- Payment holds are parts of your PayPal balance that PayPal “freezes,” preventing you from having access to the money that has been paid to you for a period determined by PayPal.
- Chargebacks are payments that buyers have made to you using their credit cards that have been reversed, generally because they have called their credit card company to complain about their purchase, in response to which the credit card company has reversed the charge.
Why They Happen
There are a number of reasons for payment holds and chargebacks, some of them within your control as a seller and some of them not. The potential causes of payment holds and chargebacks include:- Newness of your PayPal account. If you’re a new eBay seller with little or no eBay or PayPal track record, PayPal may hold the payments that you receive for a brief period of time in each case to give the transactions time to fully clear and the buyer time to evaluate their purchase. This kind of hold will generally stop as you build a successful trading history.
- Slow types of payment. In cases in which buyers pay with an electronic check, PayPal will hold the payment to give the check time to clear. You’ll also be notified by PayPal not to ship the item until the check clears and the hold is lifted.
- A dissatisfied buyer contacts PayPal. When a buyer initiates a dispute with eBay or PayPal following a sales transaction you had with them, PayPal may initiate a funds hold until the dispute is resolved to PayPal’s satisfaction (not necessarily to the satisfaction of the buyer or seller).
- A dissatisfied buyer contacts their credit card company. If a buyer has gone directly to their credit card company with their dispute, the credit card company may issue a chargeback, withdrawing the payment. At this point, both you as the seller and PayPal as the intermediary enter into a dispute with the credit card company and the buyer, with the resolution up to the decisions of the credit card company.
- PayPal finds account discrepancies or worrying ties. In rare cases holds may also be placed on accounts when PayPal discovers as a part of an ongoing investigation that the funds in your account or your account as a whole are linked to illegal activity.
Read on to learn more about how to handle and minimize the effects of holds and chargebacks.
