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Market Harmony
Penny Hoarding Member
USA
699 Posts |
 Posted - 06/24/2009 : 18:26:26
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As if eBay fees weren't bad enough, you've got to read this [expletive] email I received today from PayPal. I can't believe this [expletive]! 
"An important change to your PayPal account
Hello Market Harmony,
Your business is important to us, and we are working hard to provide an easy, fast and secure payment service to you and your customers while keeping our prices competitive. We're also committed to clearly communicating changes to our policies and procedures. To that end, we are writing to inform you of a change to your PayPal account, which will take effect 30 days from the date of this email.
Beginning 07/25/2009, a small percentage of the total payments you receive will be held temporarily as a reserve in your account. This small reserve amount helps to ensure that funds are available to cover payment reversals or buyer chargebacks, if you do not have a sufficient PayPal account balance and do not provide the funds to do so.
A reserve is like a security deposit for your PayPal account and is standard practice in the payments industry, especially for retail segments like Coins & Paper Money where there is a higher-than-average risk of reversals or chargebacks. This does not mean that you have done anything wrong. We are requiring a small reserve in your account because you sell in a category that has a higher risk of reversals and chargebacks and because you are relatively new to PayPal as a seller.
Your reserve amount will be 10% of the total payments you receive, which will be held on a rolling 60-day schedule. That means 10% of the money you take in each day will be held in your account, and then made available for withdrawal 60 days later.
For example, if you receive $2,000 every 60 days into your PayPal account, then a reserve amount of about $400 would be required on a rolling 60-day period. In other words, about $6.67 would be held in reserve each day, then released 60 days later.
If you are a PayPal Money Market Fund customer, you will still earn interest on your total balance while your money is in reserve. Click here for more information or to enroll in the PayPal Money Market Fund.
We recognize this is a change in the way we do business with you. By requiring some merchants to reserve money in their accounts, we're able to lower our own costs. Keeping our costs low helps us to continue providing competitive pricing for all sellers who use PayPal.
If you have any questions about this change, please call us at 1-877-729-7252. We appreciate your business and look forward to a continued partnership.
Sincerely,
PayPal"
OUCH!!!! 
As a side note:
I called the number, but it immediately asked for the last 4 digits of my credit card associated with the account... I hung up the phone and will go directly to the PayPal sight to confirm the phone number first. I don't trust these kinds of emails, and I kindly suggest that nobody trust emails with phone numbers in them.
Thanks for the vent. I feel a little better.
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Market Harmony
Producer of rare and unique Gold, Silver, and Copper bullion products. Also offering PM refining services. |
Edited by - Market Harmony on 06/24/2009 18:28:05 |
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Country
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 06/24/2009 : 18:41:16
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| Sorry to hear about this PayPal problem. It seems as if PayPal is getting a raft of chargebacks from buyers using credit cards and does not want be stiffed with the float. Instead, they want the sellers to handle their float problem. PayPal is probably adding a pad to their estimated chargeback float thereby taking even more money from the sellers' gross receipts (thereby increasing profits for their bottom line). What do they pay on their PayPal Money Market Fund? I'll bet it's 0.5% or less. They really are greedy!! |
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Neckro
1000+ Penny Miser Member
Saudi Arabia
1595 Posts |
Posted - 06/24/2009 : 18:42:42
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| Paypal is owned by Ebay, that should explain more then enough. |
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Bluegill
1000+ Penny Miser Member
USA
1480 Posts |
Posted - 06/24/2009 : 18:46:45
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I was an active seller on ebay a few years ago. After ebay starting making paypal mandatory I got an email. It stated because I wasn't active if I resume selling they were going to hold all payments for 30 days in case there was a "dispute". They wanted the funds to be available for refund for those 30 days.
That was the straw that broke the camels back with me. I sent them an email telling them to go f%^$ themselves and closed my account.
No regrets. 
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Market Harmony
Penny Hoarding Member
USA
699 Posts |
Posted - 06/24/2009 : 19:16:48
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I called the customer service line, and the email was authentic. They could do nothing for me over the phone. Instead, they put in a request to the merchant service dept. and suggested that I write an email. Here it is:
Hello,
I was shocked to receive an email today from PayPal regarding a change to my business account. I have called the customer support phone number to confirm that this email was authentic.
Beginning July 25, my account will have a 60 day reserve on all transactions. Simply put, this is unacceptable. I do have a merchant credit card account with my bank which will not have any type of reserve associated with transactions. This new practice by PayPal is not good for my business, or PayPal's. My option to stop using PayPal altogether seems to be the only course of action to take, unless action is taken by PayPal to stop this reserve on my account.
I request that this rolling reserve is not associated with my account. For the first 7 months from opening this business account with PayPal, I have had no reversals, charge-backs, or refunds. My account has been in good standing during this whole period. Many of the transactions are associated with my eBay account, in which I am proud to have a 100% positive feedback rating. I feel that this practice of forcing a reserve on me will unduly stress my small company. It is hard enough to survive and grow. When additional stress is added to my business practice, then I am personally inclined to find an easier alternative. I have enjoyed the ease of use and straight forward approach up to this point. But I am not at all satisfied with this new approach to one of your growing customers. It will tie up cashflow and add to the accounting procedures. One is money, the other is time. Both are valuable to me. I can only hope that keeping me as a PayPal client is as valuable to you.
Regards,
Michael
Owner, Market Harmony LLC. |
Market Harmony
Producer of rare and unique Gold, Silver, and Copper bullion products. Also offering PM refining services. |
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CopperSnake
Penny Sorter Member
84 Posts |
Posted - 06/24/2009 : 20:00:53
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welcome to doing business the half assed way, ie: ebay and/or paypal merchant services which in the end will own you up and down for the honor of using their "service".
You need to get yourself a real merchant account with your bank and never look back. not trying to sound harsh but let's be honest, paypal is not meant for "real" businesses, it's meant for little old ladies selling beanie babies and crochet patterns on ebay |
I currently have no signature. |
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natsb88
1000+ Penny Miser Member
USA
1295 Posts |
Posted - 06/24/2009 : 20:01:31
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| Great email Michael. Hopefully they will take you out of the program. I haven't run into this yet, but I will definitely keep an eye out for it as my sales in the Coins & Paper Money category increase. |
Nate
The Copper Cave
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natsb88
1000+ Penny Miser Member
USA
1295 Posts |
Posted - 06/24/2009 : 20:05:03
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quote:
Originally posted by CopperSnake
welcome to doing business the half assed way, ie: ebay and/or paypal merchant services which in the end will own you up and down for the honor of using their "service".
You need to get yourself a real merchant account with your bank and never look back. not trying to sound harsh but let's be honest, paypal is not meant for "real" businesses, it's meant for little old ladies selling beanie babies and crochet patterns on ebay
If you read his response, you'll see that he already has one. Sellers accept PayPal for the convenience of the buyer, not necessarily for their own convenience. Although on a small scale, PayPal's fees are comparable to most banks' credit card fees.
quote:
Originally posted by Market Harmony
I do have a merchant credit card account with my bank which will not have any type of reserve associated with transactions.
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Nate
The Copper Cave
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CopperSnake
Penny Sorter Member
84 Posts |
Posted - 06/24/2009 : 20:07:50
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| well then, it's obvious what I would do and it wouldn't involve future business with paypal :) |
I currently have no signature. |
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NDFARMER
Penny Hoarding Member
USA
548 Posts |
Posted - 06/24/2009 : 20:20:21
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| I used to do a lot of selling on Ebay but now with their increased fees and mandatory Pay Pal I haven't sold anything on Ebay for over six months. If you are selling a lower priced item like pennies they take all the profit, I looked at selling some the other day and it was going to cost me 15% so I didn't. |
COPPER - the "poormans" precious metal!!! |
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highroller4321
1000+ Penny Miser Member
USA
1971 Posts |
Posted - 06/24/2009 : 21:57:01
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Wow, this is ridicoulus!
Someone needs to start a new company like paypal... |
Copper penny Investing
www.portlandmint.com |
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dakota1955
Penny Hoarding Member
801 Posts |
Posted - 06/24/2009 : 22:14:21
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| Keep us posted on the outcome. I have to agree that this new move doesn't seem right. |
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Gr33nday43
Penny Hoarding Member
Uzbekistan
885 Posts |
Posted - 06/24/2009 : 23:52:35
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quote:
Originally posted by highroller4321
Wow, this is ridicoulus!
Someone needs to start a new company like paypal...
I am in no way affiliated with this site, but here's one I found on paypalsucks.com...
http://www.merchantinc.com/ |
Rand Paul for 2010 KY Senate Race - http://www.randpaul2010.com
HR 1207 - 313 Cosponsors 72% of house
S 604 - 30 Cosponsors 30% of Senate
Audit the Fed amendment has passed committee!
"My friends, we live in the greatest nation in the history of the world.
I hope you'll join with me, as we try to change it." -- His Excellency Barack Hussein 0bama, Head of Government,
Duce of Socialism, and Founder of the Empire.
Alcohol didn't cause the high crime rates of the '20s and '30s, Prohibition did. And drugs do not cause today's alarming crime rates, but drug prohibition does. – US District Judge James C. Paine, addressing the Federal Bar Association in Miami, November, 1991
http://coppermillions.blogspot.com/
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Neckro
1000+ Penny Miser Member
Saudi Arabia
1595 Posts |
Posted - 06/25/2009 : 00:21:08
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| I guess they're trying to hedge against fly by night scam business's |
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Pennyworth
Penny Sorter Member
USA
82 Posts |
Posted - 06/25/2009 : 01:00:14
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| That is not acceptable. His account is in good standing and he should not have to have any of his money held for 60 days. I sold on ebay for 10 years and I enjoyed. I took a two year break and came back this year and a lot had changed. I don't like selling on there any more. I have tried to find buyers locally for some of the items I have. Ebay/PayPal have exceeded greedy...they are THEIVES, ripping off the sellers so to speak! |
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Gr33nday43
Penny Hoarding Member
Uzbekistan
885 Posts |
Posted - 06/25/2009 : 01:16:01
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| The bad thing is that they have such a large market share of the auction business that no one can really compete with them. Hm...I wonder if an antitrust would arise out of this in the coming years? It is so hard to start a site like eBay, because the buyers aren't being charged fees and the seller does not want to go to another site where there are no buyers... |
Rand Paul for 2010 KY Senate Race - http://www.randpaul2010.com
HR 1207 - 313 Cosponsors 72% of house
S 604 - 30 Cosponsors 30% of Senate
Audit the Fed amendment has passed committee!
"My friends, we live in the greatest nation in the history of the world.
I hope you'll join with me, as we try to change it." -- His Excellency Barack Hussein 0bama, Head of Government,
Duce of Socialism, and Founder of the Empire.
Alcohol didn't cause the high crime rates of the '20s and '30s, Prohibition did. And drugs do not cause today's alarming crime rates, but drug prohibition does. – US District Judge James C. Paine, addressing the Federal Bar Association in Miami, November, 1991
http://coppermillions.blogspot.com/
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HoardCopperByTheTon
Administrator
USA
5253 Posts |
Posted - 06/25/2009 : 01:30:04
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Did you ask them about FDIC insurance? Seems this is a very risky place to leave your money. The government might not even consider them too big to fail.
Perhaps they should allow fair competition and allow many alternative payment methods. If their pricing is "competitive" as they say, there should be no need to make their payment method mandatory.
Wow, Coins are a higher risk category for chargebacks. Guess you better stop selling them on ebay and reduce your exposure. Who wants to sell anything on eBay anyway when they are setting you up to be scammed by unscrupulous buyers?
Like NDFARMER, I virtually elimated my eBay presence a year or so ago when they jacked up their fees just one too many times for me.
Excellent letter you sent to them Michael. Did you get the autoresponse yet? 
The eBay/PayPal motto: You do all the work and take all the risks, we make all the profits.  |
If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Let me see if I understand this? If you cross the North Korean border illegally, you get 12 years hard labor; the Iranian border illegally you are detained indefinitely. If you cross the US border illegally, you get a driver’s license, a social security card, welfare, food stamps, free health care!
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buyingsilvers
Penny Collector Member
437 Posts |
Posted - 06/25/2009 : 15:42:57
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| make sure its real. Granted, I'm not a huge seller on ebay, but I have received no such email. |
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El Dee
Penny Collector Member
USA
394 Posts |
Posted - 06/25/2009 : 16:36:06
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quote:
Originally posted by Market Harmony
As a side note:
I called the number, but it immediately asked for the last 4 digits of my credit card associated with the account... I hung up the phone and will go directly to the PayPal sight to confirm the phone number first. I don't trust these kinds of emails, and I kindly suggest that nobody trust emails with phone numbers in them.
Thanks for the vent. I feel a little better.
ALWAYS forward a questionable one to spoof@paypal.com to see if it is real. |
Trust the government? Ask an Indian. |
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Market Harmony
Penny Hoarding Member
USA
699 Posts |
Posted - 07/01/2009 : 19:58:38
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Ok, I finally got a response from PayPal today... 1 week after writing to them. Here it is:
Dear Michael,
Thank you for contacting PayPal, my name is Ryan and I am happy to
assist you today.
Michael, we appreciate the time you've taken to write us with your
comments about the reserves that have been added to your account.
I apologize for the inconvenience that they are causing you. Although
we are unable to remove the reserves, I will be sure to pass your
feedback along to management.
PayPal continuously strives to provide you with the highest quality
website features and navigation system. We carefully consider every
feedback email we receive and appreciate your suggestions.
Thank you very much for your feedback. We value your business.
Don't forget, we're always around if you need us. Just click "Help" in
the top right corner of any PayPal page to visit our improved Help
Center.
Sincerely,
Ryan
Merchant Solutions
PayPal, an eBay Company
So I wrote back immediately:
Hello,
The response is appreciated, but the action is lacking. I have made phone calls, and this is now my 3rd email to PayPal. I would like an official response from a manager regarding my account status.
The reserve on my account is unacceptable. Unless it is removed prior to July 25, I will be cancelling my PayPal account.
Regards,
Michael
I just cannot agree to this action being taken by PayPal. I'm so charged up about this that I want to beginning posting about this experience all over the place. I'm doubting that I will, however, as it will most likely be fruitless.
It just so happened that I received a call from my bank that has the merchant credit card account for me on the same day that I received the first notice. I talked to them about it and they also said that this action was crazy, and reassured me that they never hold reserves on any transactions... and PayPal was trying to claim that this is standard practice. By whom? Booooooo! |
Market Harmony
Producer of rare and unique Gold, Silver, and Copper bullion products. Also offering PM refining services. |
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dakota1955
Penny Hoarding Member
801 Posts |
Posted - 07/02/2009 : 20:43:06
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| hope it can get work out but you may need to stay the course |
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Gr33nday43
Penny Hoarding Member
Uzbekistan
885 Posts |
Posted - 07/02/2009 : 22:11:35
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Marketharmony,
Really sorry to hear that PayPal isn't listening to you. I know that if they do this to too many people it could really put a dent in their profits. I hope they left the reserves.
Taylor |
Rand Paul for 2010 KY Senate Race - http://www.randpaul2010.com
HR 1207 - 313 Cosponsors 72% of house
S 604 - 30 Cosponsors 30% of Senate
Audit the Fed amendment has passed committee!
"My friends, we live in the greatest nation in the history of the world.
I hope you'll join with me, as we try to change it." -- His Excellency Barack Hussein 0bama, Head of Government,
Duce of Socialism, and Founder of the Empire.
Alcohol didn't cause the high crime rates of the '20s and '30s, Prohibition did. And drugs do not cause today's alarming crime rates, but drug prohibition does. – US District Judge James C. Paine, addressing the Federal Bar Association in Miami, November, 1991
http://coppermillions.blogspot.com/
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Market Harmony
Penny Hoarding Member
USA
699 Posts |
Posted - 07/08/2009 : 21:09:42
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The latest emails from PayPal to me and me to PayPal:
PayPal to me:
Dear Michael,
Hello my name is Angela, I am responding to your inquiry regarding the
reserve which will start on July 9, 2009.
Like a lot of financial companies, we’re going to start holding a small
percentage of the total payments you receive – a reserve. In a
nutshell, a reserve is a percentage of the money you take in that’s held
in your account temporarily to help make sure you can cover transaction
liabilities like reversals or chargebacks.
Your reserve percentage will be 10%, and we’ll hold it on a rolling
60-day schedule. That means 10% of the money you take in each day will
get held, and then released 60 days later. And while we know this is a
significant change, tough economic times mean that we, too, have to be
more prudent.
Further information on reserves can be found in our Help Center. To
access the Help Center, click the "Help" link at the top of any PayPal
webpage. This decision will remain in place at this time.
Thank you for being a valuable member of the PayPal community.
Sincerely,
Angela
Merchant Solutions Senior Specialist
PayPal, an eBay Company
my response to PayPal: (sorry, it's a bit long)
Dear Angela,
Perhaps you misunderstood me:
1) I have contacted my own financial institutions, both on a personal basis and via telephone conference to discuss a reserve balance on my account with them and the potential for a reserve to be placed in the future. They all respond with a, "No" I cannot accept your statement, "Like a lot of financial companies, we’re going to start holding a small percentage of the total payments you receive – a reserve" I cannot find any evidence of this happening personally, or with any of the other business owners with whom I am in regular contact.
2) By holding a reserve on my account, PayPal is causing added costs to be incurred by my business. Not only is cashflow tied up, but there will be increased accounting. For a small business like mine, how can I justify continuing to do business like this? My company works on a cash basis, not accrual. When the goods are shipped, or money received, then the transaction is recorded. I do not plan to alter my accounting basis. By adding additional transactions, such as a reserve balance being issued to or taken from my PayPal account, I am in effect adding time and cost to track these transactions on my books. Please tell me how this new procedure is going to be of any help to me. I fail to see any benefits.
3) "Tough economic times" How dare you! You get to sit at your desk and read emails like what you are reading now and get to say something like that to person who is trying to make something of themselves. If you want to talk of tough economic times, you are welcome to open up your own business and try to deal with a payment processor undeservingly placing reserves on your own transactions. You can deal with cashflow. You can deal with accounting. The thing is, Angela, I have my doubts that you even know what those tough economic times that you speak of, really are. Please put yourself in my shoes for a moment. I'm at your mercy here. I know this. I'm not trying to sound demeaning in any way, but this is business. I'm running one and I need to keep cashflow issues and operations costs at a minimum. I cannot accept the reserves being placed on my account. I hope you can understand the crucial importance that this is to me.
I have alluded to the fact that I am in contact with many other business owners. In fact, the vast majority of them are also dealing in the same goods (coins and currency) with which I deal. I have been consulting with them since I received the initial email from PayPal regarding a reserve on my account. The odd thing that I have found is that none of them have received the same email that I have received. Some of them are eBay powersellers, some of them hold their own web-based store with shopping cart software that accepts PayPal, and some of them sell less than my company. They all are dealing in a similar manner as my company. The general response from them is shock, sympathy, assurance that this practice doesn't seem right, and 100% of them support me in my decision to continue to write to you in order to have this reserve to not be associated with my account. But, my time is valuable to me, and writing these email seems to be a waste of that time. Perhaps you can prove me wrong.
Angela, my only hope is that you can get this reserve taken off of my account. I will have to stop using PayPal for the majority of transactions if the reserve is placed on my account. This is not an emotional response from an angry client. I have to make a business decision based on how my company operates. I have always enjoyed my PayPal experience and I want to continue to do so. I also enjoy running my business and receiving feedback of satisfied clients. In fact, I have 100% positive feedback with a history of zero returns or chargebacks. My business is growing rapidly. I have just expanded production capacity and my product line. My total sales growth from year end 2008 to today, halfway through 2009, is already 90 times what I have sold in 2008 altogether. PayPal has the opportunity to either make money from additional transactions generated by me, or to make a very small amount by holding a 10% 60 day reserve on my transactions. I can 100% guarantee you that PayPal will lose out on the added transactions that could be generated by me if the reserve is placed on my account. I absolutely must reduce my PayPal transactions and go with the alternative if this reserve is placed on my account. Ultimately, you are left with 2 choices:
1) Keep the reserve on my account- you get to hold 10% of my reduced total amount of transactions for 60 days. You will make less based on total transaction fees as I will be forced to reduce the total number of PayPal transactions. The amount of any possible reserves will therefore be very low, and for PayPal, will not even be worth holding.
or 2) Keep my account free of reserves- you make the upfront transaction fees on an increase in activity. More transactions by me means more transaction fees going to PayPal. That is your business model.
I would be happy to send more business to PayPal in the upcoming months and years... as long as there is no reserve on my account. A reserve being placed on my account will send a signal to me that I am not an important client to PayPal, and therefore my online transactions will go to someone else that does find my business important to them. Angela, if the choice is yours, then do what is right. If the choice is not yours, then take my account to a decision-maker and tell them what the right decision is to make.
Humbly Yours,
Michael
I think this is the last email by me to them regarding this. Writing more will just mean spinning my wheels. This reserve on my account is ridiculous and they will certainly lose out on the bulk of my business with them. I have until July 9 (I thought it was supposed to be the 25th according to the first email) until the reserve takes hold. I'll keep this thread updated. |
Market Harmony
Producer of rare and unique Gold, Silver, and Copper bullion products. Also offering PM refining services. |
Edited by - Market Harmony on 07/08/2009 21:11:44 |
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oober
1000+ Penny Miser Member
USA
1051 Posts |
Posted - 07/08/2009 : 21:28:41
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I haven't read this whole thread, but this is all just a ploy to make money off our funds... Interest on these "cough cough" reserve funds can add up to millions of dollars in income each yr...
You would think these guys are making enough cash... |
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JerrySpringer
Penny Hoarding Member
614 Posts |
Posted - 07/08/2009 : 21:28:48
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| If they make state sales tax mandatory to collect for online auction sales, how much do you think that will mess with the profits for Ebay? This will be interesting to watch. The margins for sellers' profit and buyers' competing bids keep prices in tight ranges. Tacking on sales taxes will lower final bid prices IMHO or just turn off buyers possibly. |
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CoinHunter53562
Moderator
USA
1754 Posts |
Posted - 07/08/2009 : 23:52:16
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| Wow....sounds like Paypal has made up their mind and won't budge. If you want to look at other avenues for a merchant service provider, I am using one and can give you more info. Just let me know if you are interested. The only drawback is customers have to give you their cc info, so I don't know how yours will feel about that. Also, there is a monthly fee of $10-$20 or so depending on your volume, plus of course the percentage from the actual transactions. |
My hobby: collecting real money 1 copper cent or nickel at a time.
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Grrrrrrr..... PayPal taking a bite
