Emails have been sent and there’s a new notice on PayPal accounts… it’s in a pretty pink box atop the activity area of the account. PayPal’s new policy is to hold funds for up to 21 days in a “Pending Balance” then once cleared and they are satisfied there are no returns of merchandise or claims against the funds they will release the funds. ARGH!
PayPal has been linked with eBay for years and many of their policies are in step with how an eBay auction occurs; there are safeguards for the seller and the buyer to prevent fraud. PayPal has experienced growth because they have worked to grow beyond their auction niche. PayPal is used as the cost effective online payment solution for non-profit donations and service providers.
Looks like PayPal has built in lots of wiggle room for inforcing the policy. The new policy is unclear who will experience the pending funds, however it explains it may be because the user hasn’t used PayPal enough to develop a history, you sell more than your normal selling pattern, or your withdrawal history changes. Also, PayPal has determined high risk categories that include tickets, gift certificates, electronics.
It’s a bit unclear what a service provider can do to keep your payments from going into a 21-day hold? Hard to say because although PayPal states the pending will apply to all, their suggestions of how to avoid the hold is directed mostly toward auction sellers. It looks like good business practices should please PayPal for both service and products sellers: communicate clearly and act promptly. PayPal’s last recommendation is perhaps their best recommendation: “Verify your account and keep your financial information (like bank account and credit card numbers and expiration) up to date.”
I checked my PayPal account to see if I am subject to the new pending funds. I’ve been a good “citizen” — following all the rules on PayPal. I don’t see anything. Like me, you’ll find out your status with your next transaction.
