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Thread: Paypal allows sellers to choose buyer's payment method. Is this new?

  1. #1
    Join Date
    May 2015
    Posts
    3

    Default Paypal allows sellers to choose buyer's payment method. Is this new?

    Greetings all. Luckily my damage was limited but anger at the lack of disclosure and the backhanded method of implementation led to a google search that brought me here.

    A long time ago I sold a car that was paid via Paypal which entailed linking a bank account which I was naive in thinking that a large well known company like Paypal would never do anything unsavory or undisclosed with such a heavy responsibility. I left some money in the account because it turned out to be very handy, and never bothered unlinking my bank account so I could easily send cash if needed with no fees.

    The shocker came yesterday when I ordered an item on Ebay and instead of getting a screen to pick my payment method I got a popup telling me the transaction concluded successfully! Opening Paypal I discovered the money had been pulled from my bank account instead of the credit card I had planned on using.

    I called PayPal and it was explained to me that it was the seller's fault and I need to talk to them. I asked how it could be the seller's fault and was told sellers have an option to set a preference for cash payment and only accept credit card if no cash is available. I still think it is PayPal's fault for setting up such an option and told her so as I was hanging up in disgust. I was unable to un-link my account due to the pending transaction so I called my bank.

    My bank told me the only option I have is to withdraw all immediate funds and have the account closed before they initiate the withdrawal. He went on to inform me that PayPal has it set up in such a way to have free legal access to my funds whether I have the account linked or not, which I would have done if I would have paid the bills on time this month but I don't have time to get set up with a new bank so I have to swallow this one.

    The seller is one I have used and been happy with in the past, and even worked with on another cancellation when I ordered the wrong item. While I was on the phone I requested an order cancellation on this one and sent the seller an email explaining the reason and that I would re-initiate the order when I have it set up to pay via credit card. His response was to initiate an "order shipped" notice faster than he ever had in the past and reply that he was sorry I was unhappy but I should like the item I am receiving.

    I guess all that is really left to do is blow off steam (which I just did) and leave some appropriate feedback when this final transaction is complete. I was wondering, however, whether this is something new and whether Ebay or PayPal make it clear that the small fee they save for setting up a transaction this way can have major ramifications for the buyer. Thank goodness the impact on me was not major but as they say, "It is the principle of the thing."

    Cheers!

  2. #2

    Default

    I have had the same thing happen to me and I think most people has if you don't look closely at your payment options. PayPal seems to have bank accounts set as the default so if you want to pay with a credit card you will have to update this for every purchase and not just once. Sneaky little bastards. My guess is that they do this to avoid having to pay credit card processing fees.

  3. #3
    Join Date
    May 2015
    Posts
    3

    Default

    Quote Originally Posted by NYcashcow View Post
    I have had the same thing happen to me and I think most people has if you don't look closely at your payment options. PayPal seems to have bank accounts set as the default so if you want to pay with a credit card you will have to update this for every purchase and not just once. Sneaky little bastards. My guess is that they do this to avoid having to pay credit card processing fees.
    Thanks, but that is not what happened. It does not matter what you choose, the seller (who is the one who ultimately pays the credit card transaction fee from Paypal) has made the choice for you and Paypal will over-ride any choice you make based on seller preference. Apparently when you give them your account number you have given them permission to access your funds if needed at their discretion. According to a bank manager they can and have even taken the funds out of accounts that are no longer linked and they do it legally.

    I suggest to any buyer if they have ever linked a bank account to close that account and open a new one. I had never heard of such policies which is why I asked if it is new. According to the bank manager he is VERY familiar with the issue and advises not to ever give Paypal a bank account number because they have set up a cannot-lose situation for themselves. The people hit the hardest are purchasers of vehicles or big ticket items that the seller wishes not to pay the credit card transaction fee. I am not sure how they present the option to the seller but I would not be surprised if they do it in such a way that it may not be readily apparent that they can do serious damage to their buyer's financial status by exercising this option.

  4. #4

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    This is partly the reason why lots of people do not want to add their bank. We don't like adding it either because if they decide to pull funds, if any money so happens to get reversed by PayPal. Those funds will not be reversed back to the bank, they will go back to your balance. Now you will need to withdraw all that back and hope no limitation is placed before doing so.
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  5. #5
    Join Date
    May 2015
    Posts
    3

    Default

    It would have happened again today if I would not have closed the account, but the ensuing emails fully confirm what my banker told me.

    I unlinked and removed the account from paypal and closed it over a month ago to make sure they could not access the account. Yesterday I paid for some domain renewals and my credit card was selected because it was the only payment source I left with Paypal. Today I got an urgent email from paypal informing me that my bank declined the cash transfer and urging me to update them with new account information. Yea right?!!!! LOL

    If I would have simply removed the funds I would have got hit with a bounced check fee. This is a blatant invasion of our funds and even though Paypal has found a way to do it legally it only indicates they are exploiting a weakness in the law (and blaming the seller when people complain). I am generally against regulation but this is a case buyer should have full control over how they choose to pay for something and a bank account should require specific permission for EACH TRANSFER. At the very least there should be full disclosure in plain language warning people of the potential problems that can ensue by giving your account info to Paypal.

    I have a feeling that a lot of people who assume that they accidentally forgot to change the payment source may have actually selected the credit card properly but then fell victims to this policy. I have not encountered many sellers who exercise this option so it would not happen that often. I have made dozens of purchases and only had it happen these two times, but if this is a new policy I might expect it to turn into a bigger problem as time goes on.

    [edit] Side note: The seller who dismissed my concerns was apparently more concerned with bad ratings. They offered me a full refund if I removed by bad rating in which I left a warning for others. I declined their offer and told them (again) what I thought of their actions and that I would not change a rating until they change their policy. When I was at Ebay I noticed a previous item I had bought from them was still awaiting feedback so I left another review on that item. To save a few pennies this company lost a a repeat customer and got two bad reviews.
    Last edited by mralaska; 06-12-2015 at 09:13 AM.

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