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Serious @PayPal Problems + Open Letter to @DavidMarcus

  • Danny InyDanny Iny

Over the last couple of weeks, I’ve pulled back the curtain and shared the sordid details about everything that happened behind the scenes with our January launch.

I shared how massive success grew past the point of manageability, and turned into an excruciating sense of overwhelm.

And I shared all of the nitty-gritty details of the launch; what went right, what went wrong, and what we improved along the way.

I shared it all, and held nothing back. Except for one thing.

Along with all of the other ups and downs, there was one last thing that came very close to going very, very wrong – so much so that if things had gone the other way, we may not have even survived.

The source of this nearly existential challenge was PayPal.

For a while there, I thought they were going to shut us down…

Setting the Stage: This Launch Might Actually Work Out!

The first week of the launch had been touch-and-go. We were still in the process of iterating our webinar and sales funnel, and playing whack-a-mole with technical glitches.

But by January 15, eight days into it, things were starting to look up; we still had a lot of work to do, but…

  • Conversions were starting to be consistent,
  • The biggest glitches seemed to have been dealt with,
  • We had generated enough revenue to cover our launch expenses, and
  • The early feedback from our new students was very positive.

But, just our team began to heave a sigh of relief, disaster struck, in the form of an email from PayPal that came in at 5:17pm, with the subject line “We noticed an issue with your account”:

paypal-first-email

This was definitely concerning; PayPal has a reputation of arbitrarily shutting down accounts, and here we were in the middle of a launch; if they decided to shut us down, it would mean that:

  1. We wouldn’t be able to process payments of new customers who tried to sign up
  2. We wouldn’t be able to access the money that we had already collected, creating a serious cash flow problem
  3. When it was time for the second monthly payments to be charged, they might not process, creating further problems

And in the middle of the launch, you’ve also got your hands full (as you know from my previous posts), which means that you don’t have a lot of time to chase down financial paperwork.

So it was a scary situation, to say the least.

But why panic when you can take action, right? So that’s what I did…

FULL DISCLOSURE: The next 2,500 words or so are a complete account of my experience trying to resolve this issue. I haven’t left out any of the details, which means that you get the whole story, but it’s a bit long. If you’re in a hurry, then skip ahead to the last sub-head, titled “So… why did all this happen? And why did I write this post?” for the important takeaways.

The “Trying to Appease PayPal” Saga Begins

The very first thing that I did was call PayPal, at the phone number provided at the bottom of the email that they sent me (blurred out to respect the privacy of the incompetent).

No answer, just voicemail.

No problem; I left a message that included my name, phone number, and Case ID number, saying that I had just received this email, and wanted to talk to someone to understand what they needed, so that I could provide it to them, and explaining that we’re in the middle of a launch, and there would be serious business consequences for us if they did anything to our account, so please don’t arbitrarily shut us down without talking to me first.

Then I logged onto their Resolution Centre, to see if I could learn more about what was going on. Here’s what I found:

paypal-resolution-centre

Now, am I the only one who isn’t sure what they’re looking for when they’re asking for “Provide proof of delivery”, “Provide invoices”, “Organization and payment information”, “Membership information“, “Business documentation”, and “Processor statement”?

With some of them, I could guess, without being 100% sure.

And for the rest, I had no idea.

And they were threatening to take action, and “limit my account” (and who knows what that means) – this was no time to provide them with documents that weren’t exactly what they were looking for!

Well, the last thing that I wanted to do was be seen as unresponsive, so I dug around the internet, and tried to get a sense of what they were looking for. I figured that if I could submit even one or two of the documents that they wanted, at least they’d see that I wasn’t ignoring them.

So I dug, and I dug, and I dug, and I clicked through to see what the forms looked like for each of those six categories (which, by the way, added up to a lot more than just “a little more information about your account or latest transactions” – but whatever).

Finally, I thought I had figured out what they wanted for one of the categories, and tried to submit.

ERROR!

Yes, that’s right – I tried to submit the documents that they wanted, and the site errored out. Just to make sure the problem wasn’t on my end, or the result of a browser incompatibility, I tried again, in both Chrome, and Internet Explorer.

The errors persisted. Even if I had known exactly what PayPal wanted, there’s no way I could submit those documents to them.

Meanwhile, my wife was doing some digging to see if she could learn more about what was going on…

PayPal: The Destroyer of Small Businesses?

Remember earlier, when I mentioned that PayPal has a reputation of arbitrarily shutting down accounts?

Well, it turns out that it was even worse than I thought. Here’s what my wife found within minutes of beginning to search:

  • A New York Times article about PayPal’s draconian and arbitrary anti-fraud measures, with examples of one business owner who had to take out a half-a-million-dollar loan to keep his company alive after PayPal seized a million of their dollars, and a case of a woman who raised $20,000 to buy Christmas gifts for needy children, only to have the money seized by a suspicious and uncaring PayPal. Seriously – stealing Christmas gifts from kids – can you believe it?
  • A blog post in which the author shares overwhelming negative feedback about PayPal from his readers, including one who wrote that “I will never use Paypal again. After being a loyal customer for over 3 years, one day they decided to place a 6 month hold on my money for no reason. I couldn’t access over 20k in my account which I needed to pay my bills!”
  • Another account of similar seizures, explaining that in some cases PayPal will arbitrarily seize and hold funds for as long as 180 days (that’s half a year!),  as long as you’ve tripped an item on their exhaustive laundry list of possible red flags. The post actually states that “The bottom line is that Paypal will limit all heavily used accounts sooner or later.”

Okay, let me ask you now: if you were a business owner, in my shoes, how would you feel?

Yeah, that’s what I thought.

So let’s continue with the story.

Since I couldn’t reach the person who sent that email, and the website wasn’t working, I called PayPal’s general support desk. All I wanted was an explanation of what PayPal was looking for, so that I could provide it to them, but the technician didn’t know anything – he just kept repeating that he advised me to “comply with the requests” (to which, of course, I kept replying that “I’M TRYING!!!”). Finally, he suggested that if the site wasn’t working, I could send a fax instead.

So that’s what I did.

I wrote a page-and-a-half-long letter explaining everything that I could, including all of the information that I knew they wanted, and asking them to please contact me and explain what else they were looking for, so that I could provide it.

I faxed them the message, and received an email the following day (Wednesday, January 16th), confirming that:

“we have received the documents you sent to PayPal. The documents have been successfully attached to your PayPal Account and will be reviewed shortly. We review documents in the order in which they are received and generally require 3 to 5 business days to process these documents. Once we process your documents, we will contact you about the status of your PayPal Account”

Phew – I was out of the woods now, right?

Not even close…

When the Left Hand Doesn’t Know What the Right Hand is Doing…

I really thought that from this point on, I didn’t have to worry; I had sent a fax explaining my situation, and their automated system had confirmed receipt – surely, someone would reach out to me to try and figure this out now, right?

So, imagine my surprise when on Friday, January 18th I received another email, with the subject line “Reminder: We noticed an issue with your account”:

paypal-second-email

Damn.

So I tried to call the sender of the original message again, and got voicemail again. I left another message (my third in three days, with no response).

I kept waiting for a response (which never came), and kept leaving messages. By Sunday, I had left five voicemails in five days.

Getting frustrated, and feeling my business hanging by a thread that could be cut at any moment by an incompetent but trigger-happy PayPal employee, I called PayPal support again, and spoke with someone in their Merchant Services department.

He was sympathetic, but couldn’t do anything relating to the case – he made it clear that my issue was with their Review Department, and it’s a completely separate system (he even shared that dealing with this department was frustrating for him and his colleagues, too, because the Review Department doesn’t return ANYBODY’s calls – apparently, I wasn’t special in that regard). All he could share with me was that PayPal needed “more detail regarding [my] business model”.

Does that sound vague to you? Because it does to me… 😉

But there was hope, because he also gave me a phone number through which I would supposedly be able to reach someone from the Review Department.

I called the number, excited that I would finally be able to get this issue resolved, and put it behind me.

The phone rang, and… it was a fax number.

Dead end. Again.

So I wrote up and faxed a more detailed letter, including everything from the first letter, plus everything that I could think to add about our business model.

I also looked PayPal up on Twitter.

I tweeted the company, and their President, @DavidMarcus, expressing how frustrated I was by the whole experience.

David Marcus replied, putting me in touch with @AskPayPal, who would supposedly help me get the issue sorted.

@AskPayPal on the scene… problem solved? No! :-S

Okay, great, at least now I was talking to a human being. 😉

But would the issue be solved? No, it wouldn’t…

First, he (@AskPayPal is a guy) wrote that:

“I’m sorry to hear about the difficulties you’ve experienced with your account. I see that you’ve submitted the information we were requesting and now the case is in review. You can respond to this email if you have any questions, or you can give the number on the bottom of the original email a call as that would connect you with the department that issued the warning in the first place. And if you need that email resent, please let us know.”

I responded that I would happily call the number that was on the original email, except that it goes to voicemail, and they weren’t returning my calls. I created a document outlining my entire experience thus far, and sent it to him, asking that he read it and tell me honestly if the experience described there sounds reasonable.

He replied that:

“Regrettably we cannot accept attachments, but I can see from the warning itself what we’re requesting. From your point of view, I can see why you feel that what we’re looking for is unreasonable. From our point of view, we see an account that has consistently been doing about a thousand dollars of business a month, suddenly do approximately $30,000 in one month for coaching and training programs with a satisfaction guarantee for refunds, and we become concerned as to what PayPal is being used for.

“More importantly, given the volume and that guarantee, we need to make sure that your business model is strong enough not to worry about the refund issue, and that if everyone requested a refund at once, you would be able to cover that rather than PayPal be responsible for it. As an online payment processor, these are the questions that we need to have answers to to minimize our risk, as much as possible.

“As far as the contact number that was provided, I apologize if no one has returned your messages. I’ve requested that, if there is anything else we should need from you, they give you a call to discuss it.”

(Have you ever tried to have a conversation with a brick wall? I haven’t, but I imagine it would go something like this…) 😉

I replied that I don’t think it’s unreasonable for them to request this information, but I think that what I’ve gone through IN MY ATTEMPTS TO COMPLY *is* unreasonable, and I re-sent the account of my experience, this time in the body of the email. He replied:

“I completely understand where your frustration is coming from now. As I stated, I’ve requested that we call you if anything is further is needed on the account. I apologize that [THE ORIGINAL SENDER] never got back to you; I’m not sure why that may be.

“Currently the warning is in review; I would hope that it will be reviewed and resolved soon. But as this is a warning, the only thing that you can’t do with your account is close it; there are no other adverse actions affecting you.

“I can, to a degree, understand why you weren’t able to get satisfactory answers or a resolution on the phone. The warning on your account is only resolved by a specific group, so the only real information any frontline agent would be able to provide is that you need to provide the information being requested. I get where that would be annoying, but unless they’re part of the specific group that could resolve it, the specifics would be beyond them.”

In other words, “I’m sorry you’re upset, but there’s nothing I can do.” I replied that:

“I understand what you’re saying, but I hope that you can understand how stressful this is for a business owner; PayPal has a reputation of unilaterally suspending accounts (as per this, and this, for example), and while I’m very happy to comply and provide all of the information that you guys need, it is very concerning to me that the instructions aren’t clear, the site makes it difficult for me to comply, I can’t reach a real person who can help, and even though I’ve submitted information, I still get automated emails saying that I haven’t complied.

“I’m in the middle of a launch, and I’m *very* concerned that all of a sudden my account will be arbitrarily suspended, and transactions will stop going through – this would cost my business a significant amount of money.

“(Incidentally, if they had just contacted me and explained it the way you did in your previous email, I would have easily explained that my business hasn’t changed, and we’ve done this volume for over a year, but we’ve switched to a new shopping cart that isn’t compatible with the old merchant account, and that’s why we’re moved everything to run through PayPal.)

“Can you please contact the department in question, and have someone call me? Or give me the contact information of [THE PERSON]’s supervisor, since [THE PERSON] is clearly derelict in her duties?”

To which @AskPayPal replied back to me:

“We’re fully aware of those situations and we’re working on keeping things like that from happening. Which is a large reason why we didn’t just restrict your account access; rather we placed a warning to allow you to provide us the information in a way that didn’t impede your business. You’ve done so, so I see no reason that we would suspend your account.

“As far as [THE PERSON], I’ve reached out to her and requested that she review your account. I can’t provide any further information other than what was already provided in the original email we sent. I understand your frustration with this, and please believe me that we are working on making situations like this less hectic for our customers.”

Now, this whole exchange took several days; I received this last message on Tuesday, January 22nd, a full seven days after this had all began. By this point I had left a grand total of seven (!) voicemails for the sender of the original message, and had not received a single reply. :-S

All’s Well That Ends Well?

Thankfully, this story doesn’t end nearly as badly as it could have; on Wednesday, January 23rd (8 days after this whole thing started), I received a notice saying that the restrictions were lifted from my account, and shortly thereafter, the person who sent that original email called me.

She read off of a script that said “I apologize for the lack of communication” (reading off a script is the only way to describe it – she clearly didn’t mean it, or care), she explained that this whole process was put in place for my convenience (can you believe that?), and asked me some questions that were both routine and absurd (“so… um… do you get a lot of chargebacks?”).

Now here’s the best part: two days later, I was asked to complete a customer feedback survey about my interactions with PayPal relating to this whole experience.

Just by reading the questions, it became very clear just how bad communication is within this organization. On the one hand, you’ve got the marketing people, and the strategy people, who seem to be all for creating a great customer experience… but their hands are tied by the apparently autonomous and incompetent idiots in the Review Department.

For a good laugh, and to see this in action, take a look at the survey questions, and my answers (these came after the basic questions around whether I was satisfied, and whether I would recommend PayPal to others – to which my answers were “no” and “no”):

paypal-survey1

paypal-survey2

paypal-survey3

paypal-survey4

So that’s the whole story, and now there are just a few questions left to answer:

  1. What triggered this account review in the first place?
  2. Why did all this happen? And why was it such a mess?
  3. Why did I share the play-by-play of all this, and not just a summary?
  4. Why, in spite of all of these problems, are we still using PayPal?!

These aren’t trivial questions, particularly the last one. Here are the answers…

So… why did all this happen? And why did I write this post?

Okay, let’s start with what triggered the account review in the first place.

There were actually two important contributing factors:

  1. A spike in transaction volume. The launch meant more sales than we had done previously, which raised eyebrows at PayPal. This was compounded by the fact that…
  2. It was an infrequently-used account. While the PayPal account has been around and in good standing for many years, we haven’t used it much until recently (in the past we used Beanstream as our merchant account and payment gateway provider, and they’re excellent). The reason why we switched to PayPal is that we were running the launch through Office AutoPilot, and Office AutoPilot doesn’t integrate with Beanstream (though they’ve told me that they’re planning on building that functionality in soon).

Now, anyone who’s ever done much in the way of credit card transactions would tell you that both of these factors together are about the same as begging for your account to be suspended, which is why you’re supposed to call your merchant account provider in advance of the spike in activity, and tell them what’s coming.

Which is *exactly* what we did!

A few weeks before the launch, I called PayPal and told them exactly what was going on; that we’re switching to use this account, we’ve got a big launch coming up, and we’re expecting to process large transaction volumes, so there’s nothing to worry about when they see the spike in activity.

The trouble is that the Review Department never got the message; it was sitting in the notes on my customer support account, and the Customer Support people have no way of communicating with the Review Department people (and the Review Department never bothered to check those notes).

So, in other words, I had done everything that I could have done, and the account review was triggered in the first place by a lack of internal communication, and by laziness.

Now, why was it so complicated to resolve?

Why did it create an enormous amount of stress and take over 10 hours of follow-up spread over 8 days, when the whole story could have been resolved by a 5-minute phone call, that would have gone something like this:
PayPal Rep: Hi, this is So-And-So from PayPal. Am I speaking with Danny Iny?

Danny: Yes, that’s me – what can I do for you?

PayPal Rep: We’ve noticed a significant increase in your account activity over the last week or so – can you explain what’s going on?

Danny: Yes, of course. We just switched over to use the PayPal account as our primary merchant account, and we’re launching a new training program. These transaction volumes are large, but consistent with the growth history of our business over the last couple of years. We’ve consistently had happy customers, and never had any issues with complaints, refunds, or chargebacks. If you need additional documentation, I’d be happy to share transaction reports from the company that we used as our previous primary provider. Would that be helpful?

PayPal Rep: Oh, thanks for clearing that up. No, that won’t be necessary. Thanks for your time!

(This isn’t an exaggeration; in the end, I never ended up providing the documentation, because they never asked for it!)

It literally could have been that simple; but instead, a lazy and possibly incompetent staffer in the Review Department put the account on review, checked boxes to request every kind of documentation that was possible (even though, in hindsight, half of it didn’t even apply), and made my life hell for over a week.

Why this post, with the whole play-by-play? And why are we still using PayPal?!

I’m writing this post because for every time that this happens to someone like me, who has access to a megaphone in the form of this blog, there are probably dozens of cases where it happens to someone who isn’t equipped to tell anyone about it.

I shared the whole play-by-play because if I didn’t, it would be easy for some PayPal rep to just leave a comment saying “but the review was lifted, and no harm was done” – which, as you can see from this whole experience, clearly wasn’t the case.

And I’m also sharing it all because I’m hoping that David Marcus, the President of PayPal, might actually read it, recognize that there’s a problem, and take action to fix it. Because the truth is, he probably doesn’t know about any of this; his staff probably just tells him that there’s occasionally a delay in processing these things, but that no harm is ever done. Odds are, he doesn’t have any idea just how badly this part of his organization is functioning.

And that’s dangerous for any company, and brings us to the last question, which is why, despite all of this, we’re still using PayPal.

The answer is that we don’t have a choice.

As a Canadian business, our options in terms of the merchant account and gateway providers are very limited. Beanstream was great, but they don’t work with Office AutoPilot, so we’re stuck with PayPal – at least until Office AutoPilot figures out the integration (it’s been a requested feature for a long time).

So, Mr. Marcus, do you really want to be running a business whose customers only stay when they have no other choice? I’m willing to bet that the answer is no, and that given the knowledge that there’s such a serious problem brewing in your organization, you’ll take action to fix it.

I hope that I’m right.

Update: I tweeted this post after it went live, and got a tweet back from David Marcus; clearly, he hadn’t read the post. Not encouraging. :-S

paypal-david-marcus-twitter

Further Update: David Marcus tweeted back, saying that he had read the post; in which case, his tweet really doesn’t make a lot of sense (the last time he referred me to @AskPayPal, we just went in circles, after all). I was also called by someone in their office to see if there was anything to help, but of course, the issue is resolved – what they need to do is fix what’s happening inside their company. I wish them luck, and I’m happy to help if I can.

176 thoughts on Serious @PayPal Problems + Open Letter to @DavidMarcus

martin laou

Hello what is the Best tool to upload tracking information to paypal?

Brian Manning

I have heard stories like this before and it’s unfortunate, but sadly a reality. Paypal will grant a merchant account to anyone so their policies and procedures have to be much different than a merchant account provider that goes through a formal underwriting process.

In my humble opinion this is a perfect example of doing business with a faceless company. I am not attempting to put down Paypal, rather to illustrate that when something like accepting credit card payments at your business is entrusted to a company that offers mostly just email support, there are better options.

There are merchant account companies and banks that can set up services online that are very comparable (and better) than what paypal can offer for a legitimate business.

For an great overview and food for thought on merchant account setup, check out this article at: http://www.bancardsales.com/merchant-account-essentials/

Maxim

A similar situation here.
I called them before my furst proper launch to worn them about expected spike of transactions, as I did not want my other business affected.
They told me that there was not problem with my account and that nothing would happen to it.
4 days in the launch when we hit $30K mark of sales they just limited my account and sent me an email saying that they are closing it.
Whant to cry now as even if I did something wrong they should have worned me. I always kept money in my account, just in case. So, now I have no idea what to do as due to this even my existing business is not functioning.
WHAT DO I DO here?

Danny

Hey Maxim, I wish I had better advice to give you, but the best I can suggest is that you work on doing whatever PayPal wants you to do, but in parallel try to get setup with an alternate payment processor that you can switch off to. 🙁

Maxim

Thanks Danny,
They do not want to hear anything as it is closing. They just keep sending me emails about how to complain about PP to european comission etc.
And they are not very polite at all…
Looks like I lost it.

Michelle

Matt Goffrey doesn’t use paypal because he knows he can be charged and customers can get their money back when he doesn’t provide the product. PayPal at least protects the customer and the seller.

Mary Ahart

Thank You Danny. It was great working with you. Sorry things didn’t gel as I do not yet do direct Merchant Processing in Canada. I WILL BE BACK!

Raven

I’ve had problems with PayPal, and most recently problems with them *and* eBay. eBay owns PayPal.

I’ve had a verified business account with PayPal for many, many years. I’ve still had issues with holds and limits, on and off.

In the most recent round of issues, I was attempting to sell some items on eBay for my business. I linked my verified business PayPal account to my eBay account. Or so I thought. It persisted in telling me that the email address I was using was not associated with any PayPal account. Grrr. Hours and hours to get this resolved.

But THEN a few days later it got really obnoxious. They delisted all my items with no warning, saying they couldn’t verify my identity. When I attempted to resolve this, I was given automated questionnaires to fill out, asking all sorts of detailed questions about “people I should know,” and I could not reach a human. Their database had linked me to my ex-husband’s name (we’ve been divorced for more than 10 years and I don’t use his name and didn’t own this business then) and wanted me to verify information about his new ex-wife (with whom he was having an affair when I left him). I could reach NOBODY at eBay who could resolve this.

When I decided to cancel my eBay account instead of continuing to deal with this, PayPal immediately put a hold on my verified business account that they had previously been “unable to verify or link” to the eBay account.

Once my PayPal account was finally restored, I canceled it. Additionally, I closed the bank account that had been linked to it. Be warned that if you don’t take this step, they still have access to your account for some time.

I will never do business with PayPal or any eBay company again (and they own many!).

anton

Simple! You are in Canada — not the USA!

Rebekah Jones

Canada vs USA??? I’m in USA and had paypal problem as posted above – had credit card company issues in the past too.

Rebekah Jones

Wow, this post solicited a lot of comments! Guess I wasn’t the only one to have a PayPal issue this past month. I got an email almost identical to the one you received, Danny. They wanted proof of social security, proof of driver’s license, and proof or residency. I’ve had my PayPal account for about 15 years and all of a sudden it seemed in their eyes I didn’t exist. I faxed the requested documents to them 3 times! Each time I’d get an email response telling me to send a larger copy of my DL and SS card. Finally, I wrote an email of complaint. They threatened to close my account. So I mailed the documents. The same day I mailed everything PayPal restored my account. So someone must have seen their mistake. However, this resolution process was so time consuming and frustrating.

Gabrille

The reason Paypal rarely gets sued is because of what is written in their term of service that you have to agree to prior to activating an account with them. Not likely they will do anything differently in the future. Sad.

Frank Daley

Another thing! The merchant accounts take more time to set up and operate and are arguably more costly. Also you have to arrange to connections to several cards or people get annoyed and don’t buy. It you have Visa and MasterCard you might think you’re safe but then there’s American Express etc. You’d have to set up arrangements with all of them making the whole thing needlessly complex. With PAl the buyer decides which if several bank/cards etc he wished to use eliminating the problem for the seller. Oh yeah, one more thing. I haven’t checked in some time but when I asked about a merchant account with the CIBC Bank ( Canadian bank of Commerce–a BIG bank) they wanted a $5,000 despotism (because it was the Internet, right? And there are dangers, yes? Scary.

I asked when the 5 grand (an enormous sum for a solo start-up) would be returned. The answer: 6 months AFTER THE CLOSE OF THE BUSINESS.

And that ‘s why people turned to Pay Pal. Gag!

Danny

Hey Frank, the problem is that you went through one of the big banks – they’re all crooks, and don’t really care about small business. Third party merchant account providers/processors are a lot more reasonable.

Frank Daley

I guess they all have their pros and cons Danny, but do you recommend any?

Danny

Hey Frank, for a Canadian, I’d suggest you look at Beanstream.

Jennifer Dunn

I hope WePay gets to Canada soon! They’re the ones Burning Man turned to when they had one of those painful 180-day account holds enacted. And WePay has a long history of needling PayPal, which is fun. (Full disclosure: I write for them – but also use them to invoice/collect payments for my business.)

I’m very glad it worked out, but sorry you’re being held hostage!

Danny

Yeah, it’ll be awesome when they make it to Canada! 🙂

Kelly

How funny! I just got the same email about my account being limited today. Only I’m pretty sure it’s because I do too little business instead of too much. LOL! Hoping I don’t have issues like you had Danny. Sorry you had to go through this and I hope David Marcus takes action in his company. There are no excuses for him now.

Irfan Siddiqui

Hello Danny, Your experience with PayPal is really terrible. I’m with their services for past 2 years now without any failure they have worked successfully. I don’t know how it happens to you, but happy to hear that at last your problem got resolved.

Dennis Blanchard

Wow Danny, that was quite a story! Unfortunately, too often, we call a corporation and we get, “Hello, your call is important to us…” Yeah. In your case, the call WAS important, but the response was a waste of time. American corporations are now considered “people,” but, they’re people without a soul.

About ten years ago, my wife and I were moving to Florida. We rented a huge moving van in New Hampshire, filled it up with our whole world and drove south. In New Jersey we had to stop for fuel. We took on over $1000 of fuel and paid by credit card. The purchase was declined. We called the credit union that issued the card, but it was after hours, there was no answer, except for “Hello, your call is…” Now in a state of panic, we went through phone books (this was ten years ago!) and finally found some number to call where a human answered. Eventually, after a few hours, we did get it cleared and were under way, but I can appreciate your panic.

I once spent a total of 27 hours at a Motor Vehicle Dept. in Connecticut for related reasons. It was the same problem, no internal communications and attitudes that were beyond communication. At least in Canada, you have a health care system, try dealing with US health care insurance companies, the ultimate bureaucrats.

My primary dealings with Paypal has been when I sell books at book signings, I have one of those little Android phone things for Paypal. So far, no problem, I usually don’t sell more than 100 a day, but what happens if I attend a big event and go over 200, or 300, does a Paypal bureaucrat put a freeze on me getting paid for six months? Sure seems likely. Maybe I’ll get to fill out the same customer satisfaction form you did. Wanna bet Mr. Marcus never sees it?

Danny

And Dennis, want to hear the funniest part? PayPal just sent me that same customer satisfaction form AGAIN! Insane! 😉

Chris

I have always refused to try paypal after reading some terrible news about them.

Hope they change one day.

Deborah

Hi Danny,

I am sitting with my website designer/branding specialist right now. The nature of my business is retreats in Bali, and sacred sites around the world as well as in my own Rocky Mountains neighbourhood. I will Also plan and/or promote workshops , webinars, lectures etc. Now the reason I subscribe to you and copy blogger is because I will be blogging everyday.

My blog is a newspaper style and mimic a regular newspaper format, only it will be wholistic news.

I have a couple of personal questions.

Danny

Hi Deborah, you can email me directly if you like (danny (at) firepolemarketing (dot) com), but I’d need to know where you’re located in the world, and what volume of transactions (i.e. how much money per transaction, how much in total per year) you’re expecting to do in order to make a recommendation. 🙂

Deborah

Eeeks. I’m just starting a business that have spikes once or twice a year.

Now what do I do?

Danny

Hey Deborah, what kind of business are you running? How much volume are you doing? (i.e. how big are the spikes?) And where are you located?

mary ahart

Hello- This is Mary from Illinois! Matrix Payment Systems is going to help you save money on your processing and receive excellent service. NO MORE PAYPAL ISSUES! Thanks to Danny, I have found solutions for you in the US and Canada … stay tuned.

Danny

Everyone, Mary and I are corresponding – after I test out her integration, if everything is working, you’ll all receive a full report! 🙂

Jesse

Danny, that sucks. However, I really appreciate you sharing your experience.
I will check for updates to see what alternative you choose.
As always, thank you for the helpful advice,
Jesse

Coco

This horror story, along with the answer to my curiosity as to why Jon Morrow doesn’t take Paypal, is enough to make me just plain avoid Paypal now.

I once tried to get a refund for an online purchase that was never delivered and was denied the refund, even though the website I purchased from had disappeared. After a few exchanges, I gave up because it was obvious that I was talking to a robot. The amount was around $40, so I considered the experience a lesson in who not to order from online. I knew Paypal could have done more, but I didn’t sweat it at the time.

How-some-ever, your story here, along with the equally horrifying experiences that match or exceed yours, have me now determined to get away from Paypal altogether- I have but one recurring payment left with them.. It’s quite the luxury to have your hindsight and experience on my side as I move forward in my business. Thank you, thank you, thank you.

May David Marcus have incurable dandruff and bad customer service for the rest of his life, since it’s clear that he’s sold his soul to the devil. Unless, of course, he has a visit in the night from David Marcus Past, Present, and Future and changes his course for the betterment of all.

Micah

I had a bad experience quite a while ago with Paypal. I am a stained glass artist and used to ship worldwide (very low volume, penny ante really). I had a customer in France who ordered a piece. I shipped it to them and 2 weeks later I get e-mail from Paypal saying that they were reclaiming the funds I had withdrawn. Evidently the stained glass panel was sitting in a customs warehouse somewhere in France. Paypal backs the buyer worldwide, but only backs the shipper in the US. This went on for 3 weeks. In the meantime Paypal went and took the money out of my own bank account which caused me to go over my limit and cost me $60.00 in bank fees.

Eventually the package was delivered. The big problem was that I could not get delivery confirmation on an international package! I was lucky that the buyer was honest and cancelled the complaint with the Resolution Dept. They could have very easily let it go, had my stained glass window and the $. Unfortunately I had to forgo international delivery altogether. It just wasn’t worth the financial risk. My stained glass business has grown a lot since then and I’m sure I am missing out on thousands every year because I can only sell in the US.

Danny

Hey Micah, that sucks – but why not get setup to accept payments some other way?

Micah

I think Etsy just started accepting other payments, but it’s kind of a pain. I will take checks, but I have to sit on them for a while to make sure they actually clear. That makes people uncomfortable. I use one of those card scanners attached to my smartphone for local sales.

What is sad with Paypal is that their problems could be solved in weeks with just a few good trainers. Customer Service should be EVERY companies #1 concern. Without customers there is no business…

Lisa Baker

Wow. And all this happened to the guy who’s known for customer service and always responds to emails within 24 hours, despite his large business. Paypal could stand to learn from you, obviously!

Danny

Haha, thanks! 🙂

Mauro D'Andrea

Hi Danny, I’m sorry to hear about such a problem. I’ve never had issues with PayPal and I thought it was a reliable company…I was wrong.
Are you going to search a new solution now?

Thanks for sharing your experience: it’s good to know it to prevent any problem in the future.

Danny

Yup – I’m definitely looking for an alternative. 🙂

Jackie Trottmann

Wow Danny, so sorry about your ordeal! It’s a shame that we don’t have enough hurdles with technology (alone) and all the sweat equity needed to pull off a launch, and then have to fight a battle that never should have been fought in the first place. Thank you for sharing so that I (and others) won’t be blind sided when the time comes. Someone very early on told me about limits on Paypal. So, from the get go I had those lifted, but who knows when this same thing can happen. Eek! Just recently they made security changes. I used to be able to do an invoice for larger website projects for my clients directly through Paypal. Now, you can’t process the payment from the same IP address. I’m sure this is due to all of the fraud and wonderful hackers out there. Ugh… what a world between trying to protect our websites and transactions. I guess all we can do is to keep working from the position of the highest integrity and be a force for good. Thank you for being so thorough in your posts and for your transparency. I look forward to hearing the outcome of talking with Mary on the payment processing from Illinois and your future recommendations.

Piers | KickstartersHQ.com

Being banned / nearly banned for doing nothing wrong is basically a right of passage for any online business. For any business doing real numbers, it’s only a matter of when, not if.

I play an extremely ethical, by the numbers game. I’ve had Paypal threaten different accounts of 3 separate occasions (once for a spike in revenue, once for daring to check my balance on holiday in Indonesia, and once for doing a larger than average transaction.)

I swear, the first real alternative to Paypal will gain a huge following.

Bitcoin is instant, secure, semi-anonymous, redeemable for US $ and costs nothing to transfer any amount by the way. 🙂

Lorraine Marie Reguly

I don’t use PayPal, yet, but was thinking of opening an account there. Now I am not so sure that this is something I want to do. Maybe I will wait until something better comes along!

Dan Norris

Been through this plenty of times. They are areseholes. With my current setup (a trust) I can’t even use PayPal which makes things very very difficult running a company in Australia that needs to take USD.

Sorry to hear your story.

Willi M

And I just thought the fee system was outrageous! I have had random payments held for no reason and gotten vague responses from customer service. But thanks to the comments in this post, I see I have a lot more options. I’ve jotted them all down. Thanks for sharing this bad experience, Danny. Glad it has worked out. Will be sharing this to a lot of people.

Cecilia Harry

What I find extremely interesting is that Mr. Marcus removed all tweets related to this incident between now and when I first looked at his feed this morning.

Danny

Hmmm, that is pretty damning. I’m losing more respect for PayPal every minute.

Lauryn Doll

This story is nothing less than reinforcement that I should look into GumRoad and Amazon’s payments first. This is soooo not cool.

I’m glad you’ve gotten your funds back.

Danny

Hey Lauryn, I was lucky – my funds were never held, and I was just dealing with the threat that they might. As you can see from the comments, many people were much less fortunate.

Fiona Prince

Thanks for your story, Danny. I am just starting to use PayPal more and am now more prepared for what could happen. I’ll take your lead on other payment alternatives and have more than one option for my customers.

I’m very glad the launch was successful, and am happy to be learning with and alongside you.

Sharon A

Really interesting, as I was just telling someone I was going to do a launch and use PayPal. Her response was that she got a spam email from a PayPal transaction and would never use them again. If you find an alternative, now that would be a post we all want to share. Thanks

Luana Spinetti | WritersMind.eu

Oh my, Danny— that’s the worst thing that could happen to any business!

Having your payment processor inefficient staff get in the way!

I’ve had similar issues with PayPal in the past (for a much lower volume) but they got resolved within 3-4 days. As Paul said, the European PayPal team is a tad more efficient.

But one of my aunties had to give up on her personal account. She has a disability that won’t allow her to go out on her own without help, so she could never verify her account with a credit card because she had no way to get herself one. She sent PayPal all the required documentation and they refused it, closing her account as they deemed it “dangerous”.

The whole family all shocked by the statement– what danger could a disabled woman constitute to PayPal?

So my aunt is sticking to Alertpay now, and I only accept PayPal payments under $500. Anything more than that goes to Alertpay (yes, I have one, too) or to my bank account.

~ Luana S.

Annie~SavorThisMoment

Is the problem that PayPal grew so quickly in the early years that now their departments are so disjointed? So frustrating! You handled it professionally, though!

Tim Woodbury

That’s terrible, but not unexpected from PayPal. I recall reading a similar account from Notch (of Minecraft fame) around the time of the paid beta. I think they froze something like $400,000 in the account.

Given the draconian fraud policy, its arbitrary enforcement, the scope of the resultant damage, and their inability (or unwillingness) to fix the problem, I’m very surprised there hasn’t been a class-action against them yet.

Carol Tice | Make a Living Writing

Hi Danny —

Thanks for the cautionary tale…if I’m doing a big launch think I’ll try to give Paypal a heads-up before I start.

But also, this is why I keep the balance in my Paypal account low…I try to keep the money moving out almost daily to get it out of their control as soon as I can. And also more out of the reach of scammers.

I’ve already had a hack experience where thieves attempted to get out $3,000…they then dove into my linked bank account and tried to suck out another $2,000 or so. Thankfully with help from my bank I was able to get all the funds returned. I now have multi-factor ID with a number-generator card and haven’t had any further problems with that.

I get complaints from people who buy my stuff all the time that they don’t want to deal with Paypal…maybe it’s time to research and find a better solution. I have had some customers refuse to buy because of having to go through Paypal, even if they’re using a credit card through their system.

Like you I’m in the middle of switching a platform, in my case from Wishlist Member to Digital Access Pass, and it’s all based around Paypal.

The problem is, what payment method would be more widely trusted and accepted? I’m not sure what the answer is to it. I build some of my products in e-junkie, but that just rides on the back of…you guessed it…paypal.

Danny

Hey Carol, you’re in the States, so you have lots of options. At your scale, you should be using a proper merchant account and payment processor; there are tons of options, and Authorize.net is probably an easy place to start.

Cindy Brown

I have been a faithful PayPal user for years. I have heard of such things, but didn’t believe they could actually happen until my own local bank put a hold on money from an inheritance I received. What? I can’t just have this money my grandma left me? It definitely showed me that they can control your money more than you’d like and there’s nothing you can do about it, so you’d better have a backup plan or a heck of a savings account built up for emergency.

I am sad to hear this account of PayPal. They have been a payment lifesaver on many occasions. I get spam scam messages almost daily, but always scan them carefully in case a real one comes in, like yours. That’s how I get paid to do my freelance writing, through PayPal.

Jared Latigo

Thanks for sharing your experience Danny. You’re right about the platform of people that are affected by things like this. I’m glad you decided to respectfully lay out all the details. The key there is respectfully.

The more we move into this new economy, businesses are going to have to pay attention to every little detail. Kind of interesting that something like terrible customer service would happen to you when that’s the very thing you preach. Maybe you can help them. 😀

Danny

Thanks, Jared – I really hope they’ll be able to get these issues sorted!

shaun

serious, i have heard lots of horror stories about paypal especially happening on internet marketers with big launches. Headache. What’s wrong with it? come on paypal…

Danny

Seriously!

Jennifer Kyrnin

Hi Danny,

Wow! Talk about unneeded stress.

I worked as a tech support rep for a while, and let me tell you, putting a wall around the customer facing people is very very common. It often felt like the rest of the company was terrified of customers. It was painfully frustrating for us on the phones too. We had scripts telling us what we were authorized to say (nothing) and often exactly how to say it. We had a limit of like $25 we could comp a customer for problems. Which was laughable when dealing with accounts like yours — “we can comp you with less money than you spend with us in one minute, have a nice day.” And then when the customer cancelled screaming at us, our managers would blame us for the loss. At one all-employee meeting a tech rep asked the CEO what was being done to fix the communication issues. The CEO’s reply was that if we didn’t like working there we could leave.

Unfortunately, that’s how I read @DavidMarcus’s reply to you. He’s not interested in customer service, he’s just intent on making as much $$$ for the shareholders as possible so his payout stays golden. And honestly, they’ve been around long enough that he feels there is no reason to care. As long as they are the only game in town, they can treat customers (and employees) like crap with no repercussions. Unfortunately the barriers to entry for a business like theirs are high enough that being the only game in town or at least Canada will probably be true for a while.

Customers are important, and until more companies start realizing that, we’re going to be stuck with the impersonal, automation driven robo-companies we have right now.

P.S. the company I worked for as a tech support rep is long gone. I like to think partially for treating customers like ATMs and not people.

Danny

Hey Jennifer, I don’t know – I agree with you about most things, but not about the idea that they’re going to stay the only game in town for very long. The truth is that it just doesn’t take thaaat much money to start your own competing bank – we’re looking at a few tens of millions dollars, which isn’t chunk change, but isn’t beyond the ability of most VC funds to put on the table. Disruption is coming, hopefully sooner rather than later!

Jennifer Kyrnin

I think I meant more that they’ve been around for a while already. But yes, disruption is coming and I think that the companies that will succeed are the ones that focus on customer service rather than on treating their customers as robots.

Here’s to sooner disruption! 🙂

Frank Daley

This is hilarious.
When I worked at the CBC (TV and radio network(s) for non-Canadians) the implicit sense was that Everything would be great if only we didn’t have to make those damn TV programs.”
And in a college I worked in (as a prof and a dean) the same attitude often prevailed.
“This place would work terrifically well if it wasn’t for the students!”

Jennifer Kyrnin

Frank: I lol’d when I read your reply. It seems really common that many people feel that their industry or business would be an awesome place to work if it weren’t for the product they sold or the customers they served (or in the case of when I worked at NETCOM, BOTH!) 🙂

Thanks for the laugh.

Kathy Slattengren

Thanks for sharing your excruciating experience Danny. I also use PayPal on my site so it’s helpful to have your story as a warning.

I worked in high tech customer support for many years and appreciate the value of providing excellent customer service. The PayPal customer service reps can’t feel good about the work they are doing and the CEO doesn’t appreciate just how damaging this poor service is to his business. When we treat each other with such a lack of respect, we hurt ourselves and our businesses.

Danny

Very true, Kathy. I wonder, then, why don’t they change things?

Jared Latigo

Likely because the big guys are the last to feel changes. They don’t have an active community so they haven’t noticed that customers now drive business decisions, not the other way around.

Lack of vision for the future would be my guess. They’ll feel it sooner or later, hopefully not too late for them though.

Kathy Slattengren

My guess is the customer support reps are following orders and do not feel empowered to change things. Despite working in a soul-sucking job, it may seem better than their alternatives.

The CEO probably views customer service issues like yours as pesky little gnats. His strategy of swatting the air and hoping the problems go away works in his eyes. He doesn’t realize he’s really poking at a hornet’s nest.

mary

Hello Danny,

I will be happy to help you. I hear PayPal stories every day! I am an integrity driven Merchant Card Processor in Illinois. I help businesses save money and get excellent service. IF your business has grown that much I recommend that you get a direct processor. PayPal is a 3rd party, which means the money goes into their bank, they take out their fees and pass the rest to you. This makes it extremely hard to balance your books and extremely easy for them to hold funds. Please let me know if I can help you. I will find a way to hook up to Office Auto Pilot or get you a new shopping cart that is compatible with direct processors.

We give you all your money so invoices match and then you are billed at the end of the month. We also make sure you are PCI compliant.

Let me know. Mary Ahart mahart@matrix-ps.com

Danny

Thanks, Mary, I’m emailing you. 🙂

Steven Washer

Look at that. Who says you have to have millions of dollars to play?
Nicely done, Mary!

Annie

Wow, bad experience. Sadly I wasn’t surprised about your experiences – I have read several stories similar to yours, written by frustrated marketers. In my experience companies that deal with their customers in this way, generally treat their staff the same way. You can tell a lot about a company by the way their employees treat you and the care or lack thereof that they show. Given this scenario, I’d be willing to bet that employees of PayPal aren’t treated well, probably receive little or no benefits and likely aren’t paid very well. When employees are not valued by a company they tend not to care about the customer and just put in their time.

Also, I have read stories written by other marketers who had similar problems not just with PayPal but with credit card companies, clickbank and other companies.

On the other hand, the banking and merchant services industries have grown increasingly regulated and some of these companies may be over reacting because they are concerned that regulators will fine or otherwise penalize them for not showing sufficient due diligence.

It’s kind of a sad state of affairs when succeeding and doing well in business somehow translates into being punished or at the very least incredibly inconvenienced and stressed out.

I hope you are able to sort things out with the other company you mentioned because I don’t think PayPal will change.

Annie

Danny

Hey Annie, it really is sad.

And I hope so, too – it’s just a matter of when Office AutoPilot gets that Beanstream integration done. I’ll be the first to flick that switch!

Tawnya

As a new blogger considering what products to develop and sell, I’ve dreaded the thought of having to use PayPal.

Some years ago I had a personal experience with them that did not go well. I settled a dispute concerning an order that I did not receive through my credit card company. At the time, I didn’t remember having used PayPal and, frankly, didn’t even understand who they were.

Anyway, they sent an email to me cussing me out for not settling the dispute through them! I was astounded that a professional company would behave in such a way. I vowed to never use them again. I have even avoided purchases that required their services.

Danny

Wow, that’s insane – I’m shocked!

William Cowie

So sorry to hear about that mess!

A name I haven’t heard mentioned here is Square. These are the people that started with the iPad gadget and have expanded to payment processing. They recently landed the contract to do all Starbucks’ processing.

My volume is pretty low but I signed up for a free account and so far it has worked flawlessly.

Danny

Hey William, thanks for the tip – I’ll investigate! 🙂

Jared Latigo

I’ve heard they are good as well. They respond very humanly on twitter too.

Danny

Thanks, Quinn – I’m looking forward to reading these!

Peter Sandeen | Conversion Specialist

Hey Danny,

wow… Not much else to say I guess.

My account was limited a while back as well because of some missing documents. But (fortunately) that was fairly easy to resolve…

I guess it would be worth it to contact them about possible spikes just to be able to say I’ve done it if/when they decide to get curious 🙂

Danny

Yeah, not that it did me much good when I did it… :-S

Peter Sandeen | Conversion Specialist

Yep, but maybe if they decide to take some more drastic action it can work as proof of “good intentions” 🙂

Freddy Wilson

Thank you Danny for this post. It just reassures my experience with Paypal, which is almost similar. I had an account setup for one my my clients (Non profit organization) and usually they bill subscription on their website that totals less than 500 dollars every month. We had a big event and some of the donors decided to pay on the website using their credit card, thus will gather some airlines miles or percentage back from their credit card company and paid on the website which is using paypal. Guess what ? Your story was revived, and paypal suspended the account and restricted access and could not even withdraw the monies from the account. It took me three weeks to have things resolved to get the money out of the account and had to program the website to use authorize.net to collect the other monies.

I know paypal has no monthly subscriptions and all that, but once their automation kicks in. GOOD LUCK Talking to their people. and yes they expect you to be nice in responding to their survey!

Danny

Hey Freddy, that’s ridiculous, and awful at the same time. We’re definitely investigating alternatives – has Authorize.net worked out well for you?

Freddy Wilson

Authorize.net was my backup plan, the only issue with it is the monthly fees and setup fees. Many clients avoid those fees, specifically small businesses [that is why they prefer paypal].
Authorize.net support was not the best as well, but by the time my issue took to be resolved with paypal (Simply waiting for an agent who speaks little English to call me and understand why more money is coming into clients paypal account) we were losing money from people signing up and paypal declining the payments telling clients to call the vendor for details. So authorize.net was the alternative and programmed the website to be able to communicate with authorize.net and accept payments.

In our CMS system that we developed, we made sure not to be dependent on any specific Gateway in tracking invoices and payments. We customize the website to accept any credit card processing company and all what the processing company will do is receive an invoice number from our client website and a balance total and send us confirmation when payment is processed with success. The back end of my clients website will handle the rest (Client Information (Other Than Credit Card Data), Invoice details, remaining balance, etc..).

Liz

The sad thing is that about 10 years ago or so, I really like PayPal. If I had any issues I could call and get it resolved in minutes. Once they virtually took over online payment systems, they really went downhill. It was like they had a goal of conquering the internet, they achieved it, now we’re all just peons at their bidding. I’m sorry you had such a terrible week+ dealing with this. You deserve a good massage, for sure!

Danny

Hey Liz, I think you’re exactly right in your characterization of it all; the upstart good guy has become the evil big bank; it’s Animal Farm all over again.

Matt Goffrey

Back in 2000 these guys held over 300 grand for 180 days. At the end if it they reopened my account in full, money still there, not so much as an apology.

I transferred the money out, closed the account, and refuse to use PayPal FOR ANYTHING. I won’t pay anyone or be paid by them.

There are literally tens of thousands of people that have been screwed over and at this point it is obvious to me that not only does David know about it he just doesn’t care (see the details of the class action law suit against them)

If you use PayPal as your payment procrssor there is only one question to ask yourself, “How long will it be until they screw me over (not if it will happen, only when).”

Agota

Hey, Matt!

What do you use instead of PayPal?

I think the only reason people who got burned continue to use PayPal is that they don’t see any viable alternatives.

Jared Latigo

Authorize.net – usually cheaper but slightly more complex

Stripe.com – DIY but geared to developers more

Square.com – Super simple

All good alternatives but none offer exactly what paypal does. But they do have the one thing paypal doesn’t…customer service.

Danny

Thanks, Jared – I’m going to be investigating Authorize.net. 🙂

Frank Daley

Danny, not sure authorize.net handles Canadian companies. They didn’t about a year ago.They wanted me to go to the US and open a US bank account to do it.
I’m wondering if the TD bank–which is growing in the Us–might be of service here. (And service to themselves b/c they would make more money from small entrepreneurs. Anybody have contacts there?

Danny

Hey Frank, see my comment below – the big banks are usually the last ones you should turn to for this. And I’m pretty sure that Authorize.net does work in Canada now, but I’m investigating. (also investigating some other options that are looking very promising)

Danny

Hi Matt, that’s terrible, but not surprising. Has there already been a class action lawsuit? Where can I read more about this?

Alastair McDermott

I had a similar experience with my *already Verified* Business Account, except they actually limited my account. I had provided them scans of:

My Drivers Licence
My Passport
My Personal Credit Card Statement
My Business Bank Statement
My Registered Business Name Certificate
My Registered Business Number (similar to LLC #)

There wasn’t an open case when I logged in, even though they gave me a Case ID: PP-001-726-405-xxx

My favourite line: “We want to help you but we’re not able to respond directly to emails sent to this address.”

(You can even see this in attitude in David Marcus’s reply to Danny’s tweet.)

They have a monopoly in the market and until that changes they can continue to get away with treating small businesses like this.

Danny

Yeah, that one drives me crazy, too:

“We want to help you but we’re not able to respond directly to emails sent to this address.”

Ridiculous.

Al McBride

That is extremely frustrating Danny, no doubt about it.

The greatest fault was their poor customer service as well as not being crystal clear with exactly what the problem issues were and how you could go about resolving them. Why weren’t you given an account manager that you could interact with and would be responsible for your case? Why was there not a backup if they’re overwhelmed with work or out on leave? Surely these are relatively simple systems to put in place, not a million miles from a standard ticketing system. Also if they’re working from a set of rules and internal regulations why can’t a practical version of these be supplied to you?

As you said, their request wasn’t unreasonable, the hoops they made you jump through were, all of which were both frustrating and hugely stressful. Also, how much money did it cost you because you were spending so much time clarifying what Paypal wanted rather than working on your business and launch???

They’re a tough crowd to work with. For example when we were looking into payment services we couldn’t even go with Paypal, as they generally only allow US or Canada based businesses to do subscription billing, not people in Ireland, even though Ireland is where they have their European HQ!

In the end we went with Clickbank. I was concerned about the reputation they have for the various levels of quality of people who sell with them, some good stuff and lots of trash, but on the plus side it had a built in affiliate management program. Best of all, with a few key questions and emails back and forth we began. They were reasonable, explained where their concerns lay over different aspects of our billing and our guarantees and we all worked it out.

The crucial difference is, they hold our funds for 60 days before we can reach them, which is relevant because we have a 60 day money back guarantee, so they know the money’s there in the unlikely event that every customer asks for a refund. It’s far from ideal, but we went with it.

In the future we’ll be looking for a more dynamic solution but the pro’s outweigh the con’s at the moment and crucially we were given a real person’s name who was clear with us about both their concerns, rules, and how we could work it out. This is all the more appreciated in light of reading your horror story article!

Danny

Hey Al, that really is frustrating – and you’re right, the crazy part is that none of what they should be doing is particularly hard or complicated.

ClickBank is a possible alternative, but they’re a mixed bag as well; very restrictive, bad associations, and very expensive, too.

Sigh… the search continues. 😉

Agota

Hey, Danny!

I’m sorry to hear about this whole PayPal mess.

Today, I also had a pleasure of dealing with a limited account, and PayPal’s disorganization. I was asked to provide a photo ID, which would be fine, if there would be a way to send them the scan of my passport (it wasn’t possible due to a glitch in the system). I got lucky today because the guy I spoke to this morning was very helpful and resolved everything for me (as opposed to the lady I spoke to yesterday, who didn’t know what to do, and didn’t sound very competent to be honest). Nevertheless, I’d switch to an alternative system in a blink of an eye now, because that’s not the first time that’s happening, and the last time my account was limited was way worse. That is just annoying.

I’m also worried about using PayPal for business now. I mean, I keep hearing these horror stories, and I don’t want PayPal freezing my account for extended period of time in the case of a successful launch. However, is there any alternative to PayPal?

It seems we are stuck with a service that’s getting worse and worse.

Danny

Hey Agota, that’s really terrible – maybe we spoke with the same incompetent woman?

I’d definitely switch off if I were you, and I’m looking to do the same, but alternatives are few and far between. There have been some good suggestions in the comments here that I haven’t investigated yet. I’ll definitely share what I find, and I’d love it if you did the same. 🙂

Agota

I’ll probably use Gumroad for my e-book launch ( I’ve heard good things about them from several people). I’d be even more enthusiastic about them if they’d have an option to pay out money straight into my bank account (they only pay out international sellers to their PayPal accounts). That’s still a step in the right direction, though, since Gumroad handles all the sales, therefore PayPal’s possible hangups won’t interrupt with the launch itself.

Danny

That sounds like a good plan, Agota – I’ll have to look into Gumroad! 🙂

Norman Tay

This is really horrible. I am really going to re-consider using Paypal in the near future. This is also not the first time I heard Paypal rejecting accounts base on their understanding of business models.

Danny

Yeah, and it’s not like they’re really trying very hard to understand…

Monica Leonelle

Many startups use Braintree or Stripe. I used to work in payments processing and we saw these stories all the time; i didnt work with the accounts directly but I think your issue has to do with risk.

The problem is that PayPal is not upfront about their risk management and doesn’t vet its account holders before essentially guaranteeing them against chargebacks. 6 months is not actually long to hold money in credit card processing because people can issue chargebacks at any time during that period, and the gateway provider is on the hook to the banks for the money. However, PayPal has no idea who they are guaranteeing and often get aggressive when they see unusual activity on an account. A more typical implementation of how gateway provides solve this challenge is putting a running 6 month hold on say, 5-10% of the transactions until the account holder generates enough processing history to build trust regarding chargebacks. The terms often depend on how good your credit is, how much processing history you have, etc. At a better company they notify you of all of this upfront and walk you through the process, though.

I would recommend looking into Stripe or Braintree to see if either matches your needs and works for you in Canada. Some companies combine them with Recurly to do recurring payments, though it’s not necessary unless you’re doing something complicated. Both of these companies have fairly simple implementation and solid customer service; they also collect the appropriate information as you grow. And they both integrate with Wufoo forms, so you can quickly build a simple order form on your site if you’re not a developer and don’t want to hire one.

Danny

Hey Monica, thanks for explaining this – it’s helpful, and really raises questions as to why PayPal behaves in a way that is so stupid, and so dangerous to their customers, when the rest of the industry has long since figured out a better way to handle this.

I’ll investigate Braintree and Stripe, and really appreciate the recommendation – thank you!

Quinn

Yuck! But your professionalism in handling it was AWESOME! Thank you for sharing your experiences with us as “lessons learned”! At least now I will be prepared for possible problems.

The investigative show “60 Minutes” recently profiled the credit reporting companies and their gross mismanagement practices. Perhaps they, or another show like them, would be interested in highlighting the problems with PayPal.

After all, PayPal’s internal processes are causing severe problems with small businesses, which is detrimental to the economy that’s still struggling to recover.

Or – does anyone know of a good law firm that would consider looking into bringing a class action suit against them?

Danny

Hey Quinn, now that’s a great idea – I think a 60 minutes segment on PayPal would go completely viral, and I’d definitely get behind a class action suit – I’m pretty sure that we could have a list of thousands of merchants onboard within a couple of weeks. Does anyone know a law firm that might want to take this on?

Lily

Danny, Quinn posted this in our networking forum and it started a torrent of discussion about all the problems, both technical and customer service based, that we have experienced with PayPal in our businesses.

Stay tuned for my blog post: That One Time PayPal Called Me a Whore.

Danny

I can’t wait to read it!

VintagePhotographr

Your experience with Paypal has been my experience too.

If Paypal were to suffer a sudden bio-exothermic tragedy I wouldn’t dis-integrate my trouser fastenings to micturate upon them.

shelly

Websites are available which list the personal emails for every staff member of Paypal–every staff member, including CEO. For us, this was the only recourse. Of course they threatened us, but only then did we see results. My countless calls circumvented to India did nothing.

Danny

It’s awful that you had to go to such lengths just to get your issue resolved – not fair! 🙁

Katharine Trauger

Power corrupts.
Absolute power corrupst absolutely.
As we work hard to be big receivers of income, we need to remember that.

I have always, always had troubles with PayPal, with my penny-ante transactions. You know the only reason I use it is that I thought I had no choice. Hmm.

But thanks for this explanation. It sheds light on how things seemed from this side of your frustration.

Oh, and does it explain why, when I created a PayPal account to receive my contest winnings, I had to change the password twice in two days, just to look at it? That was a bit scary.

And tell me, when a guy from PayPal calls and says, “Hi, I’m from PayPal and I need your email address and your bank account number,” how do we know it’s PayPal??? When I asked him that, he chuckled, as if there really is no way to know that. I hung up and called PayPal immediately. He was for real, it really was them trying to resolve my issues. But at what price?! I just give sensitive info to anyone who calls, claimin to be PayPal? Right.

Danny

That really is scary, Katharine – very scary. 🙁

Mia Sherwood Landau

Danny, your courage and candor are super inspiring. Thanks for literally bringing your nightmare to the attention of the blogging world. It matters, YOU matter, and you magnified the sentiments of MANY merchants I’ve seen in forums for years. There comments were buried, yours are published. Good for you! Whenever I look at an item on eBay and on the listing it says, ” PayPal not accepted,” I know that seller is voting with her feet. Hopefully we can all take a cue from your story, and find better alternatives now. And thank you for sharing those with us, too!

Danny

Thank you, Mia. I’ve seen those comments in forums here and there, but never thought they were so pervasive. That’s why I published this – so PayPal can’t pretend that these issues are fringe cases and that hardly ever happen, as we can see from all these horror stories that people are sharing in the comments.

Renia Carsillo

Talk about holding your feet to the fire!

I went through a similar incident with Paypal in December as I phased out my training company and went to the freelance writing full time. Paypal did place a hold on funds, for nearly two months, luckily it was a small enough amount not to cause a financial burden. However, it took a copy of my tax returns, articles of incorporation, bank statements, and finally a letter from my attorney to resolve the issue.

I will never use PayPal for anything where I have a choice again after being an eight-year customer.

Glad to know your situation was resolved before it caused any larger issues!

Danny

That’s ridiculous, Renia, I’m really sorry that you had to go through that.

Do you have an idea of what you’ll switch to instead? I’m looking for alternatives…

Renia Carsillo

I’m in the US, so I think I have a little easier time. I use Square for anything in person (back of the room at events, classes, etc). I’m going with WePay, but I think you must have a US tax id to use them.

Danny

Ah, yeah, it’s a lot tougher for Canadians, unfortunately. 🙁

Stellare

Thanks for sharing! That is very useful information for other users of PayPal. I’ve had problems with them too, to actually transfer funds coming into my PayPal account to my bank account. My impression is that PayPal isn’t working very well – and based on your unfortunate experience I guess I cannot expect much in terms of customer service.
Thanks for preparing me for MY hell with PayPal. 🙂 (It is easier to endure when you know what to expect..)

Danny

Haha, I’m not sure if that’s optimism, or pessimism, or both rolled into one fun package, but I like it! 😉

Rodney C. Davis

Paypal is terrible. I’ve been using them for years to make payments, and I’ve sent thousands fo dollars to vendors through them over the years. Now that I am trying to set up to also recieve payments from my start-up, I find out that that is not possible for St. Maarten, the little island I operate from. How can it be that they have no problems whatsoever with my payment transactions (and they’re substantial ones) for years, but all of a sudden my island doesn’t qualify for them to effect transactions in the opposite directions? This makes absolutely no sense, and I still don’t know where to turn.

First chance I get, its “bye-bye” PayPal! And I don’t care if they fix the problem before then either.

Danny

I’m with you, Rodney. Let me know what you find, and I’ll share my notes if a good alternative comes my way, too!

Adam Gottlieb @ The Frugal Entrepreneur

Very nerve-racking and frustrating!

But, as Liz mentioned above, you really could’ve erased Paypal’s name and entered in its place such customer favorites like GoDaddy, Comcast, any major US bank, and, ahem, Ebay…

The worst part to all of this is that there are so many technologies/platforms out there that enhance communication and the exchange of data- especially customer-related data- both within organizations and outside of them. The fact that these companies AREN’T using them or at least not properly, just shows that they don’t care.

And why SHOULD they? They’ve got enough of a monopoly to keep all the bank accounts of all the top players very well padded indeed. Like you said, there may be alternatives to Paypal, but none of them can really compete with the big “P.” They know that and the “cost” of changing their system is just not valuable enough to them.

Danny

Hey Adam, you may be right, but I really do believe that you can be a lot more profitable by doing a better job for your customers. Just because companies like GoDaddy, Comcast, major banks, etc. are lazy and stupid doesn’t mean that they have to be that way, or that it’s better that way.

Adam Gottlieb @ The Frugal Entrepreneur

A hundred percent!… But getting THEM to change is not the way to do it. How many of these kinds of companies have truly turned over a new leaf in response to negative customer feedback???

There needs to be a literal movement of businesses- big and small- made up of people who think differently, who operate with a sense towards giving, not just taking. In CAN happen. But we have to look inward first, change the way WE do business, and the rest of the world will follow…

Danny

Amen. 🙂

Matt Whitcomb

Danny,
That was a brutal experience. I’m sorry you had to endure it.
However, the upside is that you’ve run interference for all your clients. I think it’s rare that a business owner like you is so transparent with their challenges, but that information is SO valuable to warn others of potential problems.
I appreciate your openness and willingness to share.
Matt

Danny

It’s the least I could do, Matt – try to make a little bit of lemonade out of all these PayPal lemons. 😉

David Tong

That’s terrible but not unsurprising. It’s a collective problem small businesses outside the United States and United Kingdom.

With the difficulties of obtaining merchant accounts for most countries, particularly smaller transaction volume areas, we’re further held hostage by PayPal.

Like true CEO fashion, Marcus has been a perfect Dilbert CEO here.

P.S.

For a second, I thought the post was about me and my son, Marcus

Debbie Gioquindo, CSW, WLS

We had a similar issue with Paypal. A company purchased a large quantity of glasses from us and had to purchase on two different days. Paypal questioned and held the funds. I responded to both of then issues in the resolution center with the same information. Meanwhile the glasses purchased were delivered to client and our funds were hung up in Paypal. I called Paypal after one of the transactions was refunded to customer and the other was still open in the resolution center. Was not happy and they told me that I had to contact the customer to get the payment because they are refunding it. THEN…the second payment actually went through and was released to our account. So I responded to both issues with the same documentation and one charge was refunded to client and other was put through to us. We had to go to the client and ask them to send us a check. What a hassle and it has ruined the relationship between the client and us.

Danny

That’s so ridiculous, terrible, and arbitrary – I’m so sorry you had to go through that, Debbie, it’s really inexcusable. 🙁

David

Danny,

Here you have a company that found a niche, ran with it and made a fatal mistake, they became a mainstream-thinking corporation! I would say they are ripe for the picking, meaning someone who sees this could well come along and steal what was an excellent idea to begin with, something to think about. The term customer service has become cliche beyond reason.

Danny

Exactly! Someone should just sweep in and take over the niche – customers would fight to get in line to switch over (I would!). Any takers? 😉

Kim

Oh, my head and my stomach! I wanted to reach out and slap everyone at Paypal. Why is common courtesy so difficult? Why is customer service so hard to provide? While loutish behavior like this makes it easy to rise above the pack, it makes it so difficult to do business!

Re your reaching out to David Marcus, sure that he wasn’t aware of how his people were behaving. Let those scales fall from your eyes, Danny. (Yes, this is your too darn happy optimist talking.) Sadly, in my experience most companies who do business like this have leaders who are fully aware and tacitly or overtly condone (in the privacy of their offices) this behavior.

These thuggish tactics serve them well. People have no place to go, and most likely fearfully toe the line (several steps back, actually) in an effort to not awaken the beast. The company benefits from your tiptoeing around their capricious and unlawful methods.

What’s that saying? Oh, yes: The fish rots from the head. Clearly Marcus does not care.

Danny

Hey Kim, you might be right, but I hope that you aren’t. I still want to give them the benefit of the doubt, and that ridiculous survey would seem to suggest that they at least know what sort of issues they might be having…

Kim

I would love to be wrong, Danny. My suspicion is that the survey is just a “feel good” mechanism meant to mollify the customer, to give the appearance that they care and that they might actually do something with the information.

Your interaction regarding the “left hand/right hand” told the backstory, I believe. If leadership is not interested in doing the hard work of leading, of setting the expectations that every employee do their jobs well, or they can go elsewhere to seek work, the leadership will get what they are getting at Paypal.

Danny

That’s a good point, Kim. When I spoke with the PayPal rep, she assured me that the person I spoke with would “receive coaching”, and yeah, that sounds like code for “we aren’t going to do anything, but let’s pretend we will”; I can tell you for sure that something like this would never happen here at Firepole Marketing on my watch, and if it did, whoever was behind it would be fired the moment I found out about it.

To be fair, though, David Marcus has thousands of employees; at my scale, I can fire and replace one bad apple (or, for that matter, I can be careful to only hire and train good apples, which is what I do). At PayPal, for all we know this is a cancer in the organization, or at least their Review Department; you can’t just fire them all…

Kim

Yes, they do have thousands of employees, and it is far easier to keep tabs when you have face to face interaction with every employee every day. A bad apple naturally stands out when you set high standards for how you do business.

While I agree that there is a cancer in the Review Department, I respectfully disagree about firing them all. First, I would set the standards, and make sure there was absolute crystal clear clarity on expectations. I would provide training, support and feedback, and an open door for reluctant employees to either walk out through under their own power, or to be shown through if they choose not to meet expectations.

When you have one poison apple in a large organization, it isn’t generally able to ruin the whole barrel. When you have an entire department, they can severely impact the company.

Short story: at our family custom cabinetry business, there was a whole team that was performing badly, and exhibited horrible attitudes, thought they were untouchable/too important to be let go and was suspected of drug use (not good around power equipment!). After much time trying to work with them, etc, and much concern about being able to maintain the schedule, we fired the whole team. Every. Single. Person.

The other employees came to us with tales of other bad behavior we hadn’t known about. They were THRILLED this group was gone, and were happy to pitch in as needed.

Lesson learned. Bad apples will rot the individual departments, and eventually, the business, if allowed.

Linda Lochridge Hoenigsberg

wow. I have heard about this crap for years. I just went through a 75 day hold on over $600. That wasn’t fun, but nothing like what you are talking about. Keep us updated on any other options you hear about, would you Danny?

Danny

Definitely, Linda. 🙂

Paul Wolfe

Danny

Interesting post.

I’ve had a couple of issues with Paypal – but my experience with dealing with them is very different. Over here in Europe Paypal have a business team at their European head office in Ireland…and getting them on the phone during working hours is very easy.

My account actually got limited six months ago – what that means is that payments are still taken, but you can’t withdraw any money. And the thing that triggered it was that I accessed my paypal account from two different computers at my home office. I phoned them…they asked for a couple of details….I sent those details. Everything was sorted within 48 hours.

But the situation made me very cautious. If you’re in America, I believe Amazon have an option that you can use to take payments for digital goods. I am hanging out for it to be rolled out here in the UK.

Hope everything else is good.

Paul

Sharon Lippincott

Amazon? From what I’ve been reading, they are no better than PayPal. I’ve read blog after blog where authors are not receiving royalty payments, accounts are messed up … when do we go back to cash in the mattress? The digital money world is subject to meltdown with no notice. But, as Danny says, we are STUCK! And we’d better have some cash in the mattress and a hoard of food and fuel to tide us over while we resolve things — if indeed they can be resolved.

Sorry to sound like a Dooms Dayer, but time to get real and be prepared, fellow Scouts.

Danny

Hey Sharon, that sounds a bit alarmist to me – you may be right, but I still believe that there’s got to be a good solution out there, we just need to find it.

Steven Washer

Holy Crap, Danny! This is awful. I had no idea that our Canadian colleagues were so hampered by such limited resources in the way of financial systems. On the other hand, we’ve used PayPal over the past few years, gradually raising our monthly volume with them, so we probably dodged that particular bullet. I say probably because I see now there is no good reason to believe that solid, ethical business practices mean anything to this company.

We will definitely be looking to limit our exposure to PayPal in the future. A shame, because the system itself was brilliant. It just shows you how bad management can ruin any good business.

I hope you find an alternative. This sounds like an amazing business idea for someone who can raise a lot of money in a hurry. Why don’t you and I go on Shark Tank and get Kevin O’Leary to finance our online payment processor start-up? Your story alone will be worth an additional $10,000,000. 🙂

Danny

Heh, yeah, seriously. I really wish someone would pick up this challenge and do something about it; $10M isn’t a big deal in the big scheme of things. Wouldn’t this be the kind of business opportunity that Richard Branson would jump at?

(But then, we don’t even need a new business for this – once Office AutoPilot figures out the integration with Beanstream, we’ll be switching back to that.)

Steven Washer

Well, I’m glad you like Beanstream. I had never heard of them before this post, and evidently neither has Office Autopilot. Do you know of any inherent reason they work better internationally than PayPal?

By the way, this is one reason I like Infusionsoft. You can have lots of payment processor options and turn them on and off at will.

Danny

Hey Steve, Office Autopilot knows about Beanstream; the integration has been on their requested feature list for a very long time.

And I’m guessing that Beanstream works better internationally because they’re based out of Canada.

I’ve got to say, the list of reasons for sticking with OAP vs. switching to InfusionSoft is getting shorter and shorter…

Frank Daley

But isn’t Infusion soft for people who are well into the biz?
Too expensive for start-ups?

Danny

Yeah, but OAP is more or less in the same price range…

Ian Brodie

Awful!

On the David Marcus and AskPaypal front, my experience is that in situations like this when they ask “what can we do to help” after the event what they REALLY mean is “can we stop the bad PR?”. They don’t really care about the issue. They just want to seem like they’re doing something.

Ian

Danny

I wish I could disagree. 🙁

Cecilia Harry

Danny, thank you for sharing this experience, and Ian, you are exactly right. This whole story is an example of some problems deeply rooted in the culture and feedback loop of PayPal. The CEO’s auto-reply to Danny on Twitter makes me nauseous! I shake my head thinking of all the large, successful firms who still operate in silos and can’t grasp how important relationships with their clients are.

I’m currently a PayPal user and will continue to be one for now, but when I’m ready to launch, I will have explored other alternatives and given great weight to how I’m treated as a customer.

Frank Daley

That sounds exactly right Ian. The trouble appears to be that PP is ( almost) a monopoly. The alternative (I haven’t read all the following emails) is to use the bank cards and they are problematic too.

Shannon Lagasse

So glad I haven’t started using PayPal yet! What are your thoughts on Dwolla? I was invited to create an account the other day.

Being someone who has had a low volume of sales in the past, I was thinking that PayPal was the best option because A) it’s free to create an account, B) it’s a highly-used service (that I thought was reputable), and C) it has all the safety and security measures in place.

However, my plan is now to increase my sales. So this could happen to me, too. Thanks for sharing and I’d love to hear your advice for the small business owner who is looking for something similar to PayPal but without the hassle.

Danny

Hey Shannon, that’s a great question. I haven’t used Dwolla personally, but my understanding is that you need to have an account on it, kind of like you’d need a PayPal account to pay for something with PayPal. The way that we use PayPal is on the back-end, as a merchant account/payment gateway – from the perspective of the customer, it just looks like any other order form, where they pay with a credit card – you really need to that if you don’t want to lose customers, and I don’t know if it’s something that Dwolla can do…

Shannon Lagasse

Love that you added in the full disclosure at the beginning of the article! You fucking rock! :]

Yonatan Eliyahu

I’m sorry about your experiences with PayPal, but thank you for sharing them with us. You have given me all that I need to know I must choose another payment system for my business when I launch.

This ought to become a centerpiece to the bad business practices of PayPal, even to the point of reaching the FTC if they could do anything. PayPal is nothing more than a big bank with a bad business model themselves.

Shame on you PayPal. Shame on you!

Jon Morrow

The unbelievable thing is you got off easy. The same thing happened to me several years ago, and they, no joke, confiscated all of the money from the launch and canceled all future recurring payments. It took six months and every connection I had to get the money back and get my account reactivated.

That’s why I no longer offer them as a payment option. It’s just too risky.

Gary Korisko

Jon:

Danny shared in the post who else he has used. Who do you see as viable alternatives?

Thanks!

Danny

Wow, Jon, that’s really terrible. Honestly, I can’t believe that they don’t get sued – I guess it helps that they go after small merchants, and kick us when we’re vulnerable, so it’s a wonder if we even survive, never mind being equipped to respond… :-S

Rodney C. Davis

Now I’m really pissed. That’s illegal, criminal behavior! There’s just no other word for it. I find myself having to calm down just so I can type without making too many errors.

I’ve tried looking at it from their point of view. I suspect that money-launderers target PayPal a lot, and they’ve been burned before, and have to be very strict with adhering to international regulations. But don’t tell me that a company this big doesn’t have the resources as yet to quickly find out what kind of transactions are legit,and what kinds are not. IMHO, the sheer number of small payments to the account from all over the place on the globe should tell them they’re probably not dealing with some illegal outfit trying to wash their money clean, and that they should proceed with caution.

BTW, thanks Danny. I’m looking into beanstream. Hope they can work out for me.

Danny

Hey Rodney, I know what you mean, and you aren’t the first person is this comment thread to mention criminal behavior; there’s even talk of a class action lawsuit (but who knows if that will get off the ground).

I hope Beanstream works for you. There have been other solutions suggested in the comments as well, that I will investigate, and I’ll let everyone know what I find if there’s a good alternative – it’s just a matter of time…

Tasha Turner

Amazingly bad business and business model. Sorry to hear not only about this situation and the stress it added but the lack of real response from the president of the company. If I’d been him… Hey if you’d been him you would have read a few of your posts about your launch, the details of Our companies failures, looked into it internally, and personally got back to our customer while finding ways to permanently fix the problem. Big business needs to realize that new companies are going to show up as competitors and all us unsatisfied customers are going to jump ship cackling gleefully as we go…

American Express has a fantastic fraud division and I’m sure they handle as much in stolen credit cards as PayPal does with money laundering. So I know it’s possible to be good with the consumer and hard on crime at the same time. Hey maybe PayPal should hire Amex to teach them how to integrate their systems and departments and make customers experiences better.

Liz Levenson

It constantly amazes me that such established companies have such glaring communications issues – not just with customers, but inter-departmentally! I’ve had a similar situation where the company caused ME hell because THEY didn’t know how to talk to each other.

Last year I went to Moscow for 10 months and called Wells Fargo a week before to let them know I was leaving and to put it on my account so they didn’t worry when withdrawals were being made in a high-fraud country.

And wouldn’t you believe it, within 3 weeks after getting there my card stopped working, with no email, no phone call, no communication at all as to what happened. My parents called 5 days later to say a new debit card had been sent to them. What??? I had been in a foreign country for nearly a week with no access to my money for exactly the same reason that PayPal employee flagged your account – they didn’t bother to check all the details.

Sorry, this is just another rant, but it definitely makes me give second thought when I use a large organization for something important like holding your finances, whether personal or business.

I’m going to be using PayPal for my upcoming company’s payments, but as soon as my volume gets high enough I’ll definitely be switching to a smaller merchant account company. This post only cemented the need to do that. Thanks for sharing your pain with us.

Coco

Ugh. Wells Fargo. Same thing has happened to me and to my son in college. It’s as though you need to have a back-up bank account when you have Wells Fargo.

Pete

If you think they’re bad you should try dealing with Google’s Adsense team sometime.

Danny

Hey Pete, I’ve dealt with the AdWords team quite a bit, and I agree with you – they’re just as bad. 🙁

Pete

And people laugh at Comcast for their customer service snafus (which are well deserved), but they’re a dream compared to the likes of Paypal and Google.

Cheryl Pickett

Hi Danny,
I thought my recent issue with them that wasted 2 hours of my day was ridiculous. Sorry to hear about what you went through. There are no words to describe that level of ridiculous.

My issue also started with an automated email. Something about instant payment notifications. I called and talked to 4 different people (at least I did get humans) all but one of which really couldn’t help me much and it also took my calling back after the 3rd person’s transfer disconnected me.

In the end, we determined whatever this feature is, I was not using it/did not need it. So it was deactivated. Still getting the same automatic emails. Eventually, I may call back and try to get them to stop again, but clearly only when I have time I can waste talking to them.

Stephen Guise

This is very interesting. I’m going to sell a product on the web soon and I was looking into using Paypal. To say the least, this article has made me think, “Hmm, I wonder what other options are out there.” Thanks for sharing your experience Danny.

Gary Korisko

My gosh, Danny!

That’s terrible. I got a small headache behind my right eye just reading that.

I’m a (so far) satisfied, long-time PayPal user and this has given me pause to say the least. I’m sorry to hear you had to go through that hell for a week – and glad that in the end the problem was resolved. At least thanks to your diligent stalking of the right people. by your account, it does seem like one phone call could have made all that extra work and stress avoidable.

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