When PayPal Held $25,000 From An eBay Sale

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Let’s talk about the time that PayPal held $25,000 of ours after an eBay sale. PayPal said they were going to hold that money for 180 days and we were not satisfied with that answer, so we took action to get our money sooner.

This was an item we sold on eBay and it was at that time, the largest amount of money we put out for an investment, so we had a lot at stake with the sale. This was eight years ago right when we went full time at flipping.

I bought a security tower for $5,000 because I knew the return was there. This thing was on a trailer and you pull it behind a vehicle and then it folds down to the ground a little like a guard shack. Once you’re inside you have controls that lift it up to 25 feet in the air. We paid $5,000 at a local auction and the retail for it was $125,000 to $130,000 new, so I figured we could get $30,000 to $40,000 for it. There were no comps on eBay so I had to set my own price.

Within a month I had a guy offer me $25,000 and I took it. We sold it through eBay and he paid for it with a credit card. That was back when eBay used PayPal as their payment processor, so it was normal to go through PayPal. As soon as PayPal saw that transaction come in, they held onto it. They said, okay, you are not allowed to touch these funds for 180 days.

Large Transactions Can Be Flagged

It was a large transaction, so it wasn’t unusual for it to be held to make sure it went through and the buyer was happy. Normally it’s only held for a few days though, not 180. I got on the phone with PayPal and they told me it was going to be 180 days and then possibly an extra 180 days.

That was crazy because the guy actually paid for it. Once the transaction came through, he sent a guy to pick this up. The driver picked it up and took it away.

I had something stating that $25,000 was in my account, but it was going to be held for 180 days. I didn’t have the item anymore and I didn’t have the title because I signed it over to the guy. So that was a very scary moment in our flipping history.

Contacting PayPal

At that time I got on the phone again and let PayPal know this was not acceptable and they tried to come after me for an old joint account that had been closed for years for $1,000. They debited the account for $1,000.

So I got on the phone with PayPal and PayPal, I got as high as I could with a supervisor. They’re like, yeah, sorry, we can’t do anything about this. If the guy comes back and says he’s got up to six months to actually dispute this. And I was like, the guy has the item, he can’t dispute it. He has taken possession of it. There is an actual title for this item.

When PayPal Held $25,000 From An eBay Sale

So I messaged the guy who bought it and said, “Hey, by the way, I can’t receive these funds for 180 days, is what PayPal is telling me.” And he told me that’s crazy. He was a lawyer and he even got on the phone with PayPal saying he was happy with the item and would sign a notarized document saying so. PayPal still said they would not do that.

Going Beyond PayPal

I recalled a website called screwPayPal.com, not sure if it still exists, but we went there and it gave us instructions on how to escalate this. We were told to go to our local congressman to file a complaint and it took all of a couple minutes. There’s a standard complaint form they use, so we filled it out and submitted it. Within three days, PayPal had released all of our funds to our bank account, including the $1,000 they’d previously tried to take.

Moral of the story is do not give up when something happens and you know that it’s not the right thing. PayPal was banking on us walking away and saying, oh great, well we can’t do anything. I can’t touch this for eight 180 days. I can’t do anything about it.

And they were going to invest the money and make tons of money off of our $25,000, which is not right. When you know what’s going on is not right, make sure you climb the ladder. Go to a supervisor and keep going until you find a solution.