paypal sucksLet’s face it – PayPal is ubiquitous and is a necessary evil if you want to do business online. Yes, there are alternatives, most prominently Google Checkout, however the fact remains that PayPal is the king of online payments. Here are three ways that PayPal sucks and what you can potentially do about the problems:

PayPal Holds Payments

This happened to me once and made my life positively miserable. My mother tried to send me some money via PayPal when I was overseas. I was in a dire situation economically at the time and we decided that PayPal was the fastest way to get me some money so I could get out a jam (I was using my PayPal debit card to withdraw cash overseas).
PayPal, in their infinite wisdom decided that the transaction looked suspicious and held the transaction. The money was held for several weeks until they finally refunded it to my mother. Meanwhile, she ended up having to spend the money to send me cash via Western Union instead (which was a royal pain the neck, since there was only one place in that city which could receive Western Union payments).

How to Get Around It

Sadly, this is one of those issues which you can’t get around, at least not completely. The two solutions are first, not to rely on PayPal for emergencies. Second, if there is an issue, click on “Contact Us” and go through their system until it lets you talk to a human being.
By calling instead of using their online service, you can usually get these things resolved (that’s how I got the problem resolved – I called them, then had my mother call them. Ultimately, after lots of arguing, they refunded the money to my mother).

Dispute Resolution

This is another area which is a common complaint for online merchants and frequently leads to people saying that PayPal sucks. In essence, PayPal’s dispute resolution program is opaque. They don’t provide you with the tools you need to really understand why they make a decision that they make and often, they’ll hold your money while making a decision.

How to Get Around It

I dealt with this kind of problem as well, a number of years ago when I bought a cell phone. It turned out to have a defective battery which didn’t hold a charge at all (the seller never mentioned this in his ad on eBay). PayPal took his side in the dispute, claiming that it wasn’t a substantial difference from what was described.
As with other problems, I found that calling PayPal rather than using the online system is the way to go. I called and made my point, then demanded a supervisor. Once I got a supervisor on the phone, I was able to get them to admit that I had a point and they refunded my money.
Of course, most of us have the problem in reverse. Again however, I find that the best way to resolve problems is to talk to people. Call the guy who has initiated the dispute and try to work it out. Or call PayPal and make your own case.

PayPal Fees

Finally, many people complain about PayPal fees, which are charged regardless of the funding source on business accounts. While it makes sense that you have to pay the fees for credit card charges, transfer from bank account and from PayPal balance shouldn’t incur such fees.

How to Get Around It

Sadly, you can’t. You can use a personal PayPal account for certain payments and you can use Mass Pay to pay people who work for you (it costs a lot less than using regular PayPal services), but sadly, by and large, I don’t have a good way to get around this. All you can do about this is to lament that PayPal sucks…