Watch the video, or read the Blog Post below.
Ack! My PayPal account is limited! How, then, will I be able to pay for my suppliers, ads and all other elements of my business?
Why Does PayPal Hold Money?
If your business has been raking up some pretty good sales for a period of 30 days or so, PayPal will take notice and regard you as a high-risk account, and will then put your revenue on hold. Why does this happen? According to an official article by PayPal, a percentage of your money might be unavailable for withdrawal due to the following reasons:
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- The payment you received may be considered unusual for your selling pattern
- Your account was inactive for a while
- We found an unusual change in selling price of this transaction
- You’re selling an item that can potentially cause dissatisfaction with customers
- We noticed you only recently started selling outside of eBay, so your history with us as an off-eBay seller is quite short.
In my case, the only possible reason that I saw was the 4th one: apparently, my products might cause dissatisfaction, which still made no sense since I was able to scale up successfully and sell a lot of products on my website? Does that not mean that my customers are already loyal and putting their trust in me and my services?
Think of this logic: what if a business is really doing well and decides to withdraw ALL of its money from the platform, but then a customer or two decides to get a refund? Who will be held accountable for this is the business owner itself does not have enough funds to fulfill the request?
In a way, PayPal holds your account for security reasons, and thus they hold your account until they perform “investigations”. So at the end of the day, you can't blame PayPal for taking extra steps to ensure the betterment of their clients and their customers. According to the same article by PayPal,
Delaying funds availability is a common industry practice we implement to help ensure the safe and secure use of PayPal by both buyers and sellers. By placing your money in your pending balance, we can ensure there is enough money in your PayPal account to resolve any issues that may arise with your account such as chargebacks or disputes. The money still belongs to you. It’s just temporarily not available to use, until your buyer has received the item they ordered in the condition promised.
If your account has been put on hold, you should expect an email that looks like this:
If yo do not have any issues with your transactions, you can file a dispute and wait for 21 days until you can finally withdraw your funds. But if you want to get them sooner, there are some things that you can do.
PayPal will ask for proof of delivery of your previous transactions to ensure that your customers are satisfied with your services and are actually getting what they paid for. Of course, if you are operating with full honesty and integrity, you would not need to worry about this. Simply send all the required information and PayPal will do the rest. The only problem left is that you would have to wait for a set period of time before you can withdraw funds from your account.
What Happens After The Block
So all your transactions have been marked as delivered, and you’ve waited for so long to get the funds that you oh so need. Well, if you think everything will end well now that you’ve complied with PayPal’s requirements, think again. As you’ve already been marked as a high-risk account, PayPal will STILL hold 30% of all your revenues (which is called a rolling reserve) for 180 days as assurance for all your future transactions and possible refund requests. BOO!
Why Am I Still Using PayPal, Then?
After everything my account’s been through — I can’t withdraw funds that I would have put to better use, many people still ask me why I still use the platform. As my business is not US-based, most of my transactions will not be paid using US dollars, and PayPal actually offers a poor Forex rate. I always charge my customers in USD, which still needs to be converted to AUD. However, I am running my business on an international scale, and by selling worldwide via PayPal, MY conversion rate would be higher — and a higher conversion rate equates to more sales.
Furthermore, a lot of customers are more likely to choose PayPal than having to pay directly using their credit cards for personal security purposes. And lastly, business-wise, you would want to offer multiple flexible payment options so potential buyers can be comfortable with making a purchase from your website.
Let’s Wrap It Up!
If your PayPal account is limited, it’s not the end of the world for you. However, you should expect some drawbacks and from then on always have some backup plan if you do not want to be shortchanged. If PayPal is your only payment option, you might want to consider other platforms to not only keep your customers contented, but to also prevent a total limitation of your cash inflow.
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If you have any more questions regarding PayPal or anything about this video, feel free to personally contact me via email at firstname.lastname@example.org. You can also leave your comments and feedback below, and our team over at WagePirate will definitely get back to you with a response. For more reviews, news and updates, don't forget to subscribe to our YouTube channel!