suspended from my activities two years ago and they will not turn it back no matter how many times I submit a reinstatement request. I won’t get into the details, but the reason I’m suspended is because of OEM software which LOTS of people are selling to this day. So believe me, I have my own complaints with eBay.

      As for PayPal, I have complaints with them as well. For example, I mentioned in this very article that PayPal screwed up by introducing this new policy before they have the ability to update tracking information via the API. I find that ridiculous. The fact of matter, though, is that this article is regarding the holding policy which I do agree with and I believe I’ve presented plenty of good points as to why. If this article was about a different topic you might not feel like I’m so much of a fan. Overall, though, PayPal is the best and that’s why we all stick with them.

  18. Jon says:

    And by the way who is this Andrew Angell? He is so far up Ebay and PayPals butt he can’t fathom an opposing view.

  19. Georgie says:

    Hi, I have recently purchased a high value item from ebay and paid for it via PayPal via a bank transfer. Its been five days now and I still have not received the item and the seller has so far proved uncommunicative. The seller has only 92% feedback with 11 sales. PayPal have confirmed the bank transfer and they say it has all been paid for. However the money has not left my bank account as yet and I wondered whether it was because of PayPals new policy which has been mentioned on this site. I want to ask you if you know that if you pay via a bank transfer through PayPal, that they do not take the money out of your bank account until you receive the item even though PayPal say that it has been paid for?

    • No, the payment holding policy would not effect what you see on your end. From what you’ve said it sounds like you paid with an e-check, in which case that’s like writing a check. It’ll take a few days for the e-check to clear and sellers should not and in most cases will not ship the item until the e-check actually clears. That being said, you should see the uncleared authorization in your online banking (depending on your bank).

  20. Steve says:


    I agree that holding the funds for high-risk sellers is a good idea. In fact, most merchant accounts hold funds for certain sellers.

    What I would think as a good change, to help out the new sellers getting into e-bay, would be to not hold any funds for people with less than 10 sales. After that, apply the holds.

    This would allow new sellers, many of who require the money from the sale to finance shipping and/or purchase of goods, into the e-bay market place.

    As for the interest and Money Market … great, if you’re in the states. I am in the UK and I can find no way to join this initiative. Maybe I am missing something but a site-wide search on “money market” turns up nothing.

    All-in-all the intiative is not only a good one but is standard policy in merchant services. The implementation, in my opinion, needs some tweaking.


    • Steve,

      I can see where you’re coming from, but the problem is that sellers with fewer than 10 sales (feedback) are usually the ones who are trying to scam people. Scammers create new eBay accounts which of course has 0 feedback, or they may even sell a few low dollar items just to get a few positive feedbacks and then they post the expensive laptop that they don’t actually have and have no intention of ever shipping. If they’re able to spend that money prior to the transaction actually being complete (item in buyer’s hands) then that leaves the door open for all sorts of bad things to happen.

      If you need to cover shipping charges with money from sales you can simply bill the shipping label to your shipping account (except for USPS, of course) and then pay the bill at the end of the month. By that time your funds will have cleared and will be available to pay the shipping bill with.

  21. Jerry says:

    One of the problems i have with this policy is IT ONLY APPLIES TO EBAY. If i sell exactly the same thing through any other venue i get the funds immediately like i should. so why should i still sell through ebay?

    I can see the desire to hold payments for “high risk sellers”. but having been buying and selling on ebay since 1998 and having 88 feedback that’s 100% positive, and a paypal account that has been open since 2004 with no issues whatsoever, I’M NOT A HIGH RISK TO ANYONE.

    Good lord who makes this crap up!? Screw eBay they’ve just hurt me with one hold and that’s it. I put away all the other stuff i was ready to list on ebay. I don’t need this aggravation. I wont ship anything until the funds are available to me, period! I don’t care if paypal has the money in their account, we all know paypal can’t be trusted to do right by sellers. I don’t give a damned if this policy makes life easier for Paypal when they’re screwing me over to do so.

    It’s outrageous they even withhold the shipping funds from you and smugly tell you to “ship now”, yet they IMMEDIATELY take their paypal fee from funds they haven’t released to you yet! So i’m supposed to ship out of my own pocket, not be able to use my paypal card to get 1% cash back on the shipping and pray the seller doesn’t scam me with a paypal complaint!? No thanks, suck it ebay/paypal!

    • Hi Jerry. I can appreciate your concerns, however, I think you’re missing part of the problem here.

      First, I’d like to address your question, “why should I still sell through eBay?” My answer to that is if you can sell your products as quickly and easily on your own web site or over the phone as you can on eBay then by all means, I’d recommend it. You could save money on the fees and you also wouldn’t have to worry about the payment being held. There lies the problem, though. eBay is such a great source to sell products quickly and easily that the latter is not an option for many people. Especially people just trying to sell “things” here and there.

      As for your next point, believe it or not, eBay actually is trying to limit this to what they might consider “high risk sellers.” Perfectly honest people could fall into that category for a number of reasons, though. One example might be if you’re selling a bunch of cheap items and then all of sudden you start posting more expensive stuff. This would raise a flag. In your particular case, while you may not agree, you’re a prime target for fraudsters. You’ve got a long standing account with 100% feedback. However, 88 is really not all that much for that span of time when you compare it to many other sellers on eBay. I’m not suggesting you would ever do this, but if you were accidentally fill in one of the many phishing emails or web forms that fraudsters send out by the thousands and somebody were to obtain access to your eBay account they’d have a golden opportunity to perform their fraudulent tasks. What’s better than a long standing account with 100% feedback? Not much.

      So again, You would probably never do this, however, MANY other people do. There are gobs of eBay accounts that been opened for years with under 100 feedback at 99% or 100% who haven’t even touched it in a year or more. As such, when their account does get phished they don’t even realize activity is happening on their account because they don’t mess with it. They don’t check those emails anymore. They have no idea. Meanwhile, fraudsters sell expensive items on their accounts, use phished PayPal accounts to accept payment, and they never have any plans at all of shipping anything. This isn’t good for anybody involved. The holding policy solves these types of problems (and many others too).

      As for your additional rants, you could still use your PayPal debit card to print labels via the UPS web site. Simply bill the shipping to your UPS account. Then after the funds clear pay the UPS bill with your PayPal debit card and you won’t lose your cash-back bonus.

      One of the reasons you hear so many horror stories about PayPal suspending people’s accounts and holding their money is because of these types of things. When accounts get phished (both PayPal and eBay) and then they figure out that it happened they have to freeze everybody’s accounts that are involved. What this means is that even if you were to purchase an item or sell an item to somebody else who’s account got phished and frozen, your account could end up frozen as well (as well as anybody else’s account that interacted with the accounts in question) while they investigate and try to track down the original money. With the holding policy this is eliminated.

      Also, if you’ve got your account setup with Money Market you’re earning interest on it (while not much at the moment) even though it’s still in your Pending area. It is YOUR money. It’s been paid to you (which is why they take their fee immediately) and deposited into your “escrow” account. Just make sure to get your tracking information into the payment details and you’ll have the money once it’s delivered.

      Finally, if you decide not to sell the rest of your stuff on eBay that’s perfectly fine. What are you going to do with it, though? Throw it away? Leave it in the basement or in the garage or taking up space in the house? Sell it for a lot less money to somebody on Craigslist? These options are all perfectly feasible, however, I personally would rather wait a few days for the payment and make the money in the end.

  22. jonwold says:

    Hey Just do what I did..I had been with Ebay since about 1999. Only had 100 or so transactions all of which were 100% positive except for one guy who gave me negative because I refunded his money on a auction win becasue I noticed a scratch on the phone I was going to sell him..go figure…anyway cancelled my account last Feb and never looked back…Go to Craigs list, use the classifieds..start your own auction web buisiness….anything but use ebay!

    • These options are definitely available, however, it’s not practical for a lot of sellers. eBay is so popular all you have to do is post your item and it will sell. Using the other methods (especially your own web site) requires lots of time search engine optimizing, blogging, etc. so that people can actually find you. If you can make that work and sell the same amount of products, great. Otherwise, following the basic guidelines I mentioned in this article will allow you to keep selling on eBay without the headache that many people assume come with this new holding policy.

  23. Jennifer says:


    Really? Seriously? This is wrong on so many levels, and brushing it off the way you do just gives support to a *very* bad business practice.

    You can say “The money is in your account, just not available to you yet.” as many times as you want – clearly, you aren’t thinking hard enough about what that means. I sold items. I shipped items. My money is being held. Can I buy groceries with it? No. Can I pay my rent tomorrow with it? No. Does this money belong to PayPal? No. What exactly am I supposed to do with it? Do a screen capture and print it off and carry it to Wal-Mart with me and ask them very nicely to let me walk out of the store with the items I need because look! Here’s the money I “have in my account”? and I’ll be sure to pay them as soon as it “clears”? Until I can access the money – I do not have it. And do NOT compare this to regular banking holds and processes. Do you really think a bank could get away with a hold of this length? Yes, I get it. I could speed up the process by getting positive feedback. As if my buyers are obligated to give feedback at all. Or I could prove delivery. You better believe I went ahead and paid extra for that, but big deal. Everything went media mail. It could be a long time before I see my money, even though I did everything I was supposed to do.

    I’ve been with eBay and PayPal for 3 1/2 years. I have a feedback rating of 61 – all positive; no neutrals, no negatives. I’ve sold plenty of DVD sets in the past without any problem. But now, with this policy in effect, suddenly PayPal is holding over $1000 of my money until their criteria is met. I am guilty until proven innocent, and though a jury of 61 of my peers found me innocent, that wasn’t enough.

    Don’t let PayPal and eBay fool you, Andrew. You are behaving exactly as they hope people will – accepting something inherently wrong as okay because they’ve claimed it’s to “protect” you.

    PayPal had the nerve to email me today and tell me if I would “just raise my feedback score from 61 to 100” then I wouldn’t have this problem. Seriously. I guess since, as you claim, I should “follow the basic guidelines” to keep me “selling on eBay without the headache…”, what I need to do is start randomly selling off my possessions I don’t even want to sell, so that my rating will rise so that next time I need to sell something, I’m okay? Do you really not see how completely stupid that is?

    No, sorry, but I think more and more people are going to get burned by this and leave as I am – and eBay will continue to lose honest sellers while dishonest ones keep working the system. And forget about bringing in new sellers! As soon as they get slammed by this, they’ll shut down as well. People with integrity don’t continue to do business with companies that demonstrate an appalling lack of it.

    • Jennifer,

      The point you’re trying to make here actually helps make my own point. Your buyer has not even so much as received the item yet, much less do you know whether or not they’re happy with it. If you go spend that money on groceries or rent or whatever, and then something goes wrong with the order that would require a refund…what are you gonna do? Tell the buyer, sorry, I spent that money already…?? Ask him to wait until you have funds from other sources that you can refund him with? That’s not fair to the buyer at all. This is exactly the type of situation that causes so many problems and why the holding policy was introduced. If sellers were responsible enough to NOT SPEND THE MONEY UNTIL THE BUYER IS HAPPY, or in the very least has the item in hand, the holding policy might not have been as necessary (although actual fraudsters would still be trying to take advantage of it).

      Your Wal-Mart example makes no sense here. You’re comparing a retail store where you walk in, purchase the goods, and take it home right away. You, the buyer, have your item in hand and you’re obviously happy with its out-right condition or you wouldn’t have purchased it to begin with. As a buyer on eBay you don’t have that luxury of seeing, touching, examining the exact item. You have to wait to get it in the mail before.

      Let me ask you this…how much do you BUY on eBay? Have you ever been in the situation where the item you purchased was shipped incorrectly or was damaged in a way that shipping insurance wouldn’t cover or anything like that at all? How would you feel if even after submitting a dispute through PayPal, they side with you, even the seller agrees he should refund you, but he says “sorry, I paid rent with that money, it’s gone.” Oh man you’d be pissed. You’d be posting about eBay sucks, PayPal sucks, that seller sucks, etc. Everybody sucks just because the seller wasn’t responsible.

      As I mentioned to a previous poster, you’re actually a perfect target for fraudsters with the fact that you’re a long-standing account with low number of feedback at 100%. If somebody were to phish your account (maybe that would never happen to YOU but it happens to LOTS of people with similar account status) they could have a blast selling goods they never intend to ship and with immediate access to the money all of those buyers would be screwed.

      No worries at all, though, I’m not being fooled by anybody. I’ve got 10+ years experience selling on eBay with sellers that do roughly $500k/mo in sales. I know what works and what doesn’t. Believe me when I tell you that these sellers have seen fraud and problems with eBay sales drop dramatically with the introduction of this new payment holding policy. I’m actually surprised to hear that PayPal told you if you got to 100 feedback the problem would stop. That’s simply incorrect. It may not happen as much, especially if you’re actively selling items (61 over 3.5 years isn’t very active).

      If you decide not to sell on eBay anymore that’s your decision to make. People will product to sell understand that eBay is in invaluable source of marketing. To drop it because of an escrow policy just doesn’t make good business sense. Those same people doing roughly $500k/mo in sales on eBay would go out of business if they didn’t sell on eBay. The competition for search-engine-optimization is simply too steep for many people to compete with and get their sites noticed outside of eBay, especially for new sellers. It can take months, even with PERFECT search engine optimization, to see your site at the top of search engines. Put that same product in an eBay store, though, and you’re at the top in a day or two.

      So again, if you don’t want to sell on eBay because of this small, completely manageable change in payment policy, then that’s perfectly fine. But for those of us who want to continue selling our products and turning a profit, following the guidelines in this article will go a long way in relieving some of the headaches this policy may create.

  24. Ricky says:

    Hey Mr. Angell I can across your site longing into this ebay new policy thing. First of all I respect you and your opinion on the fact, but that is all it is your opinion. My opinion is that I can see good and bad with this policy. It’s good to be positive but being over positive makes you sound like a salesman for eBay Mr Angell. There are other sites to sell on, I having a great time with Amazon..etc.

    • Hi Ricky,

      That’s great that you’re doing well with Amazon. By all means, keep at it. I learned a long time ago not to worry about things I can’t control. eBay and PayPal are the way they are, but the fact is, they’re extremely valuable tools. You might consider that my opinion, but I think it’s more than that. If you actually sit down as a business man with a product to sell and look at the numbers all signs point to using eBay as one of many tools (one of the better tools) for getting noticed on the web. In order to use them you have to follow their rules. Simple as that. I just find it mind-boggling that people are willing to throw away profit just because they don’t like this one policy.

      Literally, people are throwing away items or giving them away instead of selling them now simply to prove a point. eBay doesn’t care if you don’t sell your stuff anywhere. In fact, if you have a problem with this policy they’d rather not have you around anyway. That’s part of the point. If it’s really that big a problem for you not to spend money before the buyer has his item then you probably shouldn’t be selling on eBay to begin with. It’s bad for buyers.

      Anyway, that’s all this article was ever meant to be. You probably wouldn’t believe it based on most of the comments here, but I have received many thank you’s for shedding light on some of the simple things you can do to get your money as fast as possible. Any business with a consistent cycle of sales won’t even notice this policy because it’ll just become part of the cash-flow system on a monthly basis. If you’re not a big business and you only have 60 feedback over 3+ years then you shouldn’t be trusted the same as a seller with 100k feedback over 1 year.

      On that note, I don’t mean trusted to send the item. I mean trusted that you haven’t been phished and it’s not really you “selling” me that item, but somebody else posing as you who has no intention what-so-ever of shipping it. I think that’s the biggest misconception about all of this. Many of the comments I see are about how they think eBay is calling sellers guilty of some crime or blaming them for intentionally doing harm. I don’t feel that’s why this policy was implemented. It was implemented because of people unknowingly giving away their passwords to fraudsters who would then run a muck with a completely open system to do it on. There are SO many people out there and SO many phishing emails getting sent that 1 slip-up by somebody out of thousands of emails can cause huge problems for a long daisy-chain of buyers and sellers.

      This response turned into a lot more than I intended, so I apologize. You’re right, though, it’s all just more of my own opinion. 🙂

  25. Ricky says:

    That is rather silly that people are giving things away because of a new policy. I shouldn’t go that far out. I see your point of view from a buisness stand point. If I was trying to run a buisness on eBay I would have worked with or even over looked this small change in policy. Hey if you’re running a health business you should already have the funds to do what you need from the start. But luckily I don’t use eBay as an source of income I am more of an casual seller you know (sell things I don’t use or need anymore). I’m sure that eBay doesn’t what to lose our business. Yes they might be the biggest online auction site in on the net. But it was the little people that build eBay to the giant they are now. I’m a private investor (this is how I make my income) I make money on eBay when there stock goes up and when it goes down. eBay is one of those companies that have a very unhealthy stock. All I’m saying is in these times of greedy companies that are going bankrupt left and right eBay needs to cool it on all these policy changes. “If it ain’t broke don’t fix it” I always say.

    You stated: “In fact, if you have a problem with this policy they’d rather not have you around anyway.”

    That is not necessarily true. Where do you think all that money in the market is coming from? I hope you don’t think that all eBays profits are coming from a few power sellers. Companies like eBay always want my money. eBay grew before there were power sellers.

    You stated: “That’s part of the point. If it’s really that big a problem for you not to spend money before the buyer has his item then you probably shouldn’t be selling on eBay to begin with.”

    Not a problem to me, I just think it’s a unnecessary policy. Plus it’s very unprofessional to put out a new policy without alarming the community on the new policy change. I would rather eBay give us the reason they are doing this because up to this point it’s all he said she said info. This can all be fixed it eBay or paypal make tracking numbers when shipping items a requirement.

    You stated: “It was implemented because of people unknowingly giving away their passwords to fraudsters who would then run a muck with a completely open system to do it on. There are SO many people out there and SO many phishing emails getting sent that 1 slip-up by somebody out of thousands of emails can cause huge problems for a long daisy-chain of buyers and sellers”

    Sir this new policy does not shovel this problem. eBay needs to be more professional and give a reason for these actions.

    • Yup. I know people who have literally closed up shop and gone back to work full-time for somebody else simply because “I don’t want to let eBay tell me how to run my company” which just makes me laugh.

      I agree that the little people are what helped make eBay grow so huge and it is a shame things have turned more towards power sellers than the “little guy”. It’s kind of inevitable, though. Those high end sellers may be few, but they represent a large majority of the traffic that gets pushed through eBay. If buyer’s can’t even trust your high-end seller accounts there’s no way they’ll trust low feedback sellers. eBay was losing buyers, simple as that. As such, in my opinion (and obviously in the opinion of eBay/PayPal) it WAS broken and that’s why they fixed it.

      As for the new policy, they actually did give plenty of fair warning about the policies. If you keep up with eBay’s community updates at all or sign up for their email updates you should have seen it. If I remember correctly we knew at least 6 mos in advance that this policy was going to occur. They don’t normally give exact dates, but they’ll tell you things based on quarter’s of the year. If I remember correctly it was early in the year that they announced the 4th quarter would bring this change. It could have been the other way around, though, I don’t remember for sure.

      As for the phishing emails, I think you underestimate the magnitude of that problem. I’ve mentioned in the article as well in many comments about examples of how 1 bad transaction can cause 10, 15, 20, or more eBay and PayPal accounts to get suspended while they try and track down the actual fraudster and the original funds. This pisses off a whole lot of people, of course. I have clients that fell into this trap in both directions. Sometimes, somebody in the office was the sucker who accidentally filled out the phishing email. Sometimes, they simply sold or bought something from somebody else who was the sucker. Other times it was because they sold to somebody who sold to somebody else, who sold to somebody else that made the mistake. The further down the line the more people get screwed.

      That whole problem happened because the seller had access to the money before the merchandise was delivered, and as such, they could easily post and sell things without any intention of ever delivering it. The holding policy eliminates this problem and I can confirm that based on the dramatic decrease of fraudulent and disputed transactions that my power-seller clients have noticed ever since this policy was put into place.

      I hope I didn’t sound too argumentative. I appreciate your feedback and conversation!

  26. Eric says:

    I have been on eBay for nearly a decade, 61 positive and 0 negative ratings. PayPal should not punish me for having less than 100 ratings. They should take the ratio of positive to negative ratings AND length of eBay membership into account.

    I’m quite sure PayPal is enjoying the extra interest they earn while “protecting” the buyer.

    • Hi Eric. It may be hard to believe, but an account like yours is a prime target for scam artists. A 10 year old account with 100% feedback looks great to buyers. However, somebody who’s had an account for 10 years and only sold (or bought) roughly 60 – 70 items shouts out here’s a person who doesn’t use their account all that much. As such, if a fraudster can get a hold of your eBay account login (that might not happen to you, but believe me, it happens all the time) and can safely assume that anything they do on your account will likely go unnoticed until it’s too late.

      That type of thing was happening all the time. An account like yours would get phished, the scammer would post expensive items on the account without ever planning on shipping a thing. Buyer’s would send payment in some fashion (usually money orders or phished paypal accounts) and they would never receive a thing. Then when the buyer files disputes eBay and PayPal come after you, at which point you say I haven’t even bee signed into that account for 2 years, and now you’re upset, the buyer(s) are upset, eBay and PayPal are upset…everybody loses.

      With this simple “escrow-like” (I do find it funny they can’t call it escrow) policy that problem (and this is just one example) is completely solved. If the buyer never receives anything there’s no way for the “seller” to get away with the money.

      Besides the scammers, some sellers were simply dishonest. Selling items with false conditions or trying to claim false shipping insurance claims. Things like that annoy buyers. When buyers are upset they stop buying. eBay has LOADS of data that they were analyzing that represented this very well. Quite simply, they were losing buyers. If you lose buyers (low demand) the prices of all your items are going to drop and your market is going to dry up. So, not only do the new policies help buyers and sellers alike, it makes perfect business sense on the part of eBay/PayPal.

      As for the comment about PayPal enjoying their interest on your money, that’s simply not true. The money is in YOUR account and if you’re setup as a money market YOU earn that interest. Now, maybe with their overall balance they are getting some interest too, but it’s not like they’re screwing you out of your interest. While that money is pending you earn interest on it. Once it’s cleared you can withdraw it to your actual bank account. However, if you’re transferring out of PayPal as soon as possible then the interest really isn’t all that big of a deal to you is it. 😉

  27. Robert says:

    Sorry but what PayPal is doing is wrong. If they cant keep their site from getting hacked and other people using others accounts to rip people off then it is not a safe way to do transactions. I would think they have some PCI compliance issues.

    • It’s not PayPal that is gettting “hacked” it’s their users. And it’s not a matter of getting hacked. If you’ve got a protected system and somebody gives away a username and password to that system it’s no longer protected. Users give away their credentials (unknowingly) all the time and it causes big problems. PayPal is countering these problems by introducing policies like this.

      PCI compliance is another animal entirely and I can assure you that PayPal is indeed compliant.

  28. Irish says:

    Andrew Must work for Ebay I have seen his posts all over the internet in defense of this terrible policy.It’s not even good for the buyer as the sellers many times just choose to give a refund rather than deal with the hassle of this policy which means some kid might not get his birthday present on time because Ebay and Paypal had to stick their nose where it didnt belong.Why have a feedback system if it is not going to reward good business.Do an internet search on ebay 21 day hold policy and you will see that 99% of not only sellers but buyers to hate this policy and are turning to other online buying options just to avoid it.

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