PayPal

[Mike C.]

Hi guys... I'm certain, in fact I'm positive some of you have experience with PayPal as a seller. I'm looking to use it for purposes other than eBay. I've set up a website where I will be taking orders for a product. I'm kind of in the dark here on the advantages and pitfalls. Are there any loopholes so that the buyer can pull a scam or not pay? I want to set up a formal merchant account, however in the short run, PayPal seems like the best choice. Are there any other alternatives or easier ways to do CC processing? I'm worried about loosing business due to no CC processing. Thanks in advance.

Edit: No, I'm not selling clothes or anything clothes related. I'll tell you all what it is when I launch.

 

[drizzt3117]

Yes, you can do it, it is ok, but if someone uses a credit card and charges it back or uses a stolen credit card, you can get a bit messed up, you can try going to card service and setting up a credit card processing account, it's not really that hard, unless you are selling Appreciation...

 

[j]

I don't know if they have Costco where you are, but an Executive Membership there will run you $150 a year and from what I'm told will get you a good deal on credit card processing, plus 2% cash back, the ability to 'borrow' from the 'Costco library of stuff', etc. There are also many other cart services online, though I have no experience with any of them. As for Paypal: http://www.paypalsucks.com watch out. I haven't had any of this happen to me yet, but it worries me. I would suggest setting up a separate bank account to link the Paypal account to, and transferring the money out periodically, (Paypal->new bank acct->your regular acct) so that if Paypal locks down your whole account for whatever reason or no reason, you are not stuck without ALL your money, as has apparently happened to some people. Good luck, I'm interested in hearing what your venture is.

 

[Mike C.]

Ok, It's NOT Appreciation either... Sorry to disapoint Drizz..lol.

Thanks for the replies... keep 'em coming please.

 

[A Harris]

Well, speaking from 5 years of personal experience, you don't have much to worry about. The policy protecting you from chargebacks, stolen cards etc. isn't as good as it used to be, but from what I understand, if you take cards directly, you have NO protection. There certainly are those who hate paypal with a passion, but I can only speak from personal experience, and it has been good.

 

[drizzt3117]

However, if you accept credit cards directly, you have much more ability to verify orders, as you see the actual credit card number, billing address, shipping address, etc... Most chargebacks for credit card orders are due to poor customer service, not fraud... fradulent orders can be filtered out almost all the time, and if you do CVV verification you will have no issues whatsoever with fraud (although you may turn off some customers who don't like to take our their credit card to do orders and memorize the number instead)

My company accepts about > $50M annually in credit card orders and > $2M annually in Paypal so your mileage may vary a bit though as you probably won't have as preferential treatment and rates from the cc processors.

 

[LA Guy]

I always clear out my Paypal account as soon as I get the transaction clears, and I pay through Paypal only through a CC.

THe first is because Paypal can freeze your account at any time, with essentially no recourse. The second is that when there is a problem, and there was one last year, the CC company takes a lot better care of you than does Paypal, which has very limited, and sometimes rather useless, protection. For example, I commissioned a MTM suit last year, and the vendor took the money and ran, giving me the run around for about 3 months (jacket being cut, backlog, etc...) before I got fed up and just went to the CC company to get my money back. Paypal emailed me a little later, saying I should have gone to them first, but they state explicitly that you have 30 days to file a complaint, and I am sure that they would have frozen my account and refused to do anything about the problem, to add insult to injury. And as a seller, the charges per transaction, CC or otherwise, are outrageous - 4% is higher than any CC, and the 4% on non CC transactions is a transparent money grab. Given that Ebay now ons Paypal, if you include listing fees, final price fees, and Paypal charges on top of that, you could easily be giving Ebay 10% of your gross.

Having said all of that, I use Paypal because of the convenience and lack of alternatives. Damn those virtual monopolies.

 

[Mike C.]

Wow, thanks guys for the great replies. In the past 24 hours I found a friend of a friend that's going to help me set up the CC processing.