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PayPal risks (chargebacks, etc.)
Thread poster: ecuatraddesign
ecuatraddesign
United States
Local time: 08:25
Spanish to English
+ ...
Oct 14, 2003

Dear colleagues,

I've read a lot about PayPal here in Proz, and it seems that most people are quite pleased with it.

It seems really convenient and I've been considering setting up an account as well. Up to now I haven't really needed one since most of my clients have been local and have paid with cash or check (and now I am working in-house). However, I know of some close friends who run e-bay auctions and websites, who got sc***d by paypal and even were driven out of business due to nasty chargebacks which they were unable to contest. Some were due to people using unauthorized accounts, others were people who claimed they didn't get what they ordered, etc. I am really concerned about this and other risks that come with a paypal account (like people hacking into my account information and using it to go on a shopping spree, etc. I might seem paranoid, but I've seen it all before...

For example, if somebody says they don't like your translation, but really they just don't want to pay you. Can they hit your account with a chargeback? What if there really is a problem with a translation, but instead of going to you, the customer withholds payment in this way. what recourse, if any, do you have? I've heard that paypal sometimes puts chargebacks on your account before even asking you any questions, if they ever ask you at all. Scenarios such as these really freak me out.

Anyway, I'd appreciate it if you could share any negative experiences you may have had with paypal, how they were resolved and if you still work with PayPal after they occured.

Thanks!


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Uwe Kirmse  Identity Verified
Local time: 14:25
Polish to German
+ ...
Why only negative experience? Oct 14, 2003

Paul Ugalde wrote:
Dear colleagues,
. . .
Anyway, I'd appreciate it if you could share any negative experiences you may have had with paypal, how they were resolved and if you still work with PayPal after they occured.
Thanks!


In the German forum I wrote, that I'd appreciate it, if there would be any ProZ member, who could share any positive experience with PayPal, if someone would really have received any payment from customers through PayPal. I repeat this question here - does anybody have such experiences?
I think, they earn their money, when someone, who has registered with them, goes shopping to their partner shops, to Ebay and so on. I don't believe, that a freelancer has a good chance to receive a payment through them, because the customer, who wants to pay, will have to register with PayPal too, he can't pay once and forget them.


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Lucinda  Identity Verified
Local time: 10:25
Member (2002)
Dutch to English
+ ...
No problems with them! Oct 15, 2003

I have had no problems whatsoever with PayPal and have several of my farway clients pay me through them. I bought translation books through eBay and paid with PayPal. Everything went like a charm.

What I would do if I see a charge that is not correct is write a letter contesting it. It is in PayPal's interest that the clients stay happy so I am sure that they would want to solve it to your satisfaction.

Good luck!
Lucinda


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Elise Jansen  Identity Verified
Local time: 14:25
English to Dutch
+ ...
no problems Oct 15, 2003

I have had payments through PayPal, and I am very happy with it. Costs are low, I can draw the money to my account without any problems. So, only positive experiences...

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Michele Johnson  Identity Verified
Germany
Local time: 14:25
German to English
+ ...
Seems dicey to me. Oct 15, 2003

I know many people use PayPal without a hitch, but for me personally it's not really worth the risk. You might find these sites interesting:

http://www.paypalwarning.com/
http://www.paypalsucks.com/
http://groups.yahoo.com/group/nopal-paypal/

The occasional bank fee seems insignificant in light of the horror stories.

Michele


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Jeannie Graham  Identity Verified
United Kingdom
Local time: 13:25
German to English
+ ...
very useful Oct 15, 2003

I have found Paypal useful - privately for buying things quickly and efficiently especially from eg USA where money payment transfer is difficult and costly.
Through the business I have used recently several times to pay translators who are unable or do not wish to receive small payments via bank transfer due to bank charges on their side (not forgetting the hefty charge taken on my side to transfer small amounts).

So far everything has run smoothly with Paypal for both paying and receiving money. To pay someone I am not sure if they have to go through complicated registration - I thought they just needed to provide you with an email address and that was sufficient.

I have now set my Paypal account up to use different credit cards for both business and private.

Hope this helps

Jeannie


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Fiona N�voa
Portugal
Local time: 13:25
Member (2003)
Portuguese to English
+ ...
satisfied Oct 15, 2003

I am quite satisfied with Paypal too. I've had no bother receiving payment for translations and no extra charges have appeared on my account. I think it's an easy way for both payers and payees to avoid hastle with bank charges, etc.

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OneDocument, S.L.
Spain
Local time: 14:25
Member (2004)
French to Spanish
+ ...
Fast, useful, safe, and easy Oct 15, 2003

I have had payments through PayPal. Costs are very low (less than a check), and I have had no problems drawing the money to my account. Theonly problem I see is that I get paid in USD and want to keep USD in my Spanish bank (because USD is so low currently that I don't want to lose money). PayPal does not offer that option, and I'm forced to convert USD into EUR to draw the money to my Spanish bank account.

All the best guys!

Mig


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ecuatraddesign
United States
Local time: 08:25
Spanish to English
+ ...
TOPIC STARTER
Good comments Oct 15, 2003

Thanks to everyone for your comments. It seems like nobody has really had any negative experiences with paypal. The reason I asked for "negative" experiences was to see how they were resolved and if there were any pitfalls specific to translators (and other non-retail service providers). But I guess none of you have lost money because of Paypal, so that must be a good sign...

I guess I will sign up one of these days and see how it goes at first. If anybody has anything else they'd like to share regarding paypal, please do so.


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sylver  Identity Verified
Local time: 21:25
English to French
Too fast a conclusion Oct 25, 2003

Paul Ugalde wrote:

Thanks to everyone for your comments. It seems like nobody has really had any negative experiences with paypal. The reason I asked for "negative" experiences was to see how they were resolved and if there were any pitfalls specific to translators (and other non-retail service providers). But I guess none of you have lost money because of Paypal, so that must be a good sign...

I guess I will sign up one of these days and see how it goes at first. If anybody has anything else they'd like to share regarding paypal, please do so.


Did you read paypal warning's web site as someone suggested? Reality is that you do not have *any* control over what's going on. As long as things go fine, I guess the service is great but, and that's a big "but", when things go wrong, how do you get them right? All you get when you contact so called support services is canned answers.

My personnal experience is not too bad, in that I lost only a couple dollars. I created an account, paid a couple dollars or so to validate my bank account, and it got frozen for no reason (Lucky me, I had not yet received any money). I contacted them and got an automatic reply that I should provide extensive paperwork. (mostly irrelevant) I nevertheless provided the paperwork, and got no reply, the account still frozen. When I emailed them, all I got is automatic replies, irrelevant.

Can I trust those guys with my money? Now, my account was empty, but what if it wasn't? What if I had given my customers the "go ahead" and that they had paid my work that way?

For the record, Wordfast developper used to receive payments for licences via Paypal, it worked great, then for no reason, his account was frozen, no appel process available, no nothing. Whatever money was on the account (substantially more then my 2 dollars) was in effect stolen!

So when you use Paypal, you are taking a risk. The right question is not to ask whether some people use it successfully right now, because of course there are, but they will do when their account get frozen. Yeah, it may be convenient, but if your account is frozen, in the best of cases, it will take months of disputes to recover *your* money, assuming that you do recover it.

Yes, folks who are using Paypal, I would like to hear what would be your reaction if you log in and find out that you can't get your money. Call them? Their phone number is hidden and getting through the switchboard is a pain anyway (and expensive too) Send emails? You will get robotic irrelevant answers. Letters? Same deal. Take them to court? Well, get on the line, because you sure ain't the only one.

I don't take chances on my income when other solutions exist, and I am amazed to see some of you do.


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Jörgen Slet  Identity Verified
Estonia
Local time: 15:25
English to Estonian
+ ...
What alternatives do you suggest ? Oct 27, 2003

sylver wrote:

Did you read paypal warning's web site as someone suggested? Reality is that you do not have *any* control over what's going on. As long as things go fine, I guess the service is great but, and that's a big "but", when things go wrong, how do you get them right? All you get when you contact so called support services is canned answers.

My personnal experience is not too bad, in that I lost only a couple dollars. I created an account, paid a couple dollars or so to validate my bank account, and it got frozen for no reason (Lucky me, I had not yet received any money). I contacted them and got an automatic reply that I should provide extensive paperwork. (mostly irrelevant) I nevertheless provided the paperwork, and got no reply, the account still frozen. When I emailed them, all I got is automatic replies, irrelevant.

Can I trust those guys with my money? Now, my account was empty, but what if it wasn't? What if I had given my customers the "go ahead" and that they had paid my work that way?

For the record, Wordfast developper used to receive payments for licences via Paypal, it worked great, then for no reason, his account was frozen, no appel process available, no nothing. Whatever money was on the account (substantially more then my 2 dollars) was in effect stolen!

So when you use Paypal, you are taking a risk. The right question is not to ask whether some people use it successfully right now, because of course there are, but they will do when their account get frozen. Yeah, it may be convenient, but if your account is frozen, in the best of cases, it will take months of disputes to recover *your* money, assuming that you do recover it.

Yes, folks who are using Paypal, I would like to hear what would be your reaction if you log in and find out that you can't get your money. Call them? Their phone number is hidden and getting through the switchboard is a pain anyway (and expensive too) Send emails? You will get robotic irrelevant answers. Letters? Same deal. Take them to court? Well, get on the line, because you sure ain't the only one.

I don't take chances on my income when other solutions exist, and I am amazed to see some of you do.


What alternatives do you suggest ?
And what do you think of Moneybookers ?


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sylver  Identity Verified
Local time: 21:25
English to French
Alternatives and suggestions Oct 28, 2003

Jörgen Slet wrote:
...
What alternatives do you suggest ?
And what do you think of Moneybookers ?


Most of my customers pay me by bank transfer. That's more expensive, but I consider that, just as I am responsible to deliver the translation, (my part of the deal), my customers are responsible to make sure I get the payment (their part of the deal).

Bank transfer is available to anyone with a bank account (and I would of course not work with somebody who doesn't have one).

Re: Moneybookers. I use them and have found that it works quite fine. There are some important differences compared with Paypal:

1. They answer support emails personnaly.
2. If you call them, you can talk to someone and solve the problem that way (happened to me twice and their attitude was courteous and professionnal)
3. They are legally registered in UK, not in the US, and their office address is not a carefully hidden secret.

One problem, they did use machine translations for several languages so that automated replies and on site messages looked quite weird in French (They may have fixed that since) English was good however.

My experience with them was rather fine overall, so I would see no reason not to recommend them BUT it must be understood that they are relatively new on the market and that one would be smart to take precautions:

1. In case of a significant amount of money (more then a few hundred $), always use regular bank transfers. I value my peace of mind more then a few bucks. Customers paying large amounts seldom argue over bank transfer fees, so bank transfer is the way to go.

2. Always withdraw the money from Moneybookers as soon as it forms a significant amount.

3. Be on the ball. Before you allow a customer to pay via moneybookers, check in your account and make sure everything is in order. That way, you reduce the risk of getting paid on a blocked account. Obviously, if your account does not work, Wait until it is fixed (could be the matter of a phone call) or get the payment an other way.

The thing is that when you accept a payment method, you endorse the responsibility of its workability. You can't say to a client "My account is stuck, please send me the money again via bank transfer", because the client already paid (money was taken from his account, and quite rightfully, he will not pay twice. So you need to be real careful about who you trust with your money.

Moneybooker, in it's present state, seems to be safer then Paypal. (My opinion, nothing else)

I think that if you follow the suggestions above, you don't risk too much using them, and it's a fine solution when you need to collect the payments for small jobs.


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Anette Herbert  Identity Verified
Local time: 13:25
English to Swedish
+ ...
How much charge is much? Oct 28, 2003

Dear all,

I have a little experience with Paypal and it has been just positive until I did some work for a German agency who wanted to pay by creditcard via Paypal. For that I had to register a business account, and was charged €12 for the transfer of €312. The agency said this would be so much cheaper, but when I later checked with the bank (Barclays) a wire transfer would cost me £6 and they did not ask the amount!

So does this sound right to you?

Thanks

Anette


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Jörgen Slet  Identity Verified
Estonia
Local time: 15:25
English to Estonian
+ ...
The approach you suggest is precisely what I had in mind Oct 28, 2003

sylver wrote:
1. In case of a significant amount of money (more then a few hundred $), always use regular bank transfers. I value my peace of mind more then a few bucks. Customers paying large amounts seldom argue over bank transfer fees, so bank transfer is the way to go.
...
I think that if you follow the suggestions above, you don't risk too much using them, and it's a fine solution when you need to collect the payments for small jobs.


Thank you for the fine advice and comments.
Smaller amounts is exactly what I want Moneybookers for, I cannot accept small jobs if bank charges eat away half of the payment. For larger sums, bank charges are indeed not a problem.


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Heinrich Pesch  Identity Verified
Finland
Local time: 15:25
Member (2003)
Finnish to German
+ ...
I'm member of visa Nov 2, 2003

For any customers outside the EU I offer payment through Visa directly. I'm member and the fee is very small, some 0.15 percent of the amount I charge.
But as all my customers are within the EU so far I have had very little use for this VISA-membership.


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