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| | The Minding Your Own Business Network is not currently active and cannot accept new posts | | If you use PayPal, you should read this | Views: 1826 | | Sep 25, 2006 8:08 pm | | If you use PayPal, you should read this | # | 
Cathy Wagner | | Hello!
It's been ages since I've been here, but now that my youngest has started full day school, I have a lot more time to get out and interact with my fellow online business people. :)
I recently had a lot of trouble with PayPal. If you use it and plan to continue using it as your business grows, please read the following to avoid the mistakes I made.
Cathy Wagner
Online Business Expert
Providing Freedom Seeking Entrepreneurs with
Low-Risk, Online Profit-Building Guidance.
http://www.onestopinternetbusiness.com
------------------------
Is PayPal Really Your Friend?
by Cathy Wagner
Those of you who know me most likely know I've been a big fan of PayPal for a long time. I've been using them and recommending them for six years now and, for the most part, they've been a wonderful alternative to a costly merchant account.
Today, I have a different story to tell. One which you will certainly want to hear if you use PayPal and plan to continue using them as your business grows.
A couple of months ago, I met a Chinese supplier of designer clothing. He seemed very nice and was looking for people to help him sell his wares on E-Bay. He had a web site to display his stock and he guaranteed $600 per month or more for sales agents. "Ok," I said, "I'll give it a try." I had a friend who was working with him already and making more like $600 per week for what amounted to a couple hours work per day.
I started listing sales. Being the gung ho kind of person I am, I listed many sales. When I sent in my orders, I was shocked to hear, "I don't have these items in stock." OMG! His web site said they were in stock! What to do?! I looked for other suppliers who might have what I needed. It took a little time, but I found some. I quickly sent all the orders and cash I had collected in the hope that these new suppliers would be able to get the merchandise to my customers within the time frame I had promised.
Unfortunately, this was only the beginning of a long list of trials and tribulations associated with my first full scale E-Bay venture. Many orders were delayed for an unreasonably long time in Chinese customs. Another significant chunk of orders were placed with an unscrupulous supplier who took my money, but never sent any products.
As you can imagine, customers were not happy. Every day I had to face 30 or more angry messages from E-Bay buyers who had not received their items. I spent weeks explaining about backorders and customs delays. Then, once I realized I was scammed, I had to explain that to a lot of people, too. Believe it or not, many people were understanding and remarkably patient. Others got angry and submitted PayPal claims against me and that's where the real trouble began.
I remained hopeful that I would be able to cover my losses and satisfy all customers until PayPal limited my account. I understood their reasoning behind it, but the reality was, after fulfilling 90% of over 150 orders, I was suddenly dead in the water with no way to earn more money and pay the remaining dissatisfied customers.
I called PayPal immediately. I explained the entire situation, reminding them that I had been a member in good standing for years and asked for their help. The answer was no. I tried to make them see that their standard policy in this unusual circumstance was actually hurting me, the customers and even PayPal itself. I let them know that I had proven my integrity by fulfilling the overwhelming majority of orders and needed them to lift their limitation (at least partially) in order to fulfill what was left. They wouldn't budge. They insisted I resolve all claims immediately, but left me with no way to earn the money to do that.
I soon learned their claims process did not work as well as expected. It took a very long time for resolved claims to show as resolved and there seemed to be a variety of errors that I would never have expected from a company as large as PayPal. They drained what money I had in my account and even gave refunds to people who received their items! They also stopped payments I made to one reliable supplier who had shipped merchandise long before the account was limited. Basically, they took over control of my business and mismanaged the funds that I had left.
Now, I don't hold myself blameless in this situation. I made the choice to do it in the first place, I dove right in, and I believed suppliers that were less than honest. But, you may be surprised to learn just how many people have gone down the exact same path as me. We've all seen ads looking for E-Bay workers. The suppliers I used (except for the initial supplier who recruited me) all contacted me through E-Bay asking me to sell for them. And, I have since learned that there are thousands of people out there who have had to deal with the same "You're on your own" attitude from PayPal, no matter how earnestly they tried to deal with difficult circumstances beyond their control.
I have since set up a regular merchant account of my own (it's surprising how much easier it is today than it was six years ago!) Now I can accept payments directly without a third party processor like PayPal. I am still talking with many of my dissatisfied customers and have every intention of making things right with every one of them. But, please take this as a warning. PayPal is your friend, but only up to a point. If your sales volume increases significantly, they will start to pay more attention to you. And, if you sell a physical product, be sure to keep extra money in your account just in case you experience difficulties beyond your control.
At this point in my career, I am no longer recommending PayPal because getting a merchant account has become so easy that there really is no need, provided you sell enough every month to cover the fees. Another word of advice, if you decide to try your hand at being an "E-bay Worker" go slow. Get delivery confirmation before selling a massive amount of products for any supplier and don't choose a high priced product ($500 or more) to start with. It may be tempting to earn a higher profit, but suddenly higher sales totals will raise a red flag and PayPal will start paying more suspicious attention to you and your business.
Private Reply to Cathy Wagner | | Sep 25, 2006 8:53 pm | | re: If you use PayPal, you should read this | # | 
Reg Charie | |
Ouch Cathy.
Not that it helps but you are not alone.
While a lot of sites use PayPal I will not use them on my own site or
recommend that a client use their services, for the reasons you mentioned.
There are just too many horror stories.
I use 2CheckOut's services. (http://dotcom-productions.com/cms/index.php?cPath=70_34)
I have used their services for close to 4 years now and it has been a
pleasure dealing with them.
They are polite and helpful if you encounter a problem.
Their security is second to none, and due to this I have never had a
chargeback.
If you are selling hard goods you will appreciate their "ok to ship"
notifications that you receive when the credit card transaction is
confirmed.
2CheckOut operates as a "retailer" of your goods.
They accept all major credit cards, and while their percentage is a couple
of points higher than a merchant account, there are no monthly fees to eat
away at low sales volumes. There is a one time setup fee of $50
To put this in perspective, the break even point between paying the same
amounts using a 3.5% merchant account, (with a $25 monthly charge), and 2CO's 5.5% is $1250 a month in
sales.
Not only am I a satisfied customer, I recommend their service as an
affiliate.
Reg
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Design, Marketing, and webmaster's resource .
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Private Reply to Reg Charie | | Sep 25, 2006 9:23 pm | | re: re: If you use PayPal, you should read this | # | 
Laura Wheeler | | PayPal specifically restricts drop shipping, or custom orders where the item is NOT in stock with the seller at the time of the sale.
There is a reason why they do so.
If you use PayPal, you should fully understand their terms of use. I have used them for about 5 years, fairly high volumes at times, with no problems.
The rule with drop shipping or custom orders of any kind is to NEVER resell a product in volume until you have proven the reliability of the supplier.
Laura
Mom to Eight
Owner, Skinny Shoestring
http://www.skinnyshoestring.com/Private Reply to Laura Wheeler | | Sep 26, 2006 2:43 pm | | re: re: re: If you use PayPal, you should read this | # |
Cathy Wagner | | Thank you Reg (I really like your pic!) and Laura for your comments. It's true I am not alone and there are ways to work with PayPal, I do not consider it totally useless. I only hope others will learn from my experience and be able avoid the stress and aggravation that I (and many others) have gone through. :)
CathyPrivate Reply to Cathy Wagner | | Sep 26, 2006 9:31 pm | | re: If you use PayPal, you should read this | # | 
Lisa Braithwaite | | I also avoid PayPal for my retail business because of the abovementioned issues - I've heard way too many horror stories.
My processor is ProPay, similar to 2Checkout. I've used them for about two years now; never had any problems and the rates are reasonable. There's no monthly fee, and a one-time setup (or upgrade) fee.
LB
Lisa Braithwaite
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Public Speaking and Presentation Skills Coaching
www.coachlisab.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Elle B. - Adornment for Uninhibited Women
www.ellebstyle.com Private Reply to Lisa Braithwaite | | Sep 26, 2006 10:34 pm | | re: If you use PayPal, you should read this | # | 
Michael R Clayton | | Hi Kathy
You may already know this that; Pay Pal and by E-Bay are now in the same ownership.
I still use PayPal but for a long time have been aware that a large percentage of people have had big problems with both E-bay and Pay Pal.
I have had my Pay Pal account suspended for no reason and then reinstated again. Possibly because people has sent millions of spam email and used my email address as reply address. I use to get 1000s of bounced email a day at one time.
I had two transactions (purchases on ebay) one was fine. The other the purchase services were never delivered. E-bay did nothing about my complaint. The merchant still sells on E-Bay.
I suggest this for anyone wanting more information on both Pay Pal or E-Bay
Go to Google and type "Pay Pal Complaints" or "E-bay Complaints" or " Pay Pal or E-bay Scams" You will be reading forever.
If you want to be in serious online business see your local Bank to set up a direct payment system. All banks can do this but costs are high (transaction fees are low) but money is in your account instantly.
There are many good affiliate companies that can also collect money and forward it to you also. This is a good option if you do not have funds to set up your own business.
Kathy I sympathize with you and admire you for your honesty and persistence to resolve this for your clients.
Also thank you for sharing this as it may save others from being used or misled.
Regards Michael Clayton (rexiedexie)
Meet Me At My Many Community Profiles Page
http://networking.love-au.com/ Article http://www.writingup.com/blog/rexiedexiePrivate Reply to Michael R Clayton | | Sep 26, 2006 11:17 pm | | re: re: If you use PayPal, you should read this | # | 
Gary Stewart | | Can anyone answer this? Can you use a third party merch. acct. on e-Bay.
Such as those mentioned in the above replies. I believe that you can only use paypal as an MA.
GaryPrivate Reply to Gary Stewart | | Sep 27, 2006 12:00 am | | re: re: re: If you use PayPal, you should read this | # |
Cathy Wagner | | Thank you Lisa, Michael and Gary for your comments.
Lisa, the only difficulty I've found with other third party payment processors is, in most cases, your customers need to be a member of the the same processor and of course, PayPal is the most popular. That's why I'm recommending merchant accounts.
Michael, thank you for your admiration. I appreciate it. :)
Gary, while E-Bay seems to prefer PayPal, probably because they are part of the same company, it is possible to use a number of payment methods, including credit cards, checks, money orders, and even Western Union. You just have to mark each item as paid manually if you don't use PayPal. I don't know if one can use 2CheckOut or ProPay though.
Cathy
Private Reply to Cathy Wagner | | Sep 27, 2006 2:33 pm | | re: If you use PayPal, you should read this | # |
Lisa Braithwaite | | Cathy, there is no membership required of my customers for me to use ProPay. (In fact, PayPal has not required customers to have a PayPal account either, for some time now.) My customers have no interaction with ProPay at all.
They use their credit card in my shopping cart like any other e-commerce site, and they're done. They don't go to the ProPay site or have any knowledge that ProPay exists! I then process the cards manually when I receive the order. Or, if I'm taking credit cards at a show, I can process the card by phone at that time.
If you don't have a shopping cart, you can also send an e-mail payment request to your customers, where they enter the information themselves on the ProPay site.
I highly recommend using ProPay.
LB
Lisa Braithwaite
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Public Speaking and Presentation Skills Coaching
www.coachlisab.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Elle B. - Adornment for Uninhibited Women
www.ellebstyle.comPrivate Reply to Lisa Braithwaite | | Sep 27, 2006 8:02 pm | | re: re: If you use PayPal, you should read this | # |
Cathy Wagner | | Thanks for this information Lisa!
CathyPrivate Reply to Cathy Wagner | | Sep 27, 2006 8:27 pm | | re: If you use PayPal, you should read this | # |
Lisa Braithwaite | | I hope you're able to find another processor soon!
LB
Lisa Braithwaite
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Public Speaking and Presentation Skills Coaching
www.coachlisab.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Elle B. - Adornment for Uninhibited Women
www.ellebstyle.comPrivate Reply to Lisa Braithwaite | | Oct 05, 2006 1:28 am | | re: re: If you use PayPal, you should read this | # | 
Sarah Hebert | | As a new home business owner I am greatful to have read this information. Thank you all for your posts and options. I will now know to check around until I find a method that matches my needs instead of just "settling" for paypal since they are so recognizable. Thanks all!
Sarah Hebert
www.cuddlebug.scent-team.comPrivate Reply to Sarah Hebert | | Oct 07, 2006 5:41 pm | | re: re: re: If you use PayPal, you should read this | # |
Denise Nero | | I am having a situation with paypal with being overcharge. I am being charged at 2.5% and they having been charging me more like 3.5% and I never thought to look into this until I read this thread. I have written to them to see what they are going to do about it and this will determine if I stay with them or not.
Denise
http://www.fitnessandkids.com
Private Reply to Denise Nero | | Oct 09, 2006 6:21 pm | | re: re: re: re: If you use PayPal, you should read this | # |
Cathy Wagner | | Thanks for your comments Sarah and Denise. I am so glad this information is helping people and encouraging them to look the best solution.
CathyPrivate Reply to Cathy Wagner | | |
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