PayPal ISSUES

**BidFather** · 09-05-2010, 05:40 PM

Hi guys, as you may or may not know, PayPal is apparently on a crusade to destroy Penny Auction websites... BidFather has jumped through hoops for PayPal to get verified... We have paid them thousands in fees, and we have a "rolling reserve" on our account where PayPal holds 20% of our income for 6 months... All this, and they still want more.

Yesterday we received an email from PayPal about limited access to our account, which was strange because the only thing we were limited from was closing our account. The email stated that we had to remove cash auctions AS WELL AS ALL gift cards???

After numerous phone calls and emails to PayPal, the outcome does not seem to be very good... PayPal has basically given us an ultimatum to either remove all gift card auctions and cash auctions or lose our account.

So I've added a poll to this thread to help make the decision of whether or not to keep PayPal and follow their rules, or dump PayPal and continue with the gift cards...

My BIGGEST problem about this whole situation is the fact that we have been open for 2 months, and we have been through nothing but hell with PayPal, and sites like Swoopo.com and Bidrodeo.com who have been open for much longer, accept PayPal, and STILL auction off gift cards... How is that fair?

**bradjar** · 09-05-2010, 05:54 PM

I have had some minor issues with Paypal and it is even difficult to get another individual account if your email has one already. Sometimes people share the same email address. Bidfather has always been innovative with respect to your auctions. Try Goggle Checkout or Western Union, they may be an innovative payment option.

You should be in a position of strength, Look how many potential customers you could be bringing to them. Make sure you keep your bidders in mind that registration with their new account would be a fairly painless process just like your registration process.

Well I guess it was my 3 cents........

**BidFather** · 09-05-2010, 05:54 PM

We're also taking suggestions as to what other payment methods you guys think we should add to the site...

**bradjar** · 09-05-2010, 05:59 PM

Try Moneybookers.com or Perfect Money.com, I believe E-Bay uses Moneybookers. Just a couple for you.

**BidFather** · 09-05-2010, 06:04 PM

Originally Posted by bradjar

Try Moneybookers.com or Perfect Money.com, I believe E-Bay uses Moneybookers. Just a couple for you.

Thanks bradjar, will check into Moneybookers now

**megamanwin** · 09-05-2010, 06:51 PM

Originally Posted by BidFather

Hi guys, as you may or may not know, PayPal is apparently on a crusade to destroy Penny Auction websites... BidFather has jumped through hoops for PayPal to get verified... We have paid them thousands in fees, and we have a "rolling reserve" on our account where PayPal holds 20% of our income for 6 months... All this, and they still want more.

Yesterday we received an email from PayPal about limited access to our account, which was strange because the only thing we were limited from was closing our account. The email stated that we had to remove cash auctions AS WELL AS ALL gift cards???

After numerous phone calls and emails to PayPal, the outcome does not seem to be very good... PayPal has basically given us an ultimatum to either remove all gift card auctions and cash auctions or lose our account.

So I've added a poll to this thread to help make the decision of whether or not to keep PayPal and follow their rules, or dump PayPal and continue with the gift cards...

My BIGGEST problem about this whole situation is the fact that we have been open for 2 months, and we have been through nothing but hell with PayPal, and sites like Swoopo.com and Bidrodeo.com who have been open for much longer, accept PayPal, and STILL auction off gift cards... How is that fair?

as much as I love the convenience of paying with bPayPal they are extremely annoying to deal with. I know from experience back when they limited my account and made me show them documents of where I lived and cell phone number countless time. Every time I dealt with one problem with them I felt that there was something else going wrong. I understand what you are going through and the hassle is not fun. I think you should get rid of PayPal and keep the gift cards and find a different alternative to be able to pay and accept cash electronically other then the slow basic credit cards. Bradjar money bookers sound like a good idea to look into and I heard other sites are doing the same thing since more and more sites are having trouble with paypal.

**Duster** · 09-05-2010, 09:31 PM

I think Pay Pal has a love hate relationship with Penny Auctions. It would be nice if all (or at least a majority of) the owners of penny auction sites could ban together and dump Pay Pal for other options. I don't think they realize how much money they are making off of PA's.

For another option have you looked into Authorized.net? There are penny auctions sites using them. The one that comes to mind first is Lincoln Bidz. Maybe you can talk with them and they can tell you what is involved. On sites where I have paid with Authorized.net I have no complaints or problems.

You have a great site don't let Pay Pal ruin it.

**realbidtowin** · 09-05-2010, 10:07 PM

Originally Posted by Duster

I think Pay Pal has a love hate relationship with Penny Auctions. It would be nice if all (or at least a majority of) the owners of penny auction sites could ban together and dump Pay Pal for other options. I don't think they realize how much money they are making off of PA's.

For another option have you looked into Authorized.net? There are penny auctions sites using them. The one that comes to mind first is Lincoln Bidz. Maybe you can talk with them and they can tell you what is involved. On sites where I have paid with Authorized.net I have no complaints or problems.

You have a great site don't let Pay Pal ruin it.

Authorize.net has more PA sites than any other gateway

**BidFather** · 09-05-2010, 11:04 PM

We actually do use Authorize.net already and haven't had any problems at all with them. PayPal on the other hand has been a joke since day one.

**Duster** · 09-05-2010, 11:15 PM

Sorry

, I should have checked first. At least you have a second option and don't have to scramble to find another payment option.

**BidFather** · 09-06-2010, 12:08 AM

Originally Posted by Duster

Sorry

, I should have checked first. At least you have a second option and don't have to scramble to find another payment option.

It's ok, and you're right, we could drop PayPal tomorrow we just want some input as we do at least 50% of our business through them...

On a side note, I've contacted a few law firms about a potential lawsuit against them for this whole situation, and hopefully we can get somewhere with it. We have also joined a class action lawsuit regarding PayPal's illegal "rolling reserve".

I'm sorry, if it's ok for Swoopo.com to use PayPal and sell gift cards, then its ok for BidFather to do the same. I sent an email to PayPal that we will not be removing the gift cards until big name sites such as Swoopo.com do, and if they decide to freeze our account then so be it.

**megamanwin** · 09-06-2010, 12:20 AM

Originally Posted by BidFather

It's ok, and you're right, we could drop PayPal tomorrow we just want some input as we do at least 50% of our business through them...

On a side note, I've contacted a few law firms about a potential lawsuit against them for this whole situation, and hopefully we can get somewhere with it. We have also joined a class action lawsuit regarding PayPal's illegal "rolling reserve".

I'm sorry, if it's ok for Swoopo.com to use PayPal and sell gift cards, then its ok for BidFather to do the same. I sent an email to PayPal that we will not be removing the gift cards until big name sites such as Swoopo.com do, and if they decide to freeze our account then so be it.

Way to go bid father i love your site dont let paypal ruin it. You have my support

**Foopile_Jim** · 09-06-2010, 01:17 AM

Bidfather,
We went thru almost exactly the same thing with paypal. They won, we dropped them. Fortunately we have multiple processors who were happy to have our business.

**BidFather** · 09-06-2010, 02:24 AM

Originally Posted by Foopile_Jim

Bidfather,
We went thru almost exactly the same thing with paypal. They won, we dropped them. Fortunately we have multiple processors who were happy to have our business.

I assume they'll win as well, but not without a fight.

**BidFather** · 09-06-2010, 12:23 PM

Good news everyone... After about 20 emails and phone calls we received this email from PayPal

Thank you for making the necessary changes to your website in order to
comply with PayPal's Acceptable Use Policy. After a recent review of your
account, we have found that you have completed the requirements to remove
the limitation and have granted an appeal. Please note that your use of
PayPal for any other violation of our Acceptable Use Policy in the future
may result in a permanent account limitation. We appreciate your
cooperation in resolving this matter. In the future, if you have any
questions regarding what items are prohibited under PayPal's Acceptable Use
Policy, please see the following URL for the complete text:

https://www.paypal.com/cgi-bin/websc..._frame-outside

We sincerely apologize for any confusion regarding the action on your
account

, currently only cash gift cards are a violation of the Acceptable
Use Policy. The remaining gift cards on you website are not in violation as
they are direct gift cards with merchants and not cash.

Again, we thank you for your cooperation in resolving this matter and
appreciate the fact that you chose PayPal to accept payments for your
business. If you have any further questions, please contact the PayPal
Acceptable Use Policy Department at [email protected].

Sincerely,
Joel
PayPal Acceptable Use Policy Department
PayPal, an eBay Company

Sadly, it took us threatening legal action to get someone to actually look into the limitation they put on our account, but we are happy none the less. Thank you to everyone for the support!

**Foopile_Jim** · 09-06-2010, 12:48 PM

Wow thats awesome bidfather..wtg!

Hope it lasts for you, they change thier terms so often anymore. The main reason we went ahead and dropped them was due to the high fees they charge. But it was a nightmare for us just the same..

Congrats an hang in there!

**bradjar** · 09-06-2010, 03:51 PM

Would your agreement with Paypal prohibit you from adding another. It would be great to have an alternative to choose from when winning a cash auction. I am not too sure if it is too expensive on your end to carry two options for bidders. I would bid on cash auctions then.

**BidFather** · 09-06-2010, 04:43 PM

Originally Posted by bradjar

Would your agreement with Paypal prohibit you from adding another. It would be great to have an alternative to choose from when winning a cash auction. I am not too sure if it is too expensive on your end to carry two options for bidders. I would bid on cash auctions then.

Unfortunately bradjar, we have to suspend the cash auctions for the time being, as PayPal considers this a form of gambling. We are however, still looking into Moneybookers and plan to add them shortly.

**JKDBlake** · 09-06-2010, 05:30 PM

Originally Posted by BidFather

It's ok, and you're right, we could drop PayPal tomorrow we just want some input as we do at least 50% of our business through them...

On a side note, I've contacted a few law firms about a potential lawsuit against them for this whole situation, and hopefully we can get somewhere with it. We have also joined a class action lawsuit regarding PayPal's illegal "rolling reserve".

I'm sorry, if it's ok for Swoopo.com to use PayPal and sell gift cards, then its ok for BidFather to do the same. I sent an email to PayPal that we will not be removing the gift cards until big name sites such as Swoopo.com do, and if they decide to freeze our account then so be it.

Definitely decide what to do re:lawsuits because you don't want to lose your rights to sue by not being a member or via an arbitration clause burried in the various paperwork you've probably signed! [email protected] if you would like any more suggestions or thoughts.

**galaxy** · 09-08-2010, 02:40 PM

Thanks for the info, BidFather! I know that some of our users would prefer if we had PayPal, but we are afraid to use PayPal because of their history of negative dealings with penny sites. We are looking for a good alternative to paypal, so any advice on a better payment processor would be much appreciated. Thanks!!

**y2p731** · 09-08-2010, 03:55 PM

Originally Posted by BidFather

Unfortunately bradjar, we have to suspend the cash auctions for the time being, as PayPal considers this a form of gambling. We are however, still looking into Moneybookers and plan to add them shortly.

Have you folks considered Google Payments in the future?

**Rob** · 09-09-2010, 09:02 AM

On a side note, this auction on BidFather is probably the greatest auction I've ever seen on any penny auction site.

Gibson Flying V Electric Guitar | BidFather

good for you guys!