Friday, August 07, 2009

Why I hate PayPal

Many radio amateurs have a PayPal account. It's a convenient way to send and receive payments for equipment advertised on the web, and it's often the only way to pay for kits and components from QRP clubs and so on. When it works, it's great. But consider what can happen when something goes wrong.

Supposing that the person to whom you wish to send a payment makes a mistake when typing their email address. Or suppose that you mis-type it into PayPal yourself. You might think that PayPal would reject the transaction, with a message such as "This email address is not registered with us." But no. PayPal sends a message to that address saying "Someone has sent you cash. Please open an account with us to claim it." Meanwhile you and the person you are buying from both sit waiting for something to happen until one of you sends an email to the other to ask why nothing has.

If the address you sent the money to doesn't exist, PayPal doesn't detect this. And it allows 30 or 60 days for the recipient to open an account and claim the money. When you realize the error, you can cancel the transaction. But PayPal only allows you to cancel if the recipient doesn't claim the cash. So it "freezes" your money until the 30 or 60 days are up. That means that you have got to find the money from somewhere else to pay the seller, and then wait until PayPal gives you the original payment back.

If the address you mis-typed happens to be a real email address, then the recipient may think that it's their lucky day. You will then have to fight with them to get your money back. PayPal is an accident waiting to happen.

If you are the "lucky" recipient of mis-sent cash then you can still lose out. Someone once sent me $108 by mistake. It turned out to be someone I had once exchanged emails with, so I guess my address was in their auto-complete list next to the intended recipient and they picked it by mistake. I didn't turn on the computer for a couple of days so I didn't realize this had happened until after the sender panicked. They tried to stop the payment before I had the opportunity to simply refund it and as a result I was charged $15 by PayPal for processing a charge-back. My attempt to dispute this resulted in no more than a series of automated responses. PayPal "support" stinks.

I currently have an amount of money "frozen" in my account because it was sent by mistake to a non-existent address. I hate PayPal.
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