PayPal DOES NOT Hate Digital Goods! (facts not a rant)

51 replies
Why You Should Listen to Me...
I opened my PayPal account in 2000. I've had all of two run-ins with their risk/compliance departments in 10 years. I've helped a business associate successfully negotiate the release of $200K in held funds. I'm a PayPal Certified Developer. I know what I'm talking about when it comes to PayPal.

I'm a bit numb from seeing all the misinformation on this board regarding PayPal. Yes, I understand that everyone has their own personal dealings with them, BUT (and this is by no fault of anyone outside of lack of due diligence, on their part).. the reality is that PayPal operates by a set standard of rules.

Granted, it isn't easy for the average online entrepreneur to track down and understand these rules; (much less implement them correctly). Yet, the fact of matter is that it is essential for you to implement these rules into your business model OR you will run into problems.

To that extent, (although I can not guarantee any specific results by you following my leads documented in this post), I decided to put this short but informative post together so that it could be referenced by those NOT wanting to follow misguided, jaded and rhetorical misinformation.

1) The following is a link to a guide published BY PayPal for Digital Goods merchants; (on how to set up best practices when conducting business through the PayPal system).

https://merchant.paypal.com/cms_cont..._Practices.pdf

2) The following is a link to a PayPal page, (on their site), specifically geared towards the benefits to Digital Goods sellers of using PayPal as their transaction system.

https://www.paypal.com/digitalgoods

3) This is a link to an essential part of your PayPal account set up. A link to a page from a free online book; (inappropriately named IMHO); called PayPal Hacks on how to set up your Payment Receiving Preferences.

If you're serious about your business; (which I'm sure you are); then this section in your PayPal account will help minimize your possibilities of running into fraudulent transactions that result in PayPal coming down on you.



Set Your Payment Receiving Preferences / PayPal Hacks. 100 Industrial-Strength Tips and Tools

4) It is also essential that you do not cut any corners when it comes to identifying yourself to PayPal. Correct and verified phone numbers, (land line and mobile), addresses (home and business), email addresses... all play a part in the PayPal review process should your account come across the desk of a Risk Manager.

Any of this information out of place can cause immediate shut downs. Any of this information not easily accessible can (and probably will) cause immediate shut downs and/or limitations.

You have to take into consideration the sheer magnitude of the workload their Risk Managers have to deal with on a daily basis. IF verifying your information takes them outside of their "checks and balance" routine, they're not going to (nor will they be willing to) take the time to double check it and/or spend any time looking for it. They'll just hit the shut'em down switch and move on to their next pending case.

Full Disclosure people. There are NO exceptions. OH, and (unfortunately for you non-Americans) if your business is NOT located in the U.S.; bet your bottom dollar that your verification is 10x more important.

5) Stay in contact with PayPal at all times! I can't stress this enough. Far too many people become complacent in thinking its OK to never contact PayPal unless something has gone wrong. This is a mistake; plain and simple.

Would you never talk to your accountant unless there was a problem? Your bank? Your Doctor? Preventive Maintenance is KEY. Trust me on this.

6) When in doubt, go to the source. Period.
compliance [at] paypal [dot] com

Remember it. Use it.

I sincerely hope this helps those who are savvy enough to consider doing business through PayPal. Unless you're doing a minimum of $10K a month consistently; there is ABSOLUTELY NO REASON for you to consider the extra expense of a merchant account; (I've been there too -- I know).

Also, even when you're considering a merchant account; (and this shows how diligent they are); use PayPal. PayPal Payments Pro charges you a measly $20 per month for their merchant account set up AND you can suspend the monthly fee when you don't need the added volume protection.

Peace, Love & Prosperity (people)
tecHead


Disclaimer: By no means is this post intended to be, nor should you consider it to be, legal and/or accounting advice. You should always consult a professional Lawyer and/or Accountant in regards to your business operations. The intent of this post is purely for educational purposes.
#digital #facts #goods #hate #paypal #rant
  • Profile picture of the author Steven Wagenheim
    Maybe this will alleviate some of the hysteria that has been going on around
    here.

    I don't remember when I actually got my PayPal account, but my first
    activity was July 26, 2001. That makes this past July 26 nine years that I
    have been actively doing business with them.

    In all that time, I have yet to have ONE problem. I call them occasionally,
    just to check up on things, make sure that all my ID info is up to date and
    don't do anything that is going to raise any red flags.

    If I'm going to do a launch or expect to get more money than usual, I call
    them and let them know.

    PayPal doesn't just shut people down for no reason. There is always a
    reason. It could be the most innocuous thing...to you...but as Techhead
    said, if one little thing is out of place, they don't have the time to mess
    around with you. You're history...end of story.

    This is why, if you're not going to dot every I and cross every T, you
    better have at least one payment processor as a backup. Hell, you
    should have at least one anyway. I have one but am thinking of adding
    another.

    You can NEVER be too careful.

    Stuff happens.
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    • Profile picture of the author tecHead
      Originally Posted by Steven Wagenheim View Post

      ...

      This is why, if you're not going to dot every I and cross every T, you
      better have at least one payment processor as a backup. Hell, you
      should have at least one anyway. I have one but am thinking of adding
      another.

      You can NEVER be too careful.

      Stuff happens.
      Agreed, Steven; always have a backup. Its the same mentality as if you've got more than $100K in liquid funds, you need more than one bank to house your capital; (FDIC only insures $200K and they JUST amended that rule as a result of the bailouts -- before it was only $100K).

      I am currently looking into Amazon's solution; as they're about the only other third-party model I'd trust with my money due to their established history.

      PLP
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  • Profile picture of the author Janice Sperry
    Thanks for a very detailed list of accurate suggestions. PayPal threads on forums always seem to get started by someone that has just had a problem so the issues always look exaggerated. I have used PayPal for my business since 1999 and have never had a single problem. I try hard to be compliant knowing that most of their rules and regulations are also for my protection. My "volume" has not been as much as others so that also may be a reason for not having problems.
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    • Profile picture of the author tecHead
      Originally Posted by Janice Sperry View Post

      Thanks for a very detailed list of accurate suggestions. ... My "volume" has not been as much as others so that also may be a reason for not having problems.
      You're more than welcome. I try to thwart misinformation where I can.

      Volume, (unless seriously altered in a short period of time abruptly); rarely will raise any flags. I mean, think about it... the more volume you do the more money they make, right?

      And for those that advocate a merchant account over the use of PayPal; sudden changes in volume are handled the exact same way with merchant account, (sometimes even more severely).

      This is why part of the application process for a merchant account is the question of "how much volume do you expect to do each month?"

      PLP
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      • Profile picture of the author Chris Grable
        TecHead,

        Thanks so much! Great information... and it answered a lot of questions. Based on your guidance, I logged into my account to verify that my profile info was up to date. I can't believe how much of it was old and or had never been added. I was, likely, an accident waiting to happen.

        Thanks again!
        chris
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        • Profile picture of the author tecHead
          Originally Posted by Chris Grable View Post

          TecHead,

          Thanks so much! Great information... and it answered a lot of questions. Based on your guidance, I logged into my account to verify that my profile info was up to date. I can't believe how much of it was old and or had never been added. I was, likely, an accident waiting to happen.

          Thanks again!
          chris
          Glad to help, Chris.

          Yeah, there are a lot of "accidents waiting to happen" unfortunately. Its partially PayPal's fault, though and their originally adopted business model that seems to have filtered over to eBay, post purchase.

          I'll see if I can find the actual quote, but I can remember one of the founders, (Theil -- if I spelled his name right), made a public statement back in '01 or '02 something to the extent of... "(paraphrased)... we'd rather spend the resources we would on Customer Service on building functionality..."

          PLP
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  • Honestly, after reading paypal's merchant best practices, a lot of the fault lie's on Paypal and is probably a reason why they aren't setup for online transactions.

    Having both paypal and merchant accounts, it's easy to detect fraud using Maxmind or similar services when I have they credit card billing information and name. However, when facebook handles everything they should be the ones who are screening it (well according to their recommended policies).

    The second big issue, is the vast amount of phishing that goes on with their systems and their inability or lack of blocking it. If accounts are compromised, thats Paypal's fault 100%, its their system, it's their lack of fraud prevention. How hard would it be to incorporate a unique pin number validation on the account, and only allow it to be reset by mail to the original address used when signed up or after manual verification.
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    • Profile picture of the author Chris Grable
      Originally Posted by OnlineMarketingSys View Post

      ... and is probably a reason why they aren't setup for online transactions.
      .............Huh?
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    • Profile picture of the author tecHead
      Originally Posted by OnlineMarketingSys View Post

      Honestly, after reading paypal's merchant best practices, a lot of the fault lie's on Paypal and is probably a reason why they aren't setup for online transactions.
      Then you need to keep reading (additional documentation released by PayPal) because they detail out everything they do on their side to help prevent fraud. Its pretty extensive and would more than likely bankrupt the average business to put in place.

      Originally Posted by OnlineMarketingSys View Post

      Having both paypal and merchant accounts, it's easy to detect fraud using Maxmind or similar services when I have they credit card billing information and name. However, when facebook handles everything they should be the ones who are screening it (well according to their recommended policies).
      Thus setting up your Payment Receiving Preferences in your PayPal account.. you can (and should) set it so you're not accepting transactions from address non-verified accounts. This would be the same thing without the added expense of having to incorporate your own AVS into your sales funnel(s).

      Not many merchant account incorporate international AVS; which is one of the most costly schemes of protection for any business.

      Originally Posted by OnlineMarketingSys View Post

      The second big issue, is the vast amount of phishing that goes on with their systems and their inability or lack of blocking it. If accounts are compromised, thats Paypal's fault 100%, its their system, it's their lack of fraud prevention. How hard would it be to incorporate a unique pin number validation on the account, and only allow it to be reset by mail to the original address used when signed up or after manual verification.
      I'm sorry but, this is very naive; as just as many phishing prevention mechanisms that are put in place there are just as many new phishing attempts made (as well as methods). Your argument is the equivalent of that of the woman who wanted to sue McDonalds for their coffee being too hot because she burned herself.

      It is just as much the responsibility of the Merchant/Consumer as it is of PayPal. As a matter of fact, PayPal actively informs its users that they ONLY send out emails that reference the account holder by First AND Last names; NO phishing attempt can do that (without prior knowledge of the account holder that the account holder has given to the Phisher -- which PayPal nor God can prevent).

      Also, PayPal DOES have a pin system for added security; (look it up). Its YOUR responsibility to use it or not; not theirs to make it mandatory. Their model is "easy for everyone"; implementing such security measures is NOT 'easy for everyone'... yet, they have it in place.

      Do your research, PLEASE.

      PLP
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  • Profile picture of the author Dheer
    Great info but paypal is really bad ass they just banned my 4 year old account for selling some stuff
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    • Profile picture of the author tecHead
      Originally Posted by Dheer View Post

      Great info but paypal is really bad ass they just banned my 4 year old account for selling some stuff
      "for selling some stuff"... umm.... o.................k
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    • Profile picture of the author Sid Hale
      Let me guess...

      Originally Posted by Dheer View Post

      Great info but paypal is really bad ass they just banned my 4 year old account for selling some stuff
      You were doing business, using a Personal Account?

      Upgrade is free (to Premier or Business account), but they MUST be verified.
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  • Profile picture of the author Ruka
    great post techead, thanks! Useful to set the payment receiving preferences especially.

    I have a couple of questions ...

    5) Stay in contact with PayPal at all times!
    ... Is it a good idea to call before each launch?

    2nd question - I have a friend with bad personal credit who wants to open a PayPal business account - do they shut people down for this?

    cheers!
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    • Profile picture of the author tecHead
      Originally Posted by chickenlittle View Post

      great post techead, thanks! Useful to set the payment receiving preferences especially.
      You're very welcome.

      Originally Posted by chickenlittle View Post

      I have a couple of questions ...

      ... Is it a good idea to call before each launch?
      Yes.

      It shouldn't take you more than 20min.; (once you're on the phone with an actual rep); to inform them of your launch.

      I strongly suggest you call them as far out from the launch, as possible. 2 weeks out is sufficient and then again the day before to verify that your account has been notated.

      Originally Posted by chickenlittle View Post

      2nd question - I have a friend with bad personal credit who wants to open a PayPal business account - do they shut people down for this?

      cheers!
      Unlike merchant accounts, PayPal doesn't necessarily take credit history into account upon account setup; (they may however investigate credit history for some other reason should you prove to be a risk. This will vary on a case by case basis.)

      PayPal takes into consideration that you've already gone through the necessary channels to get your business certified in the appropriate jurisdiction, acquired your EIN (or international equivalent) and verified your credit risk with the bank you attach to your PayPal account, (as well as the Credit Card). This is why they require such information.

      I think its pretty smart; as they don't have to spend the funds to do all that verification themselves.

      HTH
      PLP,
      tecHead
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  • Profile picture of the author MichaelHiles
    I was mistaken in what I thought about FDIC insurance. I got curious and looked up the current rules and the last rule change moved it to $250K PER DEPOSITOR.

    http://www.fdic.gov/deposit/deposits/insured/index.html

    Beginning December 31, 2010 through December 31, 2012, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account, at all FDIC-insured institutions.

    I think it is still good to hedge the bet and keep the cash spread across money market funds or some other readily liquid depository account.
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  • Profile picture of the author Janice Sperry
    Also, PayPal DOES have a pin system for added security; (look it up). Its YOUR responsibility to use it or not; not theirs to make it mandatory.
    I did not even know this was an option. Maybe it wasn't an option years ago when I first set up my account. Anyway I really appreciate knowing this can be implemented.
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    • Profile picture of the author tecHead
      Originally Posted by Janice Sperry View Post

      I did not even know this was an option. Maybe it wasn't an option years ago when I first set up my account. Anyway I really appreciate knowing this can be implemented.
      Yeah, its pretty cool. Check it out...

      https://www.paypal.com/securitykey
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      • Profile picture of the author WritingMadwoman
        tecHead,

        THANKS for taking the time to spell all this out - my one gripe with Paypal is that it's very difficult to find information on their policies and rules within their website - I spend an awful lot of time looking for stuff there and may or may not find it! This guide for digital goods merchants, never seen it there before, is it recent or did they just hide it really well?

        In any case, excellent tips you've provided, I really love Paypal and have never had an issue with them so far.

        Two questions I would love to have clarified:

        - When you say to keep in contact with them regularly, do you mean just call and check on the status of your account? I've never, ever called them because I've never had a problem and I didn't see the point in "bugging them" for no reason like that. Apparently they don't see it as bugging? :p

        - Also, on the screenshot you provided, the button to block payments from non-U.S. Paypal accounts is checked - that means you shouldn't allow sales from other countries? Or am I misunderstanding that somehow? I do get sales from other countries, like some fine Warriors here from the UK and Canada! Not sure I like the idea of blocking them!

        Wendy
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        • Profile picture of the author tecHead
          Originally Posted by WritingMadwoman View Post

          tecHead,

          THANKS for taking the time to spell all this out - my one gripe with Paypal is that it's very difficult to find information on their policies and rules within their website - I spend an awful lot of time looking for stuff there and may or may not find it! This guide for digital goods merchants, never seen it there before, is it recent or did they just hide it really well?
          Hi Wendy... glad to help... and you and me both, Sista; with the gripe about them hording information.

          Back in '02, they limited my account because I pulled funds INto my account from a bank account that wasn't in my name. Told me it was a violation of their TOS. I told them, "There's no reference to this in your TOS."

          They promptly removed the limitation but just as promptly updated their TOS.

          From that point, I decided to do periodic checks for new information. They're like the U.S. Congress and their library... they document everything... they just don't tell anybody where to find that documentation.

          Originally Posted by WritingMadwoman View Post

          Two questions I would love to have clarified:

          - When you say to keep in contact with them regularly, do you mean just call and check on the status of your account? I've never, ever called them because I've never had a problem and I didn't see the point in "bugging them" for no reason like that. Apparently they don't see it as bugging? :p
          LOL... hey, the day you get a rep that tells you, "Why are you calling and bugging us when there's nothing wrong?? Don't you have better things to do?"... you let me know and we'll start a smear campaign together.

          K?

          Originally Posted by WritingMadwoman View Post

          - Also, on the screenshot you provided, the button to block payments from non-U.S. Paypal accounts is checked - that means you shouldn't allow sales from other countries? Or am I misunderstanding that somehow? I do get sales from other countries, like some fine Warriors here from the UK and Canada! Not sure I like the idea of blocking them!

          Wendy
          The screenshot; (not to mention being kinda old); wasn't taken by me, per se. Its on the PayPal Hacks site. Although the information still stands true, the actual screen you see will more than likely be different.

          Also, those in other countries will have varying different options to choose from, as well.

          All that being said; the screen shot is just an example. By no means do I advocate blocking international transactions.

          You just have to take into consideration a couple of things...
          • are the countries you're doing business with OK with USD?
          • are you willing to hold multiple currencies in your account?
          Those and other factors will definitely determine how you set your Payment Receiving Preferences. You should definitely set them in a way that fits your personal business model.

          I'll have to look for it, but (I think) PayPal just implemented a way to do geo-targeting for who you want to accept transactions from; not sure.

          HTH
          PLP
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          • Profile picture of the author WritingMadwoman
            Originally Posted by tecHead View Post


            LOL... hey, the day you get a rep that tells you, "Why are you calling and bugging us when there's nothing wrong?? Don't you have better things to do?"... you let me know and we'll start a smear campaign together. K?
            Yeah -- I should have clarified that my perspective stems from 15 years as a customer service rep and receptionist that received dozens of "unnecessary" calls each day, while people with problems who needed my help had to keep hanging up and calling back to get to me because I couldn't get off the phone with people who were just bored, lonely, or whatever.

            Having that unique perspective I guess is what makes me not call unless I feel it's important enough to take up someone's time.

            But I get your point, they don't mind. Good.

            Also thanks for your thoughts on international sales, I agree. I can't remember how I set up my account, I'll have to go look.

            Thanks for sharing your insights!

            Wendy
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  • Profile picture of the author InternetM39482
    Great post, William!

    Although I've been limited by Paypal, I've almost always got it sorted out fairly fast (being in India doesn't help but even then, never took more than a week to get it all sorted out!).

    The screenshot reminds me of 2006 Paypal!
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  • Profile picture of the author LB
    5) Stay in contact with PayPal at all times! I can't stress this enough. Far too many people become complacent in thinking its OK to never contact PayPal unless something has gone wrong. This is a mistake; plain and simple.
    And what do you suggest people SAY to Paypal?
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    • Profile picture of the author tecHead
      Originally Posted by LB View Post

      And what do you suggest people SAY to Paypal?

      Rep:
      Hello, my name is Samantha. Thank you for calling PayPal Customer Service; may I have your first and last name?

      You: Hey, Samantha my name is Blazee Blip and I just wanted to touch base with you guys about anything new that I might be missing that I might need to be aware of?

      Rep: OH, ok... well, like what exactly would you like to know?

      You: <Fill in your dialog based on your own business model, here>

      I obviously can't tell you what to ask about your business, that would be pompous and arrogant of me to assume I'd even know what to assume.

      The point is to just stay abreast of any new developments that might affect YOUR business model. Going to the source is always the best option; as opposed to happenstance information gathering.

      Even if the Rep gives you web pages to go read; it at least points you to the latest information regarding an intrical part of your business operations.

      HTH
      PLP
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  • Profile picture of the author SageSound
    I originally got an account at X.com, which was acquired by PayPal around 1999. I've had no significant problems with them, and I get pretty tired of all these threads by people who do dumb things and then try to blame PayPal.

    If you're dumb enough to shoot yourself in the foot, it's not much good to go blaming the gun manufacturer!

    I've also had a merchant account, and I'll take PayPal over a Merchant account ANY DAY!

    Merchant accounts are, fundamentally, an APPLICATION FOR CREDIT.

    They are also run by organizations who are basically paranoid.

    They ask about your business, asking you to give them financials that they can use to establish a pattern of what YOU consider "normal" sales to be, then they set up an alarm system that goes off if things exceed those limits, accounting for certain factors based on their own statistical models.

    They will lock your account first and ask questions later.

    If you complain, they'll tell you to read the "fine print" that basically says that if your intention is to fund product inventory or fulfillment out of receipts in your merchant account, you're a fool.

    You'll also see that you are liable for 100% of the earnings paid into your merchant account for a 6-month period. Meaning, if you've earned $10k in your merchant account and need to cover $10k in bills, you'd better not count on the $10k in your merchant account to pay those bills. Because if you take those funds out, they can take them back at ANY time. Yessirree, they have the right to stick their grubby hands into your bank account and pull 100% of those amounts OUT for six (6) months -- without asking or warning.

    If they happen to overdraw your account, oops! It's on YOUR back! Can't cover it? Well, the bank is going to come after YOU! Not the merchant processor.


    In contrast, PayPal accounts are NOT considered an application for credit.

    PayPal does NOT ask about your business practices or "expected revenues", nor do they arbitrarily or intentionally monitor accounts for "excessive" revenues or sales. What's "excessive" without a baseline? $100? $1000? $50,000?

    With PayPal, you are generally NOT liable for the earnings or balances in your PayPal account, except to the extent that you create a liability yourself. In practice, for most IMers, that means if you collect sales revenues and are expected to pay commissions to resellers at a later time, you have created that liability yourself.

    PayPal will NEVER reach into your bank account and pull out an amount equal to 100% of the earnings over 6 months paid into your PP acct (unless it's just one fraudulent transaction and you happen to have the funds in your bank account).

    Various conditions can lead to an "overdrawn" status on your PP acct (actually, a negative balance), but they can NOT overdraft your bank account in an attempt to recover these funds.

    The only thing PayPal really has in common with merchant processors is that they will lock your account if they think something "fishy" is going on. Trust me when I say that PayPal's notion of what's "fishy" is way more liberal than what any Merchant account processor thinks.

    Most of the "PayPal whiners" I've read about are: vendors not based in the US; who make sales to a large portion of buyers outside the US; who get a bunch of complaints quickly; who have had their PP accts open for less than a year; and who seem to "shoot themselves in the foot" and then expect PayPal to accept responsibility for it. (This is a generalization.)

    Anybody who honestly believes a Merchant account is in ANY WAY "safer", "lower risk", or "more reasonable" than PayPal has CLEARLY not read the AGREEMENT papers they signed when they got their Merchant account.

    And to those who make a stink about "PayPal is NOT a BANK" ... well, NONE of the largest 10 or so Merchant processors are banks either. So what? Banks off-loaded merchant account processing years ago due to liability concerns and nasty "conflict of interest" issues. Today, Merchant account processors enjoy a very cushy relationship with banks. They'll both hang you out to dry with no notice or warning.

    In fact, I've known several businesses who had to file emergency Bankruptcy proceedings because they did something dumb and their Merchant processor froze their accounts with no warning, yet continued to allow sales to occur for days. The business owners found themselves with no way to pay to fulfill the orders, and the "fraud" the Merchant processors thought they whiffed became a self-fulfilling prophecy.

    -David
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  • Profile picture of the author tpw
    Thank you to everyone who contributed to this thread.

    Personally, I have been with paypal since 2001, with no real issues... A couple of times, they turned off my debit card, because someone stole my debit card information and was on a spending spree with my money...

    The funds from the false transactions were returned to my account, within two weeks in all cases...

    I had been hearing the anti-paypal rants, in respect to digital products, but I am tickled now to see that the real facts have been allowed to enter the conversation...
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    • Profile picture of the author mraffiliate
      Thanks for the informative post
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  • Profile picture of the author George Wright
    Thanks Techead,

    I "knew" that, however, I never expressed it because I'm not an expert with PayPal and could not speak with authority on the subject. So I mostly just keep quiet on such matters.

    To think that PayPal "hates" digital goods just does not ring true. And believe me I've done some things that "should" have gotten me shut down, by accident, of course, never the less, I call and tell them what happened and all they say is, "Fix it." I do and they keep me around.

    Allen must do thousands of dollars a day here on the WSO forum alone and, so far so good.

    Stats on Warriorplus alone show sales of over $1,300,000 and WarriorPlus only processes a small fraction of WSOs. The average transaction is $17.++

    There is a LOT of activity coming through this forum and only an occasional bad thread about PayPal.

    I have to admit, when the horror stories start they do make me a bit nervous and because of that I have backup plans. Still I hope I never have to use them.

    George Wright
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    • Profile picture of the author Tina Golden
      Various conditions can lead to an "overdrawn" status on your PP acct (actually, a negative balance), but they can NOT overdraft your bank account in an attempt to recover these funds.
      SageSound,

      I agree with most of your post but this one part is inaccurate. PayPal most certainly can and will reach into your bank account should your account go in the negative. And if the funds are not in the bank, the bank will count it as an overdraft and charge your for such. I've been there, thanks to a hacker.

      Tina
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      • Profile picture of the author SageSound
        Originally Posted by TMG Enterprises View Post

        SageSound,

        I agree with most of your post but this one part is inaccurate. PayPal most certainly can and will reach into your bank account should your account go in the negative. And if the funds are not in the bank, the bank will count it as an overdraft and charge your for such. I've been there, thanks to a hacker.

        Tina
        There are situations where PayPal can reverse transactions due to suspected fraud. There are also ways for hackers to do things unexpected.

        But as anybody who's been ripped-off by a seller on eBay can tell you, PayPal's abilities to recover funds is very limited.

        PayPal can attempt to debit your account, and if the bank allows it, it can create an overdraft condition. They can be blocked, and you have various types of recourse and remedies. Furthermore, PayPal is not authorized to do much more than submit a draft.

        Merchant account agreements have a clause in them where you basically agree to allow them to withdraw funds regardless. These transfers can NOT be blocked, and the bank will do nothing to help. You have no recourse, and the agreement forces you to waive your legal remedies. That is, if the Merchant account managers' paranoid tendencies caused you to get overdrawn and unable to meet your production or fulfillment obligations, and you are forced to file immediate bankruptcy, you can not sue them for the obvious damages they caused.

        PayPal has no such requirements. But that's in large part because their ability to reclaim funds is limited.

        -David
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      • Profile picture of the author Steve Wells
        Originally Posted by TMG Enterprises View Post

        SageSound,

        I agree with most of your post but this one part is inaccurate. PayPal most certainly can and will reach into your bank account should your account go in the negative. And if the funds are not in the bank, the bank will count it as an overdraft and charge your for such. I've been there, thanks to a hacker.

        Tina
        Tina is correct. They can and will, but they will usually warn you that you have an overdue balance. At least they will if you for example sold a product for x amount of dollars, and thats all you had in your account, and you spent it. Then the person who bought from you reversed the charge. Paypal will warn you and give you some time to put money into your paypal account to get it balanced, usually.

        Also, the best thing to do to protect your self is have a bank account specifically for paypal. And on the bank account make sure you have overdraft protection. Just incase something happens.
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  • Profile picture of the author vishalduggal
    I am also a little bit scared from PayPal.If they do this kind of things with Digital download merchants,I think we all have to move on to 2Chechout.com or 1shoppingcart.com
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    • Profile picture of the author tecHead
      Originally Posted by vishalduggal View Post

      I am also a little bit scared from PayPal.If they do this kind of things with Digital download merchants,I think we all have to move on to 2Chechout.com or 1shoppingcart.com
      The purpose of this post was to show you, (and everyone), that Digital Goods Merchants have nothing to be scared about.

      Please read it, again.

      PLP
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      • Profile picture of the author Robert Puddy
        You should also fill out the customer service message section in your profile...

        Customer Service Message

        By personalising a customer service message, you let buyers know that their satisfaction is important to you. Buyers will see this message before they open a dispute in the Resolution Centre.

        You may wish to provide your customer service number, summarise your returns policy, or include a note about how you handle customer service inquiries.

        For example, 'Your satisfaction is our top priority. If you have a problem with a transaction, just let us know and we will work with you to resolve the issue. You can open a dispute or call us on 08707 307 191. We will make every effort to respond to all customer service inquiries within two working days'.

        go to profile ... selling preferences... customer service message
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        • Profile picture of the author George Wright
          Originally Posted by Robert Puddy View Post

          You should also fill out the customer service message section in your profile...




          go to profile ... selling preferences... customer service message
          On my way to do that. I wasn't even aware of that one.

          George Wright
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        • Profile picture of the author tecHead
          Originally Posted by Robert Puddy View Post

          You should also fill out the customer service message section in your profile...
          go to profile ... selling preferences... customer service message
          Thanks for that addition, Robert. I put up another post some time back about that very section and forgot to add it, here.

          Thanks for being proactive, with that.

          PLP
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    • Profile picture of the author SageSound
      Originally Posted by vishalduggal View Post

      I am also a little bit scared from PayPal.If they do this kind of things with Digital download merchants,I think we all have to move on to 2Chechout.com or 1shoppingcart.com
      I'm a little bit scared of the other drivers on the road every time I get into my car. What do you suggest I do? Maybe a motorcycle is a better choice? Or should I get a truck? Maybe we all need to get big trucks. Cars are too dangerous.
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      • Profile picture of the author tecHead
        Originally Posted by SageSound View Post

        I'm a little bit scared of the other drivers on the road every time I get into my car. What do you suggest I do? Maybe a motorcycle is a better choice? Or should I get a truck? Maybe we all need to get big trucks. Cars are too dangerous.
        LMAO stfu

        Nevada heat gettin' to you? LOL
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  • Profile picture of the author Rus Sells
    5) Stay in contact with PayPal at all times! I can't stress this enough. Far too many people become complacent in thinking its OK to never contact PayPal unless something has gone wrong. This is a mistake; plain and simple.
    You know I mentioned this in another rant thread about Paypal and how I had acted on behalf of another persons Paypal account that was frozen and got it ironed out with 1 phone call, the account was restored instantly.

    Why on earth no one realizes that it so much about relationship I do not understand.


    One thing I am doing now with my digital products is actually sending Paypal a copy of my product for their review, my main web page/sales page.

    Basically everything entailed with my product Paypal will have 100% knowledge of what the product is, the claims I make about the product on my web site and my refund policies.

    To me as a business owner this only makes good business sense, especially if some one else is processing my receivables.

    All these things communicate your serious about your business and not some one who's just selling some download that is attached to an Aweber email.

    Paypal wants to know buyers are buying from businesses and not some dude on crack selling the next 5 dollar pdf report on how to get rich or something.

    Just my perspective.
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  • Profile picture of the author Sheryl Polomka
    It's not always that easy Rus, I think if you got the matter resolved with one phone call you were lucky - it isn't always as simple as that.

    I think until you have a bad experience with Paypal you will always be of the belief that 'they must have done something wrong'. That mindset soon changes when you have your own personal bad experience with them!
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    • Profile picture of the author tecHead
      Originally Posted by Sheryl Polomka View Post

      It's not always that easy Rus, I think if you got the matter resolved with one phone call you were lucky - it isn't always as simple as that.

      I think until you have a bad experience with Paypal you will always be of the belief that 'they must have done something wrong'. That mindset soon changes when you have your own personal bad experience with them!
      PayPal, (and also Google), are the two 800lb ticked off gorillas with major attitude in the room that we have to go in.

      If you walk in beside me with a couple bananas in your hand and I'm pulling a wheel barrel with a couple bushels of banana and fruit; which do you think will make it out the room alive if somebody (Customers) started throwing rocks?

      Just like the boyscouts... always be prepared.

      HTH
      PLP
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    • Profile picture of the author Rus Sells
      Not to toot my horn to much but I have taken time to build a relationship with people at Paypal, the operative word, "people".

      I actively take action to avoid negative experiences with Paypal which reduces the chances that something will go wrong. Paypal is my partner, not just some payment processor, that is how I view them and treat them accordingly.

      I don't see why so many don't get this.

      Originally Posted by Sheryl Polomka View Post

      It's not always that easy Rus, I think if you got the matter resolved with one phone call you were lucky - it isn't always as simple as that.

      I think until you have a bad experience with Paypal you will always be of the belief that 'they must have done something wrong'. That mindset soon changes when you have your own personal bad experience with them!
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      • Profile picture of the author Mark Coverdale
        I have been using Paypal for around 5 years without any problems, BUT, you might want to know what DOES happen to some people.

        This happened to E. Brian Rose.

        Just an interesting read.
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      • Profile picture of the author AidenChong
        Rus,

        Thanks for your input!

        That's exactly how "business partners" want to be treated.

        "PEOPLE-POWERED", as I've always quoted.

        Well, maybe it's easier for people in the U.S or some other advanced country to get themselves to get in touch and build a rapport relationship with the people at Paypal.

        What is your recommendation for people like me, staying in Asia, what can we do to cultivate the good relationship with them?

        Emailing? Faxing? Calling their department's phone number, or walk in to their department (Impossible for me to do the walk-in)?

        I can see from the previous post that Paypal is having this issue where people in different departments can override other departments kind of issues.

        Do you think that sticking to one person is better, or getting in touch with a few representatives at a time will be a better move?

        This is a very well informed thread about Paypal's stuff.

        If we're doing a small scale product launch, for example, launching my product in the WF for the first time, maybe a WSO, is that a major concern?

        Do I need to contact Paypal for that reason?

        Thanks for the information given!


        Aiden Chong

        Originally Posted by Rus Sells View Post

        Not to toot my horn to much but I have taken time to build a relationship with people at Paypal, the operative word, "people".

        I actively take action to avoid negative experiences with Paypal which reduces the chances that something will go wrong. Paypal is my partner, not just some payment processor, that is how I view them and treat them accordingly.

        I don't see why so many don't get this.
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    • Profile picture of the author Sardent
      Originally Posted by Sheryl Polomka View Post

      It's not always that easy Rus, I think if you got the matter resolved with one phone call you were lucky - it isn't always as simple as that.

      I think until you have a bad experience with Paypal you will always be of the belief that 'they must have done something wrong'. That mindset soon changes when you have your own personal bad experience with them!
      Everyone thinks they're a good driver until they total their car.
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      • Profile picture of the author Rus Sells
        LOL What? That is so silly its not even silly! Never mind, many of you can continue with your current mindset its my business I have to take care of not yours.

        Originally Posted by Sardent View Post

        Everyone thinks they're a good driver until they total their car.
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  • Profile picture of the author AidenChong
    This is a very well informed thread about Paypal's stuff. If we're doing a small scale product launch, for example, launching my product in the WF for the first time, maybe a WSO, is that a major concern?

    Do I need to contact Paypal for that reason?

    Thanks for the information given!


    Aiden Chong
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  • Profile picture of the author J Bold
    The OP suggests not accepting payments from those overseas? You have checked the box Block payments from users who have non-US paypal accounts.

    That's cutting down on tons of potential sales, seems crazy in my opinion. Especially if you sell on Warrior Forum, you are going to have many sales from outside the U.S. Just doesn't make sense to block those sales, really.
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    • Profile picture of the author tecHead
      Originally Posted by redicelander View Post

      The OP suggests not accepting payments from those overseas? You have checked the box Block payments from users who have non-US paypal accounts.

      That's cutting down on tons of potential sales, seems crazy in my opinion. Especially if you sell on Warrior Forum, you are going to have many sales from outside the U.S. Just doesn't make sense to block those sales, really.
      The reference to "PayPal Hacks" is not me; its also a little dated as you can see from the screen shot. It is really just a "reference" to go by.

      Of course every Vendor is going to have their own individual criteria for what payments and from whom those payments come that they choose to accept.

      Depending on your business model, there might be a reason to not accept payments from certain countries. Just as well as their might be every reason for you to accept payments from every country.

      What I suggest is that you set your PayPal preferences to best suit your style and tolerance of doing business.

      HTH
      PLP
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  • Profile picture of the author microunique
    Banned
    I have no worried since our country doesnt support paypal!!!lol
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  • Profile picture of the author J Bold
    Ah, thanks for clearing that up, tecHead, guess I was confused on the point of the screen shot.
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  • Profile picture of the author paulie888
    Techead, while all this seems like really solid, actionable information that everyone should implement within their paypal accounts, there is something in point 3 of your post which gives me pause - are you basically saying to block payments from all users who have non-US paypal accounts with that screenshot?

    EDIT: I see that redicelander has already asked a similar question. I feel like that it'd not be in our best interests to block non-US paypal accounts, especially if we're selling internet marketing products on the Warrior forum and elsewhere on the internet as there is a fairly large proportion of buyers who reside outside the US.
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