Thursday, November 15, 2012

Beware of Paypal!

Just had a frustrating experience with eBay/Paypal. I'm sharing my experience so you can be aware of the situation and avoid the same issue...

Firstly, I should say that I have been an eBay user for many, many years, and have been very successful using eBay and Paypal. However, recent changes have made me uneasy about the site's security and their policies. (For those who don't know; eBay owns PayPal.) Until about three years ago, I was very satisfied with their service.

Since then, a number of incidents haschanged my impression of eBay and PayPal.

Some examples....

1) I auctioned off a large keyboard. In the auction, I stated I would only ship to the continental US. A lot of people were "watching" the auction, when an Australian bought it using "Buy It Now."

After canceling the bid, I was able to relist the auction, but when you "realist" an auction, there is no way to let the people who had been watching the auction know that the item is available again. You just have to hope they see it.

2) I listed an iPhone. There were a lot of watchers and bidders. At the last moment, the auction was "sniped" by a bidder with 0 feedback from Vietnam who bid a ridiculous price. It was obvious that the buyer wouldn't pay, yet eBay technically required me to wait a week before filing an unpaid bidder report. Again, I lost the watchers/bidders... and time.

I should note that in addition to losing the watchers/bidders, the auction restart affects the timing of your sale/cash flow. For example, I listed the keyboard so that the auction would end a few days before I left town. When the auction was cancelled, I was unable to relist the board for a few weeks, due to travel.

3) eBay/PayPal has made it very easy for buyers to make fake claims/freeze your funds. When I sold the iPhone, the buyer filed an "item not received" claim a month later. Since I had the tracking/delivery confirmation info, I was able to get it dismissed, but I had to spend an hour on the phone with them to do so. During that conversation, the rep told me that this buyer had pulled this quite often. Yet, eBay/PayPal was still allowing him to do it.

These are a few examples.... which leads me to my current situation.

Recently, I linked my eBay & PayPal accounts at eBay's prompting, allegedly for more efficient payment. Yesterday, I won an auction for an iPad with wireless and cell connectivity. My intention is to use it for music notation and synth playing at gigs. This was my first time using PayPal/eBay since linking the accounts. Usually, I am able to choose the funding source, whether my bank account or credit card, before completing the transaction. Generally, I choose credit card for significant purchases, to have an additional layer of buyer protection. This time, I wasn't given the choice, and the payment immediately went through using my bank account as the source. It shouldn't be a big deal, except for this.

A few minutes after the payment went through, I got a message from the seller telling me that the iPad did NOT have cell connectivity, only wifi, and offering a refund if this mattered to me. I accepted the refund, which should have been the end of the transaction. Except, that's not how PayPal treats situations like this. PayPal withdrew the money from my account, and will refund it in 3-5 business days. The refund will go to my PayPal account, and then it will be another 3-5 business days before it is returned to my bank account.

The PayPal rep I spoke to says that PayPal fronts the money to the seller "as a service to the buyer, so that the item will be shipped sooner". However, when the buyer refunds the money, Paypal will wait the 3-5 business days is allegedly takes for the bank to transfer the $ to PayPal, before crediting my PayPal account. Then, if I want the $ back in my bank account, it will take ANOTHER 3-5 days to make that transfer happen. I don't know, the funds disappeared from my bank account immediately. It seems to me that PayPal wants to sit on the $ for a bit, earning some interest on the funds.

This is simply unacceptable to me. PayPal has opted to provide poor customer service here. Even if their description of the timing is accurate (and I don't believe it is), they could still front me the refund just as easily as they fronted that very same $ to the seller. This poorly chosen policy will affect my use of PayPal and eBay. Caveat emptor!