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My issues with PayPal

I was recently contacted by PayPal to take part in customer satisfaction and feedback survey.

Funnily enough, despite being a multi-million dollar profitable company, and wanting over 45 minutes of my time, they were not offering any remuneration in return. And don’t forget, customer feedback and satisfaction analysis like this is worth a massive amount to any company.

With the above in mind, I don’t normally take part in such requests (although I did once call up a consumer research company that was facilitating such survey to ask where I should send my invoice to. After some confusion at their end I informed them that as a consultant I usually charge people for my time, and their request was no different to any other. But that’s probably because I’m a stuck up bastard.)

However, I have a couple of gripes with PayPal so I thought I would do it anyway. And lets face it, PayPal are one companies that are so big and so dominant in their sector that they generally work on economies of scale to the point that they are happy to piss a percentage of their customer base off, knowing that people will still be forced to use them and that there isn’t much choice anyway (Roll on this new Google payment gateway, I say!).

So here’s what I wrote:

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(Considering I am spending over 30 minutes of my time, unremunerated, to provide a multi-million dollar company improve its service, I am taking the opportunity to gain the maximum amount of value I can from writing this note by posting it to my blog at

Decrease your seller/receiver fees as they are extremely high for what one gets in return. The protection is poor for the buyer (see below), and the facility of accepting a credit card transaction to be deposited to a bank account can be obtained elsewhere at a far more competitive rate.

Like all financial institutions who find themselves with a large amount of liquidity (both from transactions passing through + ongoing customer reserves), no doubt you invest on the money markets which must also be a good source of revenue for PayPal.

Your seller fees are so high that I will not accept PayPal as a payment method on an eBay auction. However, I would stop using PayPal altogether if you changed your revenue model to one which charged the buyer for all/part of the fees.

Increase buyer protection to any amount. I think it’s “unfortunate” that PayPal is happy to take a percentage of the total transaction in fees – regardless of the amount – but then will only honour protection up to £500.

If you are not prepared to guarantee protection above £500, then maybe you should decrease the percentage fee dramatically for the rest of the transaction amount above £500. Or not accept transactions above £500 at all.

I’m not sure whether things have changed, but you previously did not offer protection on international purchases, which meant I lost over £100 in once incident where the seller failed to deliver an item. I felt frustrated that this entire transaction took place within PayPal’s system (and thus no different to a UK->UK transaction at a technical level) yet you were not able to offer me protection because the seller was physically located in the US and I was in the UK.

Bugs with your “seamless integration” into eBay
I recently had to invoke buyer protection on an eBay item I received which was not as described in the auction and the seller failed to return my emails.

Within the My eBay system, the “Item not received” option would have enabled me to let eBay know that, whilst I had paid for the item, there was a problem with what I had received.

Invoking this option in the My eBay screen informed me that because I was “doubly protected” by both eBay and PayPal, I should use PayPal to reclaim my money (funnily enough). I did that successfully and got my money back after 7 days.

However, between you and eBay that did not update the item status in My eBay to “item not received”. Instead, it changed the item to “item not paid for”, now with a seller complaint on my account – thanks. It appears impossible to mark an item in eBay as “item not received” if you pay via PayPal – leaving the only possible statuses; as “Item paid and received OK” or “Item not paid for”. Seems like a bug somewhere there to me.

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Do let me know if you have had similar experiences, would agree/disagree, etc!

Published in Thoughts and Rants