Starting typing a response here and didn’t want to derail the original thread, so I’ll ask here:
What is up with all the hate for PayPal? This isn’t the first time I’ve witnessed a Doper act as if PayPal will, I dunno, come to your house and eat all your food and poop in your toilet without flushing and then clean out your savings account. Or something.
Tell me: are there specific issues with PP? I’ve used it, sparingly to be fair, but never once had any problems, and the idea seems simple enough: move $$ from A to B without B knowing A’s bank account info and vice-versa. Is that sniff so very wrong?
Their fees are vampiric. 3% of all transactions, with no cap on the amount. I’ve done a lot of freelance work, and begged my clients to pay me some other way. You do a $500 job, you puke up $15 for the privilege of getting paid, lather, rinse, repeat, and pretty soon you want to claim PayPal as a dependent on your tax return. That 3% is even worse than it sounds, though: let’s say you sell goods/services at a 100% markup. That 3% subtraction from gross revenues is now 6% of your gross profit, and a substantially higher percentage still of your net.
The real killer is that you don’t have any of the safeguards, recourse, legal remedies, etc. that you at least have with the credit card/legit banking systems. Those entities charge high fees, too, but at least you get something for your money.
You have to pay fees when using them as a service to accept money for retail sales (like eBay) but if you’re just sending money to someone, you can mark it as a “Gift” or one of the other choices and they won’t take fees out.
I’ve been paid as an independent contractor on a monthly basis for some side work I do, and I’ve never had a penny taken out of that in fees. I’ve always received and withdrawn 100% of what I’ve been sent.
I run a summer camp, and we accept payment primarily through PayPal. Of course I don’t like the fees, but it is very simple. Easy to accept money, easy to refund money, easy to transfer money. And most people already have an account, so it’s no hassle.
Personally, I started that thread you mention in the OP because I remembered hearing horror stories (no source right now) about PayPal holding onto money and not letting it go — basically doing whatever they like with connected accounts and not being, well, accountable, since they’re not a bank, then stonewalling.
I’ll have to see if I can find some of those stories, so at least you’d know what I’m talking about.
If you have a problem with a vendor you paid through PayPal, PP makes you use their dispute resolution process, which is skewed in favor of the merchant. If you paid via a credit card through PayPal, and you try to dispute the charge (instead of using PP’s dispute resolution process), PP will shut down your account.
PayPal account holders have had their accounts frozen (with substantial funds made inaccessible) for seemingly arbitrary reasons, and have had great difficulty (or wasted a lot of time) trying to restore access.
If you’re a merchant, yes, the 3% fee gets a bit annoying, but it’s not a whole lot worse than what credit card companies are charging. I have a small business that I run out of my house inmy spare time, and I don’t accept credit cards. I take personal checks by mail, but some people prefer PayPal, so I make them pay the fee. This probably turns off some customers here and there, but that’s fine - I’m still selling product as fast as I care to make it.
They’ve gotten a lot more reluctant to process “gift” transactions. Also, since more and more money is moving through PayVampire, the IRS is starting to scrutinize those transactions to detect unreported income, so there’s an increasing risk in labeling a business transaction as a person-to-person “gift.” For what it’s worth, you are, in fact, committing tax fraud by representing such (taxable) income as a (non-taxable) gift. This is an issue outside the scope of the fees PV charges, but it’s been an important issue for me as I basically have had to make the choice between being bled and committing the abovementioned tax fraud. The IRS ruled a long time ago that independent contractor earnings are taxed as ordinary income, so labeling any such revenues as “gifts” for the purpose of evading PV fees is dangerous.
The most colossal act of hubris is their limit(s) on withdrawals within a given time frame. Yes, you can ask (beg) to get the $500/month limit raised, but until you convince them to do so, you could get paid $1000 by someone and have half or more of that money trapped there until next month. Who are they to tell you you can’t have your own money?? Death to PayPal (PayVampire)!!!
Personally, I’ve heard horror stories about charity accounts being frozen. Paypal will argue the heck out of what is and is not a charity and whether people have the right to use a “Donate” button on their website. In the meantime, those thousands of dollars are frozen and useless. I’ve heard that story multiple times, to the point that some small-time or personally filed charities refuse to use Paypal now.
Personally, I haven’t had issue with the company. They provide a helpful service. I might think differently if I used the service more than a dozen times a year and started running into problems, though.
To be clear, I don’t know how the employer was marking these transactions. Certainly not as “gifts” but I’m not sure what exactly. I just know that I never pay any fees. They have a premium business account though, which maybe is the reason.
Wow… I always suggest you don’t leave any substantial amount of money in your PayPal account, but if they limit you to withdrawing $500 per month I would not suggest using it to receive substantial sums of money.
Most people have no problems with PayPal but if you do, there is no recourse other than you talking to them about the problem.
For the everyday person who just makes purchases online and perhaps gets paid small amounts, I think it’s absolutely fine.
I used to take in about $300 per month for tutoring and it was the perfect way to get paid. I didn’t really care about the 3 percent, as I was already getting shafted for much more by the tutoring company.
But anyway, once I had to call their customer service on Thanksgiving and the guy who answered was nothing less than absolutely lovely.
I’ve never had any problems with it other than that. I think people who tend to have issues are the ones who end up keeping a large Paypal balance.
I agree, but I’ve had several major clients who insisted on using PayVampire for transactions. I eventually marked up my invoices by 3% to cover those costs. The withdrawal limit problem remained, however, and I got it raised temporarily after the seventh of seven of emails that I sent was finally responded to by their Ignore the Customer division. I then bled out the account, except for $50 or so I use to buy used CDs on EBay.
I would actually pay that 3% in many cases if there was a reasonable cap on the amount of the fee, say $10.
So do people link “real” bank accounts to PayPal? One of my vague horror story memories is of PayPal actually freezing or blocking activity on “real” bank accounts registered to their site.
I do well over $ 100,000 a year in paypal transactions on ebay.
A few points
1: They do report your activity to the IRS if you have over $ 20,000 in transactions. Under that (currently) they do not.
2: The fees are (IMO) somewhat abusive but it’s the cost of doing business and I adjust my asking prices accordingly.
3: If a buyer has a complaint the seller you better have all the paperwork and emails for all aspects f the transaction or you will lose the dispute. Even if you have it all you may still lose the dispute. The buyer is the God-King in disputes and the seller is the presumed peasant. Paypal is not on the seller’s side regardless of the volume of your business.
4: The transparency lets international buyers buy things with ease. This is a big plus on some items.
5: It’s far better than having check mailed to me which is what used to happen back in the day.
A few years ago, Payscam processed a fraudulent transaction on the credit card I had linked to the account (I now have no linked financials), $999.99, my CC company caught it and reversed the charges, thankfully, I called Payscum and asked them to prosecute the scumbag thief, their response?
“Oh, we don’t go after small transactions”
Fuck 'em, fuck 'em with a rusty railroad spike, if I was dictator of the world, I’d nuke 'em (and the scumbag thief) from orbit…
They can’t do this. What they can do is freeze any funds that you have in your PayPal account, prior to your transferring it into your real bank account. For some people who use PayPal for their business, this can amount to a large sum of money.
That said, I use PayPal pretty freely these days and don’t worry much about it. I don’t let money sit in the PP account any longer than absolutely necessary, though. The second it shows up, I transfer it out to my actual bank.
I use it pretty casually. I use it for eBay (I don’t buy or sell much in a year) and if I’ve got cash in there, I’ll use it occasionally for donations. I use it to pay for the SDMB, and whatever other online stuff that only accepts PayPal. I usually pay via my credit card, not bank account.
Someone I know owes me money and asked if she could use PayPal. At first she was paying and making me pay the fee, and I just took the net amount from her total owed. She’s wisened up and now pays the fees herself, so as not to make me want to kill her even more.
As a business owner who pays out the ass for a merchant account, I’m always puzzled by people complaining about fees. You can have someone mail you a check and drive it to the bank yourself, or you can pay a fee to collect money electronically. If you don’t like PayPal, you can go somewhere else and pay fees. Not sure how you expect merchant services to make money - they charge fees. PayPal offers a lot more tools than most merchant accounts too - with others you usually have to connect them to tools by yourself. So if PayPal fees seem high, it’s because they’re doing more than a typical merchant service. Just be glad you don’t have a monthly fee too (for your personal acct).
I’ve heard horror stories, but actually had no problems with them. I think in one case not me didn’t recognize a transaction and they reversed it, even though it was a legitimate transaction not me had authorized.
Don’t know about them freezing outside accounts, but I don’t link them to my bank’s checking or savings account; I don’t trust them not to suck money out, either by accident or on purpose, especially given the horror stories I’ve heard about problem resolution.
When my PayPal account gets up to around $1500 in it, I request a paper check to be mailed to me. They charge $1.50 for this, which works out to 0.1%. Tolerable. I guess paper checks aren’t subject to that $500-per-month withdrawal limit? I’ve never had any issues with that.
