40 people came to the door to defend their rights! A group of sellers were deducted tens of millions by PayPal

In early April, many independent website sellers reported that their PayPal account funds were abnormal, and one big seller even said that more than 50 million yuan was deducted from his PayPal account. Soon after, sellers reported that their account funds were deducted one after another.

This incident reached a climax again on June 1, when the PayPal accounts of another 40 sellers were deducted, involving a total amount of tens of millions. In order to find out the truth of the matter and recover the funds, the relevant sellers decided to spontaneously organize themselves to go to the PayPal headquarters in Shanghai to defend their rights.

PayPal transferred tens of millions of yuan, and 40 sellers came to defend their rights

On June 8, 40 sellers whose funds had been transferred away by PayPal spontaneously organized a rights protection movement downstairs of Bank of America Network Information Services (Shanghai) Co., Ltd. located in Lujiazui Financial Services Plaza in Pudong New District, Shanghai, and called the police.

On the day of the incident, PayPal sent personnel to negotiate with the rights-defending sellers and expressed its intention to communicate with the American company, but as of press time, there has been no progress in the incident.

The origin of this incident can be traced back to early June.

Seller Xiao Liu disclosed to Yien.com that PayPal once again deducted a large amount of funds from sellers' accounts on June 1, involving an amount of up to 40 million US dollars. On June 1, Xiao Liu's account alone was deducted 80,000 US dollars (about 500,000 RMB) by PayPal .

Yien.com learned that there are many sellers who have the same experience as Xiao Liu. The funds involved range from hundreds of thousands of US dollars to tens of millions of US dollars. The product categories are mainly concentrated in the fields of home, gardening, 3C and clothing.

In terms of the amount involved, the amount frozen and cleared in this round has exceeded 40 million US dollars. Many sellers have been deducted 600,000 or 700,000 US dollars. Some sellers who sell ordinary products have been deducted 3 million US dollars; some sellers were deducted 270,000 US dollars in early June, 460,000 US dollars in early April, and 10 million RMB were marked.

Among the sellers who are defending their rights, some said that they had violated regulations and might have been complained about for selling infringing products, but some also said: "I was killed by mistake. The goods were shipped normally and there were no customer complaints, but PayPal simply transferred the funds from my account."

All the sellers involved received an email from PayPal without exception. The content of the email indicated that the sellers had violated PayPal's "Fair Use Policy" and that relevant liquidated damages would be deducted from the sellers' accounts in accordance with the "PayPal User Agreement." However, the detailed information and process of the funds being deducted were not explained.

In order to find out how the platform determines violations of regulations and the specific reasons for deducting funds , Xiao Liu contacted PayPal internal staff, and they gave the same answer: " This is the final decision, your account will be reset . " In addition, some insiders also revealed that there will be a major cleansing within PayPal, and it is possible that the next step will be to continue to clean up account funds .

Regarding the whereabouts of the deducted funds, Xiao Liu said: " The deducted funds went directly into the PayPal account . We did not see from the account that PayPal returned the deducted funds to the consumer."

In addition, since October 2021, PayPal 's stock price has plummeted, but PayPal's profits have not been eroded. Some sellers have hinted that the funds that were transferred away have entered PayPal 's pocket? According to incomplete statistics, the funds involved in the transfer and clearing of Chinese sellers' account funds have exceeded 600 million yuan.

Burdened with high debts, a group of sellers disbanded their teams

Due to the funds being deducted by PayPal and the impact of the pandemic, many sellers said that they were unable to make ends meet and their companies were on the verge of bankruptcy. Among the sellers whose funds were initially deducted by PayPal, some sellers were burdened with tens of millions of RMB in debt, and a few sellers were overwhelmed and chose to disband their teams on the spot, including some of the top sellers.

An operator revealed that his former company was a leading seller in Shenzhen. Shortly after being fined more than 10 million yuan by PayPal , the company's independent website business was announced to be suspended and the relevant team responsible for the project was also disbanded.

"On February 27, the company's main PayPal account was blocked for 180 days. On April 28, the company's second small PayPal account was also blocked for 180 days. The total frozen funds have exceeded 110,000 US dollars, " said a seller with heartache.

The seller said: “I wanted to communicate with PayPal to unblock my account, but after a week, the result was not satisfactory. PayPal said that the account could not be unblocked.” The company’s only remaining PayPal account also faces the risk of being linked, which directly led to the company’s inability to turn over funds, and it was forced to announce that the company would cease operations from May 7.

The company had no choice but to go bankrupt, and the workers were probably the biggest victims, but fortunately the company had a good attitude towards handling the situation. The boss said that wages would be paid until May 6, the day before the company stopped operating, and April's wages would be paid before May 15. If employees did not want to wait or did not trust the company, they could directly confirm their April wages.

In fact, as early as the beginning of April, many sellers' funds were deducted, and at that time, relatively few sellers were involved. But in the following months, sellers' accounts were deducted one after another. In the emails received by many sellers at that time, PayPal also clearly informed the sellers that they violated the " PayPal Fair Use Rules" and other regulations such as "suspected trademark infringement and selling counterfeit goods" and were deducted liquidated damages.

Many sellers are concerned about PayPal's penalties and are also disputing its relevant rules.

Funds still cannot be withdrawn after 180 days, the seller: Unacceptable!

Unlike Amazon payments, PayPal's payment standards are higher.

In Xiao Liu's opinion, PayPal's risk control of merchant accounts is very strict, requiring that the customer dispute rate cannot exceed 3%. If the account performance is not good enough, PayPal will permanently block the account and inform the merchant by email that the balance can be withdrawn 180 days after the last payment received in the account . During the blocking period, if a buyer raises a dispute, PayPal will directly refund the buyer in full from the seller's blocked account, but this time it is really serious.

At the same time, sellers are still arguing about the rationality of the regulation that " a fine of $2,500 will be imposed for each violation of PayPal's "Fair Use Rules" , because this regulation was added on September 10, 2021, after most sellers registered their accounts. However, PayPal explained that this regulation first appeared in the user agreement in 2007.

"PayPal's processing rules originally stated that account funds can be withdrawn 180 days after a refund, but this is not the case at present," said Xiao Liu.

After 180 days, the seller has refunded the customer, but PayPal directly deducted the money returned to the customer and attached a corresponding dispute fee of 8USD or 16USD. At the same time, PayPal charged the seller a handling fee of 4.4% + 0.3USD for each transaction.

From the seller's point of view, it is reasonable for them to withdraw the remaining funds, but in the end the money was directly transferred to PayPal's account instead of being returned to consumers, so that many sellers doubt whether they are a source of cash for PayPal.

In this case, many sellers are very cautious when using PayPal in the future, and they also expect PayPal to give them a reasonable explanation.

In fact, in recent years, independent websites have developed rapidly, and many sellers have chosen to build independent websites in order to have more autonomy. But the reality is that there are indeed some extreme practices in the industry under wild growth, coupled with loose supervision, and problems such as infringement of operator trademarks and rampant counterfeit goods are frequent and cannot be stopped despite repeated bans. This situation requires not only the sellers themselves to be strict with themselves, but also third parties to strengthen supervision.

However, as a regulator, PayPal should not only prevent risks and strictly enforce rules, but also improve the transparency of its supervision, especially in the rules it formulates and the penalties imposed on sellers, so that sellers can understand the underlying causes of the incident, so as to better ensure that both parties can coexist in a harmonious, fair and transparent industry environment.

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