Paypal Not Accepted Here

I just got a letter from PayPal saying that from now on they are holding any payments customers make to us for a period of 21 days or until the product ships so that they can cover any returns. We have never had any return problems, we are not a high risk business nor has what we do or our patterns changed.

They told us we are to continue to ship* product as usual despite the fact that they are not going to pay us. The few payments we receive are for deposits on roaster pigs and CSA’s. Those deposits are typically made months in advance because they are reservations. Prepayment of a portion of the price is part of how it works with CSA’s and such. The farmer gets paid ahead and it takes time to grow the pig. Apparently PayPal’s CEO isn’t with the program.

This unilateral behavior by is unacceptable so we’re simply no longer accepting PayPal payments. They’re a gorilla that has gotten to big for their shorts.

Since actually don’t use PayPal much I have decided to simply stop accepting PayPal payments. Not hard since 99% of our customers pay with cash or a check. PayPal loses since they normally charge almost 5% on each payment. Frankly, I would rather not give them that 5% and I’ve told customers all along that I appreciate when they pay with a check or cash because it means the farmer gets the full payment rather than the bank (PayPal) taking it’s tithe.

I am curious if anyone else has gotten a similar letter and what is up with PayPal.

This raises a number of questions in my mind. Is PayPal going through financial hard times such that they have to hold onto people’s money for 21 days to earn interest on that money to pad their cash flow? Is PayPal perhaps failing and about to go into bankruptcy?

PayPal is tightly integrated (and owned?) by eBay so this raises the question of is perhaps in financial trouble as well? Will we be soon be seeing eBay go bankrupt too? I’ve heard warnings of a next tech bubble collapse and maybe these are early warnings that the companies are under financial stress. If you have a 401K it may be time to divest from companies like these and put your money in more local, stable investments.

In any of these scenarios I don’t want my money sitting in my account so I have cleaned it out and won’t be using it until I see this issue resolved and feel more secure about their financial stability and their ability to deal fairly with customers. Ergo, PayPal is not accepted here.

Outdoors: 82°F/48°F Sunny
Tiny Cottage: 75°F/67°F

Daily Spark: Tofu: The favored health food store product of GMO, intensive farming, Big Ag, large water consumption, energy intensive manufactured to remove toxins and highly processing. All of this bad yet the stable of the vegan diet. I like tofu but natural it ain’t.

*We don’t ship, we deliver or people pickup at the farm. This makes PayPal’s letter all the more odd. Update: We are starting to ship – see the Kickstarting the Butcher Shop post.

About Walter Jeffries

Tinker, Tailor...
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43 Responses to Paypal Not Accepted Here

  1. Frank says:

    About ten years ago Paypal was infamous for doing that. They also had a habit of retroactively deciding that products being sold (for years sometimes) were too risque for their standards and seizing funds. They appeared to have become more trustworthy since Meg Whitman moved on, but perhaps they have not changed their spots.

    This may also be part of an ongoing corporate redirection. A few years ago EBay got a new CEO who decided to emphasize businesses as sellers rather than cater to folks cleaning out their closets. Paypal (which EBay owns) deciding to dump people like you and I would seem a logical next step.

    I’d just recently started letting Paypal balances ride, after years of treating them like hot potatoes. Thanks for the warning.

  2. Anny says:

    Hay! Thanx for the heads up on this. I had problems with pp then they seemed ok for yrs but if they are doing this I am not taking chances. I am clearing my account.

  3. Lona says:

    No letter here (though we are small potatoes in their eyes). However, PP makes me nervous enough that I remove any income on a monthly basis. And the bank account attached to it is similarly lean.

    Sorry you’ve been mistreated.

  4. Noah Vaile says:

    As Frank noted. John Donahoe, the “new” eBay CEO stated that he no longer wanted “eBay to be the flea market of the internet.” Immediately there were numerous small changes that made eBay a much less friendly and profitable place for small sellers of used goods. It was announced that eBay preferred to cater to large businesses selling new items.
    Sellers were banned from leaving negative feedback about buyers. Buyers were doubly encouraged to leaave negative FB about buyers via the “DSR” or “Detailed Seller Ratings.” This provided for buyers to leave individual ratings of 1 to 5 in four different categories for each item purchased. Five “is” outstanding, four is “good.” But get an average in any one category below 4.6 (three out of five fours because you are so “good”) and you can be suspended or limited in your selling for “underperformance.” Nowhere is it indicated that a “4” is a bad score. It is touted officially as a good one. Rising fees and a dispute process that always heavily favors the buyer all combine to make eBay a far less friendly sales venue than it was just two or three years ago.
    With all that said.
    EBay recently announced that their wholly owned subsidiary, Paypal, would be required to put a 21-day hold on all sales by ‘underperforming’ sellers, of whom I happen to be one. Despite that ‘warning’ it has not, apparently, happened as yet. Goody.
    It looks as if Paypal has extended that “policy” for no known reason to businesses that don’t sell on eBay. Totally weird to me as if they do that with everyone they’ll clearly find that they won’t be doing it with anyone because no one will use their service.

    When I got my first notification I filed a complaint with my state attorney general’s office. They have contacted eBay but eBay has refused to respond, thus far. Their last letter states: “This office has written you twice regarding Mr. (redacted)’s complaint and requested a response as to your position within ten days. To date we have received no response. I assumed you would prefer an informal inquiry to a more involved investigation of your company.”

    I would suggest that you do the same. It strikes me that this corporate behavior is truly insane and the equivalent of what our federal guvmint is doing and wants more of.

    • Good advice. I have now contacted the Vermont Attorney General and filed a complaint against PayPal for their unfair business practices and theft of my money. By their keeping my money on hold for 21 days they are earning interest on it which they’re stealing from me and they’re taking my use of my money from my business, our farm. They should not be allowed to fund their cash flow with our money like this.

  5. Noah Vaile says:

    Oh, one more thing. YOU may have gotten that email/letter by mistake. Paypal may have made a mistake but that doesn’t make me feel any better about them. I have never had a problem with PP myself and am waiting for this problem to actually happen to me. They have threatened but not acted. Maybe because I filed the complaint, I dunno.

  6. Noah Vaile says:

    You got that right Walter. I was so t’d off when I first learned about this plan, before I was told that I would (might?) be subjected to it. Initially, if it didn’t apply to me, I had no standing. Then, I did. But I’m not sure where my filing stands if PP doesn’t hold my funds, which they’re not.
    I need to leave a little more than I’d like just in case though. Which also t’s me off.
    Good luck to ya in your complaint.

  7. fan says:

    Report from the other end: After using PayPal for years to pay for eBay purchases, to send money (including a gift toward your pink palace!), etc. I reached a threshold after which PayPal would no longer do business with me unless I divulged details about my bank account. Until then payments had been funded by a credit card, which was still valid. PayPal assured me this was all for “verification purposes”. Well, they have a verified former user.

    • Noah Vaile says:

      I am verified and it’s no big deal but isn’t it amazing how an ongoing business concern can be so very willing, even (seemingly) anxious to shoot itself in the foot on a regular and ongoing basis. It’s as if they don’t even care to stay in business.

  8. Kristin says:

    Nothing here from Paypal. We sell on eBay and our own site.

  9. James says:

    Check this out. TONS of horror stories.

    • Noah Vaile says:

      This (paypalsucks) looks like a site created to conjure up business for their “Paypal alternative” which is a monthly-fee “money exchange” business, just like PP. The links are plastered all over the place. It does not look terribly legitimate to me. I am not saying that the stories presented are bogus (even if they do sound a little ’emotional’ and over the top) or that the site itself is just another business-hack. It just doesn’t feel right to me.

  10. Rick Scully says:

    I have always refused to use PayPal for a number of reasons, so when it came time to add an online store section to our site we chose Google Checkout. They never hold our money. Once we complete a transaction by billing a client; only after we ship a product, the money is automatically (and quickly) transferred to our business’ checking account.

    We also like using Square Up for credit card transactions in the field. It works with our iPhones and iPads and has similar transaction fees to other online merchant services. Very useful at fiber events.

    Just my $.02 … how do I send it to you? ;)

  11. David G says:

    I noticed recently, the last month or so, that paypal is holding payments I make to sellers 3-5 days “till the check clears”. In the past they sent the payments to the sellers immediately and the charge showed up on my bank account the next day. I don’t know if it is just me or if this is happening to others too.

    • Noah Vaile says:

      “eChecks” are money especially deposited with PP and are not simply money paid out of a ‘buyer’s’ account. They take 3-5 days for PP to clear the money and be assured that they have it. They say. I think it could be done more quickly and they have speeded up the process in the past few months.
      Is that what you are referring to?
      I expect that they will hold (other people’s) money just as long as the law allows.

  12. Katharine says:

    We received the same letter you did Walt, actually we got an email from them, which I routinely ignored, because we have for years, received bogus letters and announcements that looked like they were legit, but were not. I thought at first, this was just another along the same lines. But, if this is in fact a legitimate notice of what they intend to do with my account, after almost five years of complaint free use by my farm, then I too will be dropping them from our site. Pronto.

    I also examined the “Square Up” site and ALMOST gave them our business until I found a few things in THEIR user agreement that I didn’t like either. We may just stay with cash or check also on our farm or at least until a viable alternative is found. It is absolutely ridiculous the arbitrary, self defeating list of obligatory rules in which these processing companies have established and imposed, in order for US to allow THEM to take OUR money. What they fail to realize, is that they are merely FACILITATORS, having no hard, bona fide, tangible products. It IS possible to conduct business WITHOUT these ‘gestapo type’ merchants who revel in flexing their authoritative muscles while making THEIR living off of the backs of others and then being asses about it to! Talk about biting the hand that feeds you, eh? Time to CULL and CULL HARD!

    From ‘Square Up’ Agreement at -

    4. Verification and Inspection.

    If your request to open a Square Account is approved, Square may request additional information from you at any time. Square may ask you to present invoices from your suppliers, a government issued identification such as a passport or driver’s license, or a business license. Square may also ask for permission to inspect your business location. If you refuse any of these requests, your Square Account may be terminated. We reserve the right to suspend or terminate the Square Account of any user who provides inaccurate, untrue, or incomplete information, or fails to comply with the account registration requirements

    16.1. Card-Not-Present Sales.

    If you accrue more than $1,000 in card-not-present sales during any trailing seven day period, Square will defer depositing the amount in excess of $1,000 for 30 days.

    I believe there were many other areas that I also found to be flaky from my standpoint and just add icing to the cake of “Not on MY farm!”


  13. Apparently Paypal read my blog. I got a letter from them just now that they are removing the hold on my funds:

    Hello Walter Jeffries,
    We’re writing to let you know that starting today, funds from payments you receive will no longer be placed in a pending balance due to payment holds. …

    That is so funny. I’m not sure what to think about them.

    • Noah Vaile says:

      Have you already contacted your State Attorney General? Have they already contacted Paypal? My funds are also supposed to be held, but are not. I suspect because my attorney gen’l is investigating the threat. But how much standing do I have if they never follow through?

  14. David Lloyd Sutton says:

    Walter, consider how many people visit your blog regularly, and how a lot of them are do-it types. Paypal has to realize how viral (and costly) your disgruntlement could be. Thanks for the contribution to the free market. Negative feedback forever!

  15. mellifera says:

    There are a number of electronic card-payment methods in addition to SquareUp. If I remember right SquareUp is among the methods with the lowest transaction costs, but there are other options out there.

  16. [MOVIE GUY VOICE] In a world where corporations can $hit on the little guy…Pay pal thought they could get away with such Shenanigans….until one day….they messed with the wrong farmer. Meet…..Walter Jefferies….or as his friends call him:” Walter-won’t put-up-with-corporate-bull$hit- Jefferies.”

    Well done my friend. I like the letter they sent you:
    Dear Walter,

    We f’ed up. Please forgive us and be quiet.


    Pay Pal.

  17. We are seriously considering using SquareUp. I know you said you didn’t have an iPhone… but you can get your hands on a used, great condition iPad from eBay or CraigsList for under $250… Then with SquareUp and the free reader you are :
    2.75% per swipe for all credit cards
    3.5% + 15¢ per transaction if you key in the numbers (higher liability to the processor)

    • The issue is we do not have cellular service and our customers are not physically present when they need to make payment for a deposit so the card is not available to to swipe. Do let me know how it goes for you.

      • Walter – we have been using Square for a bit now and are as happy as we can be with a middleman. Obviously the best method is the swipe on the phone/iPad with the little reader they give you… BUT…
        You can also use the knuckle buster method, get the imprint and then enter the payment by typing in the numbers (3.5% + 15¢ per transaction). Did test it and you absolutely must have a connection of some sort (WiFi or Cell) to have the transaction go through… AND you must enter the values (or swipe) from a device – no web page entry.
        That said – we really like it – it’s smooth, good reporting and moves funds quickly. Have used both the swipe and manual entry… 4 out of 5 stars (just because 5 starts for taking my money is hard to justify)

        • It’s good to hear some good stories about Square. Their reader looks like a cool way to do it especially if one were doing a farmers market or such.

          • We use it for taking CSA deposits and balance payments, payments on large order of chickens, turkeys, pork, etc. We also have gotten good at letting customers know that it costs us to do that – and for the convince of their frequent flyer, reward point, whatever’s they are getting by using plastic… well… we are more than happy to pass that little extra along to them so they can “get more points”… :)

          • One of the things that happened many years ago is the credit cards instituted all these rewards programs. They financed it by charging the merchants for the rewards programs. I remember when it went into place. We had a credit card terminal at the time and the monthly feeds as well as the per swipe and percent take all got jacked up greatly. We stopped taking cards at that point. This was back when we were doing BlackLightning and Flash Magazine. The problem I had with it was the credit card companies were using it as a marketing tool to get customers to use their cards and the shoved the costs down our throats. The rewards programs didn’t benefit the merchants. Classic 800 lb gorilla move.

  18. Calendula Farm says:

    Paypal is a beast that needs taming. I stopped using pp last year when the began placing the 21 day hold on funds. Like you Walter, I had no history of returns. After many phone calls to pp, many of them overseas as they send most of their customer service jobs to the Phillipines, I have concluded that they practice the 21 day hold not to ensure a return but to hold trading capital. I also discontinued use of ebay as they are a sister company and their rates moved into the “highway robbery” realm.

  19. I just received another letter from a “PayPal Executive” which makes it sound like they’re going to start holding funds again despite their recent letter saying they were stopping holding funds. Nothing has changed on my end – PayPal is just being arbitrary. I will continue to advise people not to use PayPal for sending payments. PayPal is not accepted here.

  20. JJM says:

    This Paypal problem has become a big one for many. I refunded all money to buyers once Paypal started doing this. Then I closed the account for good. The biggest reason why companies like this one stay open is because of TOLERANCE. Too many desperate people out there that put up with it. If every single person that got hit by this problem rejected it, the problem would disappear. FIGHT BACK.

    • I had more problems with PayPal this fall and told them why it says what it says on my blog. They’re manager read back in my case history and saw all the errors they had made and he apologized but they still couldn’t seem to understand that they need to start getting it right. I would strongly suggest people avoid PayPal. To paraphrase their web site: “Paypal. The world’s most loved way to get [l]aid” (sic). (Sorry, my dyslexia caught that. How apropos.)

  21. Noah Vaile says:

    I am also having a hold put on my payments by paypal. This, at least so far, is as the result of eBay labeling me as an “underperforming” seller based on their arcane and obfuscated software programming. In any event if I weren’t actually being bribed by eBay with their 50 free insertions and having them deduct the money for shipping I’d be out of there myself. As it is I’ll accept their greedy and unfathomable reasoning as I no longer rely on ebay sales as a reliable source of income and know that they are, like a spider, just lying in wait to find some pretense to ban me forever unless I open an outlet from China….

  22. dorn hetzel says:

    I have been using paypal for making various payments for a long time, but after reading this I will use any available alternative whenever I can.

  23. Sam says:

    Ive got a love hate relationship with them too.

  24. Kline says:

    I too have had trouble with paypal.

  25. Noah Vaile says:

    eBay also accepts Paymate and Propay among other (Skrill)!!??) payment accepters. Lots of folks out there willing to take our money, for a fee….

  26. Don Scheiber says:

    Not a user of PayPal since I became aware of founder Peter Thiel’s particular political proclivities – here’s a couple of examples: (But a big fan of your site, Mr. Jefferies – makes me think of Wendell Berry. My daughter bought me a ticket to see him receive a big award in Tulsa recently, got to meet him briefly, got some books autographed.)

    Southern Poverty Law Center Newsletter
    Intelligence Report, Summer 2012, Issue Number: 146
    PayPal Founder Peter Thiel Continues to Tout Anti-Government Manifesto
    By Leah Nelson
    Peter Thiel, the founder of PayPal, is sick of paying taxes, and he’s not going to stand for it any more. Rather than unilaterally secede from the government and face the indignity of being hauled to court as a tax-defying “sovereign citizen,” however, the super-rich hedge fund manager plans to start his own country.

    The Center for Public Integrity
    PayPal co-founder gives $1.7 million to pro-Ron Paul super PAC in January
    Thiel’s total contributions to ‘Endorse Liberty’ reach $2.6 million
    By John Dunbar email
    11:06 am, February 20, 2012 Updated: 12:12 pm, July 17, 2012
    Texas congressman Ron Paul may be running in fourth place in the most recent national polls for the Republican presidential nomination, but he’s first in the heart of PayPal founder and hedge fund manager Peter Thiel.

    With a $1.7 million donation in January added to the $900,000 he’s already given, Thiel is responsible for 76 percent of Endorse Liberty’s $3.4 million in total receipts, according to Federal Election Commission disclosure records released Monday.

    • Gee… I was thinking of declaring our valley and mountains a sovereign nation and announcing that we have nuclear weapons so that I could let the US Government conquer us and give us $2,000,000,000 a year in aid like North Korea. I think I’ll get more that way than by trying to avoid the taxes… :)

  27. Don Schreiber says:

    Hmm- Weapons? I thought you just had a nuclear reactor. You’ve made a lot more progress than I thought. I’m proud to say I haven’t followed Peter’s ideas closely, but I kind of think you have to move your butcher shop/reactor offshore to be able to cash in.

    In any case, I bet Peter has no trouble spelling his own name, I wish could say the same for myself. For 64 years it has had an ‘r’ in it, I decided to drop one on my Reply. We know not why.

    Don Schreiber
    Devil’s Spring Ranch
    Gobernador, NM
    (which is a long, long way from any ocean)

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