The PayPal Phenomenon

An Anonymous Coward writes: "Pretty interesting and thorough history of PayPal." Not really the usual fare on Slashdot, but this is a very readable account of one of the few dot-com successes. I find PayPal pretty annoying today - a lot of the anti-fraud, privacy-invasive measures which this article applauds make Paypal much less enticing to me than it used to be. And they've been accused of squatting on people's funds at the slightest excuse. But maybe that's the way to success: start off with a very appealing product, then slowly tighten the screws.

Comments

PayPal. Nice idea, but it has it's problems.

[Chas]

Here's a nice outline of why PayPal's implementation is NOT very conducive to regular transactions.

http://www.gamers-union.com/paypal.html

I personally have had many transactions thru PAYPAL as both a buyer & seller.

I have had 1 bad transaction.

The situation was resolved to their satisfaction but not to mine. I still accept PAYPAL payments but I would not recommend it.

On March 22 I sent a person in Canada $190 payment for battletech items. This is someone I had dealt with a few times previously & had no problems with. Payment was never sent via PAYPAL before tho.

Well he received the payment & tried to withdraw it from his paypal account. He was charged a $20 currency transfer fee (by PAYPAL). & the money never made it to his canadian bank account & was bounced back to his PAYPAL account 7 days later less the transfer fee. $170 remain.

Paypal was contacted & all the necessary info was verified. He then tried to withdraw the money again to his bank account. He was again charged a $20 currency transfer fee & again it bounced back to his PAYPAL account less the $20.

$150 remained So now quite upset he contacted PAYPAL a 3rd time. All the information necessary to withdraw the money was verified with PAYPAL a 3rd time. He then tried to withdraw the money again to his bank account. He was again charged a $20 currency transfer fee & again it bounced back to his PAYPAL account less the $20. $130 remained.

After the 2nd attempt I was also contacting PAYPAL to find out what was going on. The standard reply via email was given. Or the "he needs to contact us to straighten this out" via phone. We were both trying to get the situation resolved via phone & emails. It was our conclusion that nothing had changed since day 1.

He still was unable to get the money out of PAYPAL. We also found out he was unable to do anything else with the funds. He could not transfer them or return them to me. He was not about to try & withdraw them again. So after more than 1 months time I filed a claim to try & recover the funds. Which again took more than a month. In short on May 30th I received the email below.

Subject: Resolution of Buyer Complaint Case #53104 (KMM10989963C0KM)
Date: Wed, 30 May 2001 14:24:04 -0700
From: "complaint-response@paypal.com"
To: Ed Karl

Dear PayPal User, PayPal has concluded the investigation of your Buyer Complaint. As our policy states, we conducted this investigation on a best effort basis and made no guarantee of funds recovery.

Case ID: 53104
Transaction Amount: $190.00
Transaction Date: 03/22/01
Seller's Email: achillies_10_2001@yahoo.ca

Our investigation has revealed that the seller is at fault. We are pleased to inform you that we were able to recover funds from the sellers account. Your account has been credited $128.35. Please allow up to 5 days to see the adjustment on your account. This amount is the maximum we were able to recover. We value your business and regret that you have had this experience. To avoid similar experiences in the future, we recommend that you read our Security Tips on our website located at:

http://www.paypal.com/cgi-bin/webscr?cmd=p/gen/f ra ud-prevention-outside

Sincerely, Craig
Complaint Resolution Department

So out of $190 sent I received $128.15 back. The problem? The person I sent it to did not get the other $61.85. PAYPAL has it & is refusing to part with it.

Basically they are telling me someone who could not do anything with the money is resposible for the remaining amount. The only funds not recovered are for Currency transfres Fees where the currency transfers never occurred.

Why I can't get the rest of the funds back? Because the funds were not in the account of the person I sent them to. But they were withdrawn for services that were never performed. & not only that but PAYPAL was contacted to verify the necessary info on the 2nd & 3rd try. PAYPAL funds were sent to a PAYPAL account which means the funds are subject to PAYPAL restrictions.

Read the first paragraph of the copied email.

What should I have done differently?

If I had sent the funds I sent to be withdrawn from a credit card (or check card) I would have had the recourse to have the CC co reverse the charge in full.

Other info I have learned. NEVER LEAVE ANY MONEY IN YOUR PAYPAL ACCOUNT! Just 1 complaint locks up the account & you do not get to do anything until they decide you can. In the meantime any funds sent to your account will be returned with a notice that the account is frozen. This may take MONTHS!

Why have I decided on PROPAY?

http://www.propay.com

PROPAY is a credit card processing company, not a money transfer company like PAYPAL. Only the seller needs to be a PROPAY member. PROPAY can be used to for face to face personal transactions. (garage sales, conventions, etc) PROPAY can be used with PALM & other forms of PDAs PROPAY will very shortly have a setup similar to PAYPAL's Web accept feature.

In summary; PAYPAL has $61.85 for services that were not performed. PAYPAL refuses resposibility for the $61.85 PAYPAL acknowledges that he was not signed up properly to withdraw or do anything with the funds in his account but he was signed up enough for them to Charge him 3 times & deduct $20 each time. PAYPAL refuses to do anything further to recover the funds

Other info. PAYPAL is unable to get a BBB seal of approval do to the amount of complaints against them.

My story is minor compaired to some. Do a web search under "PAYPAL COMPLAINTS" You will be surprised at how much you find. I used http://www.dogpile.com for this search. (dogpile searches thru 40 search engines including all the big ones.)

Also interesting to note, a few days after this page went up, PayPal yanked service on the W3 storefront they'd been providing for this individual.

And now he will no longer accept PayPal transactions.

Unfortunate, but very necessary to protect himself and his customers.

Re:I dunno...

[ThatComputerGuy]

It's nice to hear you had a good experience with PayPal. I've only rarely used it, but I was recently pointed to Paypal Warning.

The page lists all sorts of articles with negative comments about Paypal. Apparently it has gotten a 3 out of 7 on Reseller Ratings (where everything is scored by customers). They also have a Paypal Wall of Shame with "unedited horror stories".

The thing that grabbed my attention the most, however, was the following on the front page:

WARNING:

Your Paypal account can be frozen at any time, without advance notice leaving you without your money for weeks (if not forever), and there isn't much you can do about it.

Any thoughts, folks?