About a year ago, we had a bit of trouble with PayPal: not only had they frozen my son’s account with birthday money in it, they actually went back and reversed payments to some vendors which they had approved several days earlier! We had received the goods, the payment disappeared from the vendors’ account and the vendors were seriously unimpressed.
With us!
It took me a while to contact these vendors, explain the situation and beg them not to suspend our accounts because of an unforseen action by PayPal, which we had no control over. (In the case of Steam, loosing the account would also have lost us all the games we had previously bought on that site over several years.)
Then, I started jumping through all kinds of ‘hoops’ that PayPal dictated, so that they would release the funds. I did everything – and fulfilled their every demand, however unreasonable, to the best of my abilities.
They still would not release the funds.
After well over a month, they finally re-activated the account: for a day. We had 24 hours to spend the money – whatever was not spent would be frozen for ever…
At this point, I will rather not buy something than use PayPal to do it.
Which is why I am glad to hear that more and more retailers are looking at PayPal alternatives. Here is a good article about one company’s search and why they ditched PayPal for Stripe: if you receive money through PayPal, this is required reading!
Xanthippa's Chamberpot 
December 9, 2011 at 17:56
I had never had that problem with Paypal or Steam, but I will be cautious.
I don’t keep a balance on paypal anymore, so they can’t freeze anything of mine, I think.
December 26, 2011 at 02:40
Xanthippa, interesting story. I haven’t had any problems with paypal but like Derek, I normally don’t keep a balance in there. I wait the few days for the e checks to clear from my savings.
I”d like to know what exactly you did when Paypal unfroze the account for that one day? Your comment about not wanting to use Paypal at that point makes me think you just left it to refreeze? Or did you transfer the funds to a bank account? Or attempt to and Paypal not comply? I would love a follow up piece, if you are able to get this mess straightened out, and I do hope you are! I would also suggest reporting them to the BBB. It can be a tiring process, but it may scare Paypal into repaying all your vendors and give you full access to your funds again, to transfer somewhere else! I would never use Paypal again if they did that to me, and I would stop recommended them to anyone. I really hope you are able to get to the bottom of why they froze your account in the first place.
Xanthippa says:
Thank you for your empathy!
Yes, we did get that situation straightened out: when they unfroze the account for a day, we spent the money right away, even donating the leftover change to a web comic site so there was nothing left for them to re-freeze.
Now, I try to avoid using their services…
December 27, 2011 at 01:10
Thanks for replying. I completely forgot you said the incident happened over a year ago, so I suppose it would have been to late to try and get Paypal to repay everyone. But I’m glad you were able to use all your money in the short time you could. I hope you have found a better way to pay online since then. I find online shopping very convenient, sometimes I’m not able to get out to do the shopping I”d like to, so yes I very much empathize with you and hope you have found another service. Take Care.
Xanthippa says:
Thanks! You too!