PayPal Money Holding Practices
At some point, many eBay sellers find that PayPal places a "hold" on a buyer's item payment. Suddenly you discover you don't have access to your funds, despite a sale going through successfully. Why do eBay and PayPal do this?
In January 2012, eBay changed its policy on holds, to "increase the quality of the auction experience," according to an article in The New York Times. It's not a perfect system, and there are some ways to potentially avoid having your funds held. Before you let frustration completely engulf you, there are some basic things to know about PayPal payment holds.
The Basics About Paypal Payment Holds
Payment holds can happen even to sellers with a perfect feedback and delivery record and an eBay membership that dates back years or even more than a decade. A hold does not mean that eBay is about to suspend you or that you're on a "blacklist" of some kind.
And they're not indefinite. Payment holds last no longer than 21 days, and in some cases they may be shorter than this—holds can be lifted along the way as the status of the item is updated (when it's marked shipped and a tracking number is provided, for example, or when the tracking number reports delivery, or when the buyer leaves feedback for you).
It's not going to affect your seller reputation. The fact that a payment has been held is not related to your buyer. The hold is known only to yourself and to PayPal.
So if it's not about you and it's only temporary, why has it happened? What is PayPal doing?
Common Reasons for Holds
In general, it's not possible to know all of the reasons for a hold, and it's likely that the decision wasn't made entirely by humans. When a hold is placed, eBay and PayPal are basically engaging in a kind of risk management on their end; they want to make sure that funds are readily available in case a refund has to be issued, and want to give the transaction time to play out before the funds are released to you.
Here are some reasons that a hold might be placed:
- It's a Risky Type of Item
Most sellers know that some categories on eBay are particularly subject to fraud and poor seller behavior. Classic examples are areas like hot consumer electronics and phones, tickets and gift certificates, and categories in which fakes and counterfeits are common. Many more holds are placed for items or categories that have been problems on eBay's end than for items or categories that are relatively trouble-free.
- You're Acting Out of Character
eBay tracks how much you sell, what sorts of things you tend to sell, and how your transactions have gone in the past. If as a seller you suddenly begin to sell in ways that are unlike your past activity, such as sales in a new and risky category, PayPal may place a hold for a period of time to ensure that you really are you. Identity theft is a constant problem for online merchants, and PayPal is no exception.
- You're Relatively New to eBay
If your selling history is somewhat limited—just a few items sold so far, for example—and the listing is relatively high in value or in a relatively risky product area, PayPal may have placed the hold as a precaution until they have evidence that the transaction has gone well and (to put it bluntly) they can tell that "you know what you're doing," so to speak.
- You're Spending Differently
If you regularly use your PayPal account to make payments, whether online or with a PayPal debit card, the hold may not be directly related to your selling activity so much as to your payments activity. Red flags might include spending in a different country or larger-than-usual purchases. A hold in these cases has the potential to protect you in the event of fraudulent activity.
- Your Recent History Is Spotty
If despite your best efforts you've recently had some trouble as a seller that has been brought to eBay's attention, PayPal may begin to place holds on transaction funds until it's clear that transactions have been successfully completed.
Even with this knowledge, sometimes a hold can appear unrelated to anything you can think of. Most of the time, sellers would prefer that holds not happen at all. There are a few steps that you can take to prevent them.
How to Reduce Your Risk of a Hold
eBay likes fast, documented shipping. Both eBay and buyers prefer that you ship quickly and that you log this quick shipment on My eBay along with a tracking number. And, as most sellers are well aware, eBay doesn't like to hear from customers much. It generally indicates there's a problem. So try to communicate with buyers as much as you possibly can.
Feedback Matters: Don't Ignore It
Don't adopt the "thick skin" mentality about eBay selling. eBay wants you to care that you have received negative feedback or that your detailed seller ratings are dropping, and holds are one of their most effective methods for getting you to care.
eBay and PayPal want to know that they can reach you at any time, so make sure your contact information is up to date, as well.
Sometimes There's Just a High Risk
No matter how honest you are as a seller, the fact is that in some categories and around some types of items fraud and customer dissatisfaction are serious problems. If you're selling item(s) of these kinds or in these categories, it's best just to realize that eBay and PayPal are going to protect their bottom line (since they have to shell out for buyer protection claims in many cases) and to accept it.
How to Handle a Hold
Many seller's first reaction to their first payment hold is to try to contact eBay or PayPal immediately and give them an earful. Most of the time, this simply doesn't work. eBay and PayPal are famously unwilling to budge in most cases, no matter how well you plead your case or explain the circumstances. It can happen, so it's worth a shot, but make sure you have documentation and your case is a really egregious example of a hold that's been misapplied.
Bear in mind that extended holds or very large holds that endanger a sizable business can carry you into legal action territory—but if that's really where you are, your contact shouldn't be with the eBay or PayPal customer service departments, it should be with an attorney.
So, the short answer is that in most cases, a payment hold is a necessary periodic evil involved in eBay selling. If it becomes a regular occurrence and is affecting your ability to continue to do business on eBay, it may be time to think about some eBay alternatives as an online seller.
Why your PayPal money is on hold or pending, and how to resolve the issue
- PayPal puts money on hold to help ensure the platform is safe to use for both buyers and sellers.
- Your PayPal money might be on hold if you're a new seller or your account has been inactive.
- To help release funds faster, add tracking information to your orders or print a shipping label via PayPal.
- Visit Insider's Tech Reference library for more stories.
PayPal is a convenient platform for small business owners to collect payment for their goods and services in a secure manner.
Sometimes, PayPal will put funds on hold for up to 21 days to ensure there is enough money in your account should any issues arise with the order. There are several reasons why a payment may be on hold, and ways for sellers to expedite the release of funds.
Here's everything you need to know.
Why does PayPal put payments on hold?
PayPal notes that the company puts payments on hold to help ensure that the platform is safe and secure for both buyers and sellers. Although the money belongs to you, PayPal will temporarily keep you from accessing it to make sure there's enough money in your account to resolve issues like chargebacks or disputes. Funds are released when the buyer confirms that they received the item they ordered in the condition that was advertised.
Some specific reasons why your payment might be on hold include:
- Your PayPal account has been inactive.
- The payment you received is unusual for your typical selling pattern.
- PayPal found an unusual change in selling price for a particular transaction.
- You're selling an item that customers may be dissatisfied with.
- You've only recently started selling items outside of eBay.
Why is my payment on hold?
There are a number of reasons for why funds could be placed on hold, including:
- You're new to selling. New sellers need to build up their buyer-seller credibility and history. Once you've established a successful transaction record, your status can change.
- You haven't sold anything in a long time. Similar to being a first-time seller, if you haven't sold an item in awhile, you'll need to rebuild your credibility.
- Customers filed formal complaints for a refund, dispute, or chargeback. If you've been flagged by multiple customers for various issues, PayPal may delay the availability of your funds. According to PayPal, the best way to remedy this is to work directly with buyers to ensure that issues are resolved as quickly as possible. To prevent complaints, be upfront about shipping costs, item condition, and return policy. You can also set up a customer service message to let customers know if an extreme incident — like a natural disaster in your area — is preventing you from shipping on time.
- You have a suspicious selling pattern. PayPal will flag an account that has unusual activity, including a higher than normal selling pattern or a distinct change in the type of items sold.
- You're selling riskier items. Examples of these kinds of items include tickets, gift cards, consumer electronics, computers, and travel packages — anything that is more expensive or event-related.
When can I access my payment?
As long as there aren't any issues with your transaction or account (like an undelivered package or a customer filing a dispute), PayPal will release your funds within 21 days.
How can I access my money faster?
There are some steps sellers can take to help release PayPal funds faster. These include:
- Add tracking: Use one of PayPal's approved shipping carriers, and PayPal will release the hold on funds one day after the courier confirms delivery.
- Print a USPS or UPS shipping label via PayPal: PayPal will track your package and release the hold on funds one day after the courier confirms delivery.
- Update the order status for services or intangible items: For items that aren't shipped, like e-books or knitting lessons, update the order status and PayPal will release funds in seven days.
How to prevent the delay of funds
- Check your email: Review the email sent from PayPal (with the subject line "An important message about your PayPal balance") as well as the alert located in your Account Overview page. It will include information about why your funds aren't available and what you can do to avoid this in the future.
- Post real photos: Prevent refunds, disputes, and chargebacks from buyers by posting real photos of the items you're selling, including detailed and accurate descriptions, being transparent about shipping and handling times, costs, and methods, processing orders promptly, packing items with care so that they arrive in good condition, and being clear on your return policy upfront.
- Provide customer service: Do your best to communicate with and help your customers when they reach out. If you have a buyer dispute, work to resolve it as soon as possible.
How to Clear PayPal Payment Holds
By Kate McFarlin
PayPal offers online sellers the ability to take credit card and e-check payments for their items online. While this process generally works smoothly, there may be times when PayPal places a hold on a payment that was received. There are a variety of reasons that this can occur. This hold can be placed on a payment for up to 21 days before the funds are finally released to the seller. Settling this situation requires proper documentation and helping PayPal answer a few questions.
Notify PayPal of any upcoming large sale amounts. PayPal may place a hold on an account that is suddenly receiving a large amount of sales, or if a big ticket item that is not normal to the account is sold. One way to ensure that your payments will not be held is to contact PayPal directly. Let them know of a new marketing promotion you are doing that may result in increased sales, or let them know when you list a big ticket item for sale. If you are upfront with them, this will reduce the chances of having your payment held.
Document the entire sales transaction. Be prepared to fax PayPal copies of the item's description, the buyer's receipt and the shipping receipt for the item to verify that it was sent. Typically, once the buyer receives the item the payment hold will be lifted.
Stay in contact with buyers through each step of their transactions with you. In some cases, a payment hold may be placed on a transaction if the buyer is unsure about your company or has filed a claim against you. Make sure that your customer gets his receipt automatically upon purchase and if he has any questions or concerns, address these promptly to avoid any misunderstandings.
Keep your PayPal account in good standing. Payment holds are common for newer online sellers who have been using PayPal for less than a year, or for sellers who have a lot of complaints, claims or negative feedback on the PayPal partner site EBay. Make sure your balance is always in the positive in your PayPal account and promptly settle any issues that may arise with them. Once you are a longstanding member with a good history, the chances of having a payment hold will decrease.
Avoid offering "high risk" items if at all possible. Selling items such as tickets, cell phones or non-tangible items, such as gift certificates, may flag a PayPal hold especially if you have not sold these items in the past. If you are going to sell these items, or have just a few to sell, notify PayPal. Communicating your selling plans with PayPal allows them to understand your business and clear up any potential confusion.
Kate McFarlin is a licensed insurance agent with extensive experience in covering topics related to marketing, small business, personal finance and home improvement. She began her career as a Web designer and also specializes in audio/video mixing and design.
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So PayPal put your money on hold and you’re here searching for answers.
PayPal has made secure payment easier for both buyers and sellers. Its security measures, however, can result in PayPal keeping your money on hold. Despite a sale going through successfully, you may not have access to your funds.
Fortunately, you’re not alone in this struggle. “Payment on hold on PayPal” is an issue that can happen even to sellers with a spotless delivery record and customer feedback. It can also happen to people with eBay memberships that date back years or with a clean selling record. The good news is a hold doesn’t automatically mean eBay will suspend your account or that you will never get your money back.
But it is frustrating when you can’t access your funds. Why is your money on hold on PayPal? Did you do anything wrong?
Why is My PayPal Money Still on Hold?
There are many reasons behind your PayPal money received being set to pending status. Consider one of the following:
- You’re a new seller. PayPal wants its new sellers to build their buyer-seller history and credibility. Once you’ve established a credible transaction record, your status may change.
- You haven’t sold anything in a long time. If you haven’t used your PayPal account in a while, the platform will consider you as a first-time seller again. Like the first reason, you have to rebuild your credibility, so PayPal won’t put your money on hold.
- You have a suspicious selling pattern. PayPal flags down accounts that have unusual activity, which includes a distinct change in the items they sell or a higher-than-normal selling pattern.
- You’re spending differently. If you use PayPal to make payments, whether with a PayPal debit card or online, the hold on your money may not be related to your selling activity. It could be something about your payments. Red flags include spending larger-than-usual purchases or spending in a different country. Your money is put on hold by PayPal to protect you from potentially fraudulent activities.
If you’re using PayPal to receive payment on eBay, your money may also be on hold for the following reasons:
- You have a spotty selling history. If you’ve recently had troubles as a seller (and you’ve brought these issues to eBay’s attention), PayPal will put your money on hold until it confirms that you have successfully completed your transactions.
- You’re selling a risky item. Many eBay sellers know that some categories are subject to poor seller behavior and fraud. Examples of these products are gift certificates and tickets, hot consumer phones and electronics and other items where counterfeits and fakes are common.
- You’re facing customer complaints or refund demands. If you have been flagged by many customers for a variety of issues, PayPal will put your funds on hold. According to PayPal, you can easily remedy this by directly working with buyers to resolve their issues quickly. On the other hand, you can avoid complaints by being upfront about the condition of the item, shipping costs and return policies.
How Long Will My PayPal Money Be on Hold?
So how long does PayPal put your money on hold?
Fortunately, on-hold payments aren’t indefinite on the site. PayPal will hold your money for not more than 21 days. In some cases, the holding period is shorter (e.g. 7 days). The holds can be lifted once the status of the item changes or is updated.
For example, you can get your money when you provide a tracking number, mark the item as “shipped” or when the buyer gives you feedback.
How Can I Get My Pending Money Faster on PayPal?
So how do you get your PayPal money out of hold?
Many sellers’ first reaction to PayPal putting their money on hold is to contact PayPal ASAP. Most of the time, however, this doesn’t work since PayPal doesn’t often budge to these types of complaints — even if you explain your circumstances well.
But there are some things you can do to clear PayPal payment holds.
Consider the following steps:
- Notify PayPal of upcoming large sale amounts. PayPal often holds accounts that suddenly receive a large sum of money. They will also put your money on hold if an “odd” big-ticket item is sold. To ensure your funds won’t be put on hold, get in touch with PayPal and let them know that you may encounter large sales due to new marketing promotion. Inform them if you listed a big-ticket item, too. If you are upfront with PayPal, they may not put your money on hold.
- Keep your PayPal account in good standing. Payment holds are common for new online sellers who don’t use their PayPal account or for sellers who have a bad reputation with customers and PayPal’s partner sites. Avoid holds by making sure your PayPal balance is always positive. Also, address customer issues as soon as they arise. Once you build a good reputation with PayPal, you decrease the chances of your money being put on hold.
- Document your sales transaction. For PayPal, tracking is everything. Fax PayPal copies of the description of the item, the shipping receipt and the buyer’s receipt. Once the buyer receives the item, you’ll get paid.
- Stay in touch with buyers through the entire transaction. In some cases, PayPal puts the money on hold because the buyer is uncertain about your business or has filed a complaint against you. Make sure that your customers receive their receipts automatically upon their purchase. If they have concerns, address them immediately to avoid misunderstandings or canceled orders.
- Avoid selling “high-risk” items. If possible, steer clear from selling items like mobile phones, tickets or gift certificates. These products may alarm PayPal, especially if you have never sold these items before. If you are going to sell them, inform PayPal first. Communicating with PayPal about your business moves clears up potential confusion that puts your money on hold.
How to Reduce the Risk of PayPal Putting Your Money on Hold?
Documented shipping of PayPal-paid goods and services is the key to reducing the likelihood of your funds getting put on hold. PayPal and eBay, as well as your buyers, prefer that you ship the items quickly. Also, as long as you provide a tracking number and maintain a spotless reputation with your customers, you won’t encounter problems with PayPal.
When it comes to PayPal accounts linked to eBay, feedback matters. eBay wants you to care for the feedback you’re receiving. If you’re accumulating several negative feedbacks, do something about it. Address the needs of your clients because if you don’t attend to your clients, both PayPal and eBay will think they can’t reach you either.
So, in a nutshell, to avoid PayPal putting your money on hold OR to speed up the process:
- Communicate with PayPal. Communication goes a long way with PayPal. Discuss with them your goods and services, potential sale amounts and other changes in your account. Always be upfront with the site to clear up any confusion. If you are stubborn, PayPal won’t just hold your payment; it could cancel all payments or penalize your account.
- Keep your customers happy. Transparency is a big plus! So are constant updates. Staying on top of customer concerns improves their experience, which positively impacts your access to PayPal funds.
- Always have your documents ready. The right documentation can speed up the process. Always have your documents with you in case you need to send PayPal anything to confirm your transaction.
If PayPal puts your money on hold, don’t panic. It happens. When it does, you’ll need to have your documents ready.
But in some cases, you’ll have to wait out PayPal’s on-hold policy. It will only last for 21 days, so don’t worry. If you’re not a big fan of the way, just make sure you keep your account in good standing.
On paypal hold money
Why Is My PayPal Money on Hold or Unavailable: 5 Reasons
6 Min. Read
Have you ever checked your account and wondered, “why is my PayPal money on hold?” There could be a few reasons.
Have you ever had your PayPal funds placed on hold? Even despite a recent sale going through, have you then found out that the funds are temporarily unavailable? It could have been for a variety of reasons, but it’s just a way to increase the quality and authenticity for successful transactions.
There are a few different reasons as to why your PayPal money gets held up or becomes unavailable. The good news is they don’t last forever, and the holds don’t last any longer than 21 days. There are also some things that you can do to help avoid or speed up the process should it happen.
Let’s take a look at some reasons why your PayPal money could be on hold or become unavailable.
Here’s What We’ll Cover:
Why Is Your Money Put On Hold or Unavailable?
How to Avoid or Speed Up the Hold Process
Why Is Your Money Put On Hold or Unavailable?
Just because your money gets put on hold or becomes unavailable doesn’t mean you have done anything wrong. And if there is a hold put in place, only you will know if it happens. This is good news because it won’t affect or harm your seller reputation.
There are different reasons for a hold to get put in place. But, it’s a risk management strategy to make sure there are enough funds available just in case something happens. Here are some of the more common reasons why a hold might get placed.
1. You Haven’t Been Active for a While
If you haven’t sold anything in a while and then your selling pattern becomes active again, your account could get put on hold. This is to help stop suspicious activity and make sure that the transactions are credible. It won’t last forever and it could happen randomly.
Just make sure you keep a positive selling history and you can build your credibility back up as an established seller.
2. A Recent Transaction Was Considered Unusual
If you all of a sudden start making transactions in a different country or spending with unusual activity, you could have your money put on hold. This is to help protect you against any possibility of fraud.
For example, if something doesn’t fully match up with your regular spending patterns or payments activity. The hold on the payment status will help make sure that it's actually you making the transaction.
3. There Was an Unusual Change In Your Selling Price
Sometimes people sell all sorts of different things at all sorts of price points. But PayPal will put your account on hold and flag any unusual sales activity. This can include if there’s suddenly a big change in the price of the product or the type of product that you sell.
4. Your Selling History Is Short or You’re New to Selling
It could be high risk if first-time sellers have spotty selling activity or the items are high in value, for example. There could be a hold placed only as a precaution to make sure that the transaction details run smoothly.
5. You Start Selling Higher-Risk Items
There’s nothing wrong with selling things like tickets, consumer electronics or gift cards. It’s just that those items might get considered riskier. Other things like travel packages, computers or anything that has to do with an event might also get flagged.
If this happens, funds will only be held for 21 days to make sure everything is legitimate. This will help with customer satisfaction and ensure that everyone gets what they need.
How to Avoid or Speed Up the Hold Process
If your funds are put on hold for some reason, there are a few things that you can do to help speed up the process. There are also a few other things that you can do beforehand to help avoid the possibility of a transaction being flagged.
Here are a few ways to help avoid or speed up the process.
Communicate with PayPal
Communication goes a long way. If you know of any upcoming sale amounts that are larger than usual, communicate those details with PayPal customer service. This will help avoid any payments getting held.
It can also include if you have any other distinct changes to your selling patterns. Maybe you have a new kind of marketing strategy that will generate more sales. Or you might have a new item for sale that’s much more expensive than your usual products. Whatever it is, being upfront can leave everyone satisfied.
Keep Your Customers Happy
Staying in contact with your customers throughout the sales process is important. Sometimes a customer might have a question or request a refund. Staying on top of those details can help with the overall customer experience.
And to keep customer loyalty, you also need to keep your account in good standing. Holds can be common for new sellers and other factors like complaints can also contribute. But keep your account positive and quickly deal with any issues that come up to reduce the possibility of funds getting placed on hold.
Have Documents Ready
Holds can happen for any number of reasons, even if you’re an experienced seller. But having the right documentation in place can speed up the process if it happens. Be prepared should you have to send anything to PayPal to confirm the details of a transaction.
This can include a buyer's receipt, a copy of the item's description or any shipping information to track where it gets sent. If a hold gets placed, it can get lifted by providing this documentation or if the buyer receives their product.
If PayPal puts a hold on your money, one of the best things you can do first is have any documentation ready in case it's needed. This will speed up the process and confirm the legitimacy of the transaction. Contacting PayPay if you’re aware of any upcoming sales that will be larger than usual will also help avoid a hold getting placed on the funds.
But, in some cases, there’s nothing you can do about funds getting put on hold. It could happen for any of the reasons outlined above, but you now know why it could have happened. And it will only last for a maximum of 21 days. So if you’re doing everything properly and keeping your account in good standing, the chances of a hold happening will be lower.
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