This post is not intended as a rant, but a heads up on some practices that may pick your pocket using Paypal and your checking account.

If you make a purchase using Paypal that draws on your checking account, and a credit is issued, be aware that it might take 5 business days to have the funds credited to your Paypal account, even if the credit is made 5 minutes later. In the meanwhile, any purchases made will act as if those funds don't exist anywhere, and they will stupidly continue to request funds from the linked account, oblivious to the amount they placed in their majestic 'temporary hold' status.

Your money disappears while the Federal reserve bank/clearinghouse takes note, and if the account linked happens to be overdrawn, poof, you get a hefty service charge for overdrawing when you actually didn't! To make matters worse, they will repeat the attempt sticking you with even more charges.

If you think you are out of the woods now, please read on. OK, 5 days have gone by, money is now mystically in your Paypal account, and they still continue to request the money from the bank, incurring you even more charges!!! Calling them to abort this process and take the funds from your Paypal account results in a 'we can't do that' response, and they recommend you transfer funds back to your account from Paypal (no fee from them, but one from your bank (depends on bank.))

Guess what, they re-request in 3 days, but say transfers will take 4-5 business days; shit, more charges!

To be honest, I could have avoided this by being rich, not buying my brother a Christmas present, or transferring money from a 6% yield to a 0% yield.

Just be careful, and remember the getting money back thing, is a slow and arduous procedure. Take care, my best to all for a great holiday, and time to gift a couple from another account :-)

This is why no one should use Paypal and eBay should die so long as they mandate its use.

Agree.

What was once convenient, has now become cumbersome to the extent that nothing can really get done. Bureaucracy, how I love you :-)

My best for a great holiday, one free from anything other than the normal financial pop!

It would be nice to have some Paypal alternatives. It's all very well saying that nobody should use it, but I'd have stopped using it years ago if it was possible to do so.

I can't say for the UK, but Google Checkout and Amazon.com payments work fine here. Both will function with a normal debit card.

I'll have to sort myself out with an account with one of them. But I've seldom seen them be accepted. At least comparatively.

Edit your Amazon account, payment methods, and uncheck the box saying to process as a pinless pos sale. You'll save the bank fee for pos/pin transactions if you do so!

I make it a point to email people that I'd love to buy their stuff but don't do business with Paypal. I also send them the links to information about Amazon and Google Checkout (I'm just picking those out of sheer popularity, btw, not because I think they're somehow the best).

I know this is a problem for remotely selling used stuff, but I do most of that locally anyway and only accept cash. If I had to do it remotely I think I'd still demand a paper check and wait for it to clear.

Unfortunately, you can expect some variation of this problem in any situation where you debit your bank account to pay somebody, then get a refund. Debits are gone, immediately. Credits aren't available, until the bank's policy on holds is satisfied. Since there are few alternatives to using banks, and they aren't going to change the rules for you, you just have to not spend money you don't have in available funds, or don't know you're going to need immediately.

Adding Paypal in the middle just makes it worse, especially when Paypal does something so stupid as continuing to try to charge your secondary account even though the secondary account is overdrawn and there's a balance in your primary account. That's amazingly brainless, and it makes it sound like they'd rather cause you misery than get their commission.