Many eBay sellers find that PayPal puts a “hold” on an item payment from a buyer at some point. You suddenly find out that you can not get your money, even though a sale went through. Why do PayPal and eBay do this?
The New York Times article says that eBay changed its hold policy in January 2012 to “improve the auction experience.” It is not a perfect system, and there are some ways your money might not be held. Before you get too upset, you should know a few basic things about PayPal payment holds.
How Paypal Payment Holds Work:
Even sellers with perfect feedback and delivery records and who have been using eBay for years or even more than a decade can have their payments held. A hold does not mean that eBay is about to ban you or that you are on a “blacklist” of some kind.
And they do not last forever. Payment holds can not be longer than 21 days, and they may be shorter than that in some cases. Holds can be lifted as the status of the item changes, such as when it is marked as shipped and a tracking number is given when the tracking number says the item has been delivered or when the buyer leaves you feedback.
It will not affect your seller’s reputation. Payment is held has nothing to do with your buyer. The only people who know about the hold are you and PayPal.
So why has it happened if it is not about you and it is only temporary? What are they doing?
Reasons Why PayPal Put Holds:
In general, you can not know all the reasons for a hold, and it is likely that humans were not the only ones who made the decision. When a hold is put on your funds, eBay and PayPal are basically doing some risk management on their end. They want to make sure that funds are available in case a refund needs to be given, and they want to give the transaction time to play out before the funds are released to you. Here are some reasons why a hold could be put on hold:
It is a Risky Item.
Most sellers know that fraudulent behavior is more common in some categories on eBay. Common examples are hot consumer electronics and phones, tickets and gift certificates, and areas where fakes and counterfeits are common, like electronics and phones that are new and popular. Holds are put on a lot more items or categories that have given eBay trouble than on items or categories that do not give eBay much trouble.
You are not yourself.
eBay keeps track of how much you sell, what kinds of things you usually sell, and your past transactions. If you are a seller and you start selling in a way that is different from what you have done before, like selling in a new and risky category, PayPal may put a hold on your account for a while to make sure you are really you. Online stores always have to deal with identity theft, and PayPal is no different.
You just started using eBay.
If you have only sold a few things so far, for example, and the item you are selling is expensive or in a risky product category, PayPal may have put a hold on the payment as a safety measure until they can see that the transaction went well and (to put it bluntly) that “you know what you are doing.”
You are spending money on different purchases.
If you often use your PayPal account to pay for things, either online or with a PayPal debit card, the hold may not be directly related to what you are selling as much as what you are paying for. Red flags could be things like spending money in a different country or making bigger purchases than usual. Putting a hold on your money could protect you from fraud in these situations.
Your recent history is not consistent.
If you have recently had some problems that eBay knows about despite your best efforts as a seller, PayPal may start to hold transaction funds until it is clear that transactions have been completed successfully.
Even if you know all of this, a hold can sometimes seem to have nothing to do with anything you can think of. Most of the time, sellers would prefer that holds do not happen at all. There are a few things you can do to stop them.
How to lower your chances of being held
eBay likes shipping that is quick and has proof. Both eBay and your buyers will like it if you ship quickly and add a tracking number to your My eBay page. Most sellers know that eBay often does not like to hear from customers. It usually means there is something wrong. So talk to buyers as much as possible.
Feedback is important, so do not ignore it.
Do not have a “thick skin” attitude about selling on eBay. eBay wants you to care that you got negative feedback or that your detailed seller ratings are going down, and holds are one of the best ways to get you to care.
eBay and PayPal want to know that they can reach you at any time, so make sure that your contact information is always up to date.
Sometimes there is just high risk.
No matter how honest you are as a seller, there are some categories and types of items where fraud and unhappy customers are big problems. If you sell items of these types or in these categories, it is best just to accept that eBay and PayPal are trying to protect their bottom line since they often have to pay for buyer protection claims.
How to Take Care of a Hold
When their first payment is held, many sellers try to contact eBay or PayPal right away and give them a hard time. This does not work most of the time. eBay and PayPal are known for not changing their minds, no matter how well you argue your case or explain the situation. It can happen, so it is worth a try, but make sure you have proof that your case is a clear example of a hold put on the wrong person.
Keep in mind that extended holds or very large holds that put a big business at risk can lead to legal action, but if that is the case, you should not contact eBay or PayPal customer service; you should contact an attorney.
So, the short answer is that most of the time, a payment hold is an annoying but necessary part of selling on eBay. If it happens often and makes it hard for you to continue doing business on eBay, you may want to look for alternatives to eBay.
If you are interested in reading more articles like this, here’s an article on what is a corporate resolution.