
What happens when you pay PayPal $15k in fees? - cft
https://www.reddit.com/r/paypal/comments/6lhxme/what_happens_when_you_pay_paypal_15k_in_fees/
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ben_jones
TLDR; don't use paypal unless your business can sustain large amounts of
frozen funds, terrible customer support, and shady fees and business
practices.

~~~
jseliger
I'm baffled by the ongoing willingness to use Paypal. It's been a terrible
company since seemingly forever. 116 days I wrote a comment about how terrible
it is:
[https://news.ycombinator.com/item?id=13851855](https://news.ycombinator.com/item?id=13851855)
that in turn references my own horror story, from more than a decade ago, 28
days before that:
[https://news.ycombinator.com/item?id=13624393](https://news.ycombinator.com/item?id=13624393).

~~~
RcouF1uZ4gsC
This is because consumers love PayPal. It means I am not giving my credit card
to a potentially shady person and that I have a way to cancel the service. I
also have 1 place where I can see all my subscriptions, so I don't keep
subscribed to services I don't use but forgot about.

In general, if there are two equivalent options and one takes PayPal and the
other doesn't, I am going with the one that takes PayPal.

~~~
CodeWriter23
As a consumer, I prefer Stripe's interface. It is low friction; I enter my
details one a site when making a purchase, and if I opt-in, those details are
available on any site using Stripe. And protected behind SMS temp passwords.

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tbrock
This company is pure scum.

Without sharing the details of my personal grievances I can assure you that
you are better off sending money to others securely using any other payment
system on the planet.

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thedarkginger
Who is the payment processing leader at this point for digital payments? I
assume Stripe, no?

~~~
gnicholas
We've had issues with Stripe as well. For example, one of our customers forgot
they were paying (happily) for a subscription to our software, and they
flagged a recurring charge with their CC company. When Stripe notified us of
the flag, we quickly showed them server logs showing that the customer was
still actively using our software. We also provided the original purchase
information and screenshot of what the user saw right before making the
purchase.

Stripe said we lost the dispute because we didn't provide the customer's
driver's license. (What?!) We persisted and at this point contacted the
customer, who readily admitted that he was still using our software and was
happy to pay for it. Unfortunately, even this was not enough for Stripe, who
refused to reverse their levy on us. They claimed that someone had stolen the
CC from its true owner, signed up for our software, and was emailing us from a
fraudulent email address.

At this point, the customer (who was really nice) called their CC company
several times to say that it was all a misunderstanding and that the charge
was justified. But Stripe refused to accept this as proof. They might not be
as bad as PayPal, but they're not saints either.

~~~
phil21
To be honest, this sounds like the experience you would have with any other
merchant bank. They have zero impact on if you win the dispute or not, and
most of those charges from them are likely (marked up) pass-thru.

The deeper you go into this world the more upset you are going to get.
Basically the answer in pretty much absolutely any dispute or anything out of
the ordinary is "merchant pays". It's not worth your time to dispute it in the
manner you did, as you will likely find out over time.

Your story sounds like at least a dozen merchant banks I've worked with in the
past in various capacities, I'm honestly surprised they even spent that much
time talking to you about it. Things may be changing this day in age, but 10
years ago basically any card not present transaction that was disputed you
automatically lost, and the Visa or Mastercard network would charge you the
$35 for the trouble of you being defrauded by a customer :)

~~~
gnicholas
Yeah, it seems the only point in responding is to avoid being flagged as a
fraudster. It is unclear whether Stripe's fraud detection system treats you
differently if you (1) are flagged by a customer and do not respond; or (2)
are flagged by a customer, respond substantively, but are nonetheless denied.
If these have the same impact on your risk profile as a vendor, it is 100% not
worth it to respond.

~~~
phil21
Good point, I didn't really consider that aspect. I truly do wonder now if it
matters at all!

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URSpider94
This is not unique to PayPal, it's standard in the credit card processing
business. [https://www.merchantmaverick.com/understanding-rolling-
reser...](https://www.merchantmaverick.com/understanding-rolling-reserve-put-
business/)

However, they do seem particularly aggressive in applying a reserve in this
case.

We are missing a lot of data here, for example the business' chargeback rate.

~~~
joenot443
>It's worth noting that our chargeback rate is well under 0.1%

~~~
URSpider94
Thanks for highlighting. This does seem pretty aggressive.

This does stink, but they have options. If their revenue is as large as they
state, they can likely go to a bank and get a line of credit with their
receivables as collateral. If they were in a B2B business, they would likely
be facing Net 45 terms from their customers anyway.
[http://www.comcapfactoring.com/blog/line-of-credit-
secured-b...](http://www.comcapfactoring.com/blog/line-of-credit-secured-by-
accounts-receivable/)

~~~
phil21
I'm curious if they need Paypal due to customer preference, or if they could
simply accept credit cards directly. At that volume, implementing your own
merchant account sounds like a much better idea than paying the absurd rates
Paypal charges.

However, I'm fairly certain that they would have thought of this :) I'm
assuming they need to accept Paypal due to customer demand.

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baybal2
Back in my college years, the standard procedure was to have multiple
accounts. Paypal guys can easily close/freeze like 10 out of 20 accs after
first chargeback dispute, but to leave remaining 10 even when they were listed
on the same webpage. I thank their lazyness

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JoeAltmaier
Lots of complaints about receiving money from a stolen credit card, and
surprise surprise _Paypal takes the money back_. What, they should eat the
cost of cheaters? Why? They should use their resources to get your goods back?
Why?

Selling stuff mail-order is risky; you get cheated sometimes. Paypal is not
going to fix that for you.

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petraeus
Are we talking paypal or payflow? Because 15k in fees is virtually nothing.

