Paypal Payment Held / Temporary Hold, Funds Reversed/Reversal, Paypal Dispute/Claim
*Paypal now conducts random checks on transactions by placing payments on temporary hold and carry out an investigation, the process is as explained below. The case will be listed as 'inquiry by paypal'. Due to the fact that these transactions are usually authorised the funds should be returned to the seller or made 'available' again.
*Changes to Confirmed & Unconfirmed Address
Changes to Seller Protection on eBay mean sellers can post to confirmed and unconfirmed addresses and still be protected against claims, chargebacks, reversals for unauthorised payments and items sold on eBay that the buyer did not receive.
Sellers who accept payments for items sold off eBay are still required to post to confirmed addresses in order to be eligible for Seller Protection.
****** Paypal Disputes now effect a sellers performance like feedback and detailed seller ratings (DSR), disputes opened will now show in a sellers 'Seller Dashboard'
This guide is designed to provide information to anyone who has had a paypal payment put on 'temporary hold'.
What happens: Someone purchases one of your items and pays with paypal. You post the item. Then you receive an email from paypal telling you that payment has been 'held'. This can be anytime from one to thirty or more days.
This basically means the buyers credit cards has rejected the payment or it's a stolen card or the buyer has opened the dispute because they have not received the item or have opened a 'significantly not as described' dispute.
The disputed funds will be 'held' by paypal, this means you cannot use or withdraw the funds until the dispute/claim is closed/resolved.
Action to take: It is highly likely they will email you and ask you to provide information about the item purchased. There may also be the opportunity to add tracking details, submit these if you have them. Reply to the email from paypal with the requested information.
Contact the buyer, be polite and don't threaten them, sometimes it's a genuine mistake/error. Usually the item is just delayed or needs to be collected from the sorting office but the buyer becomes anxious and opens a dispute. Try phoning them, a two minute friendly call should help get any problems resloved quickly.
Check your email, paypal may ask for additional information
Then what happens: I won't go into all the details as the course of events with each case will differ slightly. Firstly it will be a 'dispute', this means the buyer and seller can communicate through paypal, try and resolve the problem at this point because if the buyer escalates it to a 'claim' it means that someone from paypal will get involved and decide the outcome. If you don't have proof of receipt (tracking number) it's highly likely paypal will act in the buyers favour and return the funds to the buyer.
So try to resolve the problem with buyer ASAP
********* Paypal Disputes now effect a sellers performance like feedback and detailed seller ratings (DSR), disputes opened will now show in a sellers 'Seller Dashboard'**********
Then what happens....... The buyer will either close the dispute if they are satisfied or escalate it to a claim. The seller has the option to refund the payment however I have never found this to be the suitable option usually because the item is just delayed or needs collecting.
If the dispute becomes a claim and you can't prove it was delivered the funds will probably be taken from your account and returned to the buyer or the card used. With chargebacks (fraud/unauthorised use) in addition to the funds for the item a chargback fee of £7 will charged to the seller, if you don't have any funds in your paypal account you will then have a negative balance and be indebted to paypal. This will be like any other debt and if unpaid could result in debt recovery proceedings, however I have never heard of anyone being chased by paypal for money owed.
How to avoid held payments : Basically a little common sense goes a long way, if a transaction seems suspicious then double check it. Most online fraud involves using a stolen credit card or hacked paypal account or the buyer will request the item be sent to a different address. The fraudster will want the item sent as quickly as possible and in their hands before the bank or account holder realises it's fraud. So they may even contact the seller and ask for it to be sent today or offer to pay extra for next day delivery, this will usually only apply to high value items, mobile phones, ipod, laptops are the type of goods which fraudster like, due to their popularity the items can be quickly and easily sold.
Another very simple fraud is simply changing the delivery address on ebay so always check the postal address on paypal is the same, if the buyer requests the item be sent somewhere else just tell them you can't, if they get shirty it's probably a good indication that it's fraud. Always send the item to the buyers confirmed address given on paypal & check the payment to see if you are eligible for seller protection, it will be in green for covered or orange for not covered. Now I'm not knocking new ebayers but most fraud attempts are done with new account (zero or low feedback) they have set up specifically for fraud.
Always pay extra attention to new ebay buyers for the reasons mentioned above and check their address, it's surprising how many people forget to put their house number! If you send the item it will get lost in the postal system and the buyer will make a paypal claim and you will be out of pocket!
See if you are eligible to claim through the Seller protection programme (See Paypal).
If you are eligible: Follow instructions from paypal and do it ASAP, there are time limits on claims
If you are not eligible: The payment will finally be reversed (back to the buyer) You can try contacting paypal 08707 307 191.
If you have any questions just contact me and I will add more info as required.