Is Ebay's 21-Day Hold on Sellers' PAYPAL Funds Illegal?

Posted in the Chicago Forum

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Seller

United States

#1 Apr 22, 2013
This practice ties up payments that sellers have received and gone ahead and shipped INDEFINITELY (it can go beyond 21 days- as if that's not bad enough), greatly inconveniencing Sellers who have to be out the cost of shipping (plus the merchandise) and then sit and wait for 3 weeks for their funds to be released before they can use them. I wonder what Illinois law has to say about this and if anyone has contacted the Attorney General's office about this matter yet.
FormerEbayer

United States

#2 May 9, 2013
There are real questions as to its legality. CNN MONEY Fortune ran an online article on February 24, 2012 that delved into all of this. It was titled EBAY'S PAYPAL PROBLEM and talks about the thousands of angry sellesr after this 21-day hold policy was put in place.
OnlineAuctions

Carthage, TX

#3 May 13, 2013
The latest buzz is that if ebay sellers will contact their state regulators in the states wherein they reside, they can get their Paypal funds freed up.
WebSales

Dallas, TX

#4 May 14, 2013
There may be a large defection of unhappy ebay sellers to other online sites...
NetSeller

Fort Worth, TX

#5 May 17, 2013
Both ebay and Paypal are being inundated with calls from angry sellers, and a look at the ebay Disccussion Boards reveals a lot of angry sellers...
EbaySeller

Hardin, TX

#6 May 20, 2013
Have read online that contacting the Federal Trade Commission about these 21-day holds is also a good move.
OnlineSeller

United States

#7 Jun 2, 2013
Paypal is a money transfer entity and as such has to abide by the laws of the various states. If you contact the state regulators in the state wherein you reside, they will contact Paypal and make them release the holds on your funds. In Florida, for instance, 10 days is the maximum Paypal can place a hold on your funds.
LegalAspects

Euless, TX

#8 Jun 9, 2013
An attorney wrote a very good article about how to combat the 21-day holds and posted it on one of the PayPal Discussion Boards. Here's the link: https://paypal-community.com/t5/How-to-use-Pa...
purrvert

Madison Heights, MI

#9 Jun 9, 2013
Don't like ebay's policies???

Then...DON'T USE EBAY!!!
Analyst

United States

#10 Jun 18, 2013
Ina Steiner has written a number of good articles about the problems at ebay on ecommercebytes.com
FormerEbayer

Pilot Point, TX

#11 Jun 19, 2013
NetSeller wrote:
Both ebay and Paypal are being inundated with calls from angry sellers, and a look at the ebay Disccussion Boards reveals a lot of angry sellers...
Take a look at this blog: ebayhorrorstories.wordpress.com
FormerEbayMom

United States

#12 Jun 20, 2013
I got so fed up with ebay that I'm back to doing consignment stores and yard sales. My kiddos love helping me put on a yard sale too!
David

Clinton Township, MI

#13 Aug 19, 2013
purrvert wrote:
Don't like ebay's policies???
Then...DON'T USE EBAY!!!
easier said than done!! I am doing ebay for 12 years now. I have invested in my business close to 500k. I am trapped. I would quite if it was possible for me. i am going to gradually liquidate and try to get out of it with my money. they cost me on average of $3000 a month. I hope to be able to find alternatives. I have been using amazon, and craigslist lately. they are not perfect, but better than ebay. I am very sad for what have become of ebay. I was sure I found my way of life to make living and save for rainny days, but it looks like it is going to come to a stop and I will be left with a lot of years to recover from it.
Observer

El Paso, TX

#14 Sep 8, 2013
erchant account” operato. In the United States, PayPal is licensed as a money transmitter only on a state-by-state basis. Basically, it's a middleman with no access to funds in the real banks.

Ebay owns PayPal and forces sellers on ebay to accept payments from buyers through PayPal.

The biggest challenge for PayPal is an unsustainable business model. Initially, PayPal offered its service with lower cost, planning to earn interest on funds in users’ PayPal accounts (i.e., the “float”).

However, most recipients withdrew their funds immediately. Furthermore, a large majority of senders funded their payments using credit cards, which cost PayPal roughly 2% of payment value, rather than relying on much less with business accounts qualified for seller protection against losses due to chargebacks, provided that they complied with reimbursement policies.

In August 2002, Craig Comb and two others filed a class action against PayPal in, Craig Comb, et al. v. PayPal, Inc.. They sued, alleging illegal misappropriation of customer accounts and detailed ghastly customer service experiences. Allegations included freezing deposited funds for up to 180 days until disputes were resolved by PayPal

The court ruled against PayPal, stating that "the User Agreement and arbitration clause are substantively unconscionable under California law," noting their unjustifiable one-sidedness and explicit prohibition of class actions produces results that "shock the conscience" and indicate PayPal was "attempting to insulate itself contractually from any meaningful challenge to its alleged practices"

Just for fun? Grab a cup of coffee. Google PayPal lawsuits.
you hate the truth

Crosby, TX

#15 Sep 8, 2013
EBAY SUCKS
Voluntarist

United States

#16 Sep 9, 2013
I used to make good money on eBay, I pulled out.
eBay Veteran

Ormond Beach, FL

#17 Oct 31, 2013
eBay is horrible and run by thieves.
Consumer Watch

Springtown, TX

#18 Dec 1, 2013
The situation on ebay grows worse by the day for small sellers.

Since: Dec 13

Location hidden

#19 Dec 1, 2013
It's all about pandering to buyers, and it gets worse all of the time. E-bay and PayPal used to be great, but as so many have clearly stated, they suck.
acline444

Surprise, AZ

#20 Dec 4, 2013
I have been involved with Ebay since 1999. Last year I did over $60k and was able to finance a dream trip. This year my sales have been down and even though I have 100% positive feedback with over 1500, I have become a victim of ebay statistics. Out of 300-400 transactions I got a total of 4 low DSR's the last one being in June. Since my sales volume dropped, the statistics got me. All of a Sudden in October ebay puts restrictions on my account, Paypal is holding money for up to 21 days and after 7 calls to ebay, nothing is resolved. Today I called ebay after I got a message that a buyer picked up their item and were happy with it. According to Paypal, they are still going to hold the payment another 2 weeks because of my low DSR's I get comments like "while you establish yourself as a seller, Paypal may hold your payments up to 21 days" So, I have about $95k in total sales, over 1000 transactions and thats not well established. Go look at my feedback. Ebay either doesn't care, they want to get rid of small sellers, or their system has no equitable way to take care of sellers. I am totally frustrated with this. If anyone else has any comments, recommendations, please let me know. Right Paypal is holding over $2k of my money. I sell some items on consignment and need funds to pay my vendors. Ebay needs to start taking care of the sellers just as much as it does the buyers!

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