PayPal's 21-Day Hold Policy for eBay Sellers

[mandy]

eBay's online payment service PayPal may impose 21-day holds on transactions in certain circumstances.

eBay's FAQ about the 21-day hold states: In a small percentage of cases where it has been determined the risk of dissatisfied buyers is higher, PayPal may delay release of the payment funds to the seller until the buyer has left a positive feedback or 21 days have passed without a dispute, claim, chargeback or reversal filed on that transaction...

full article: http://www.auctionbytes.com/cab/abn/y08/m02/i08/s03

[mandy]

In the uproar that erupted over the planned fee hikes and other policy changes eBay announced last week, one drew particular ire and incredulity: eBay's plan to hold payments sent through its PayPal payment service for up to 21 days in certain circumstances...

PayPal estimates that its new hold policy will affect less than 5% of eBay transactions, and it emphasizes that only relatively untested sellers risk incurring a freeze. Merchants who have been registered with eBay for more than six months, have a feedback score of 100 or higher (meaning they've received positive comments for at least that many transactions), and have a "dissatisfied buyer" rate of less than 5% will never have their funds held.

But on a site that hosts an estimated 113 million listings worldwide at any given time, a policy affecting as many as 5% of those transactions puts millions in jeopardy...

full article: http://money.cnn.com/2008/02/08/smbusine...2008020917

[sneakymagenta]

Ass kicking time if they hold my money! 

[Kristijntje]

A related article:

Next month, eBay intends to implement a controversial new policy that will entail holding payments sent through PayPal for up to 21 days for certain "high-risk transactions."

Furious at the prospect of waiting to receive funds, sellers have been publicly speculating about how much money PayPal (and its parent company, eBay) makes off the accruing interest on funds under PayPal's control - and whether a desire to retain those funds for longer spurred eBay's holding plan...

Any funds PayPal holds for dispersal are automatically deposited in a corporate bank account, which earns interest...

full article: http://money.cnn.com/2008/02/26/smbusine...2008022611

[FiberGuy]

Not backing PayPal up on this, mind you... but don't some merchant accounts do this also?  Isn't it called a reserve?

[sneakymagenta]

Merchant reserve accounts explained

[FiberGuy]

Tanx, Sneaky!