Update: A few days after I canceled my account, PayPal sent an e-mail stating they were no longer withholding my funds.
Yep, you have to pay for shipping out of pocket.
Their reasoning, as I was told over the phone, is to combat fraud; so they assign this policy to "high risk" sellers.
The factors that they take into consideration for "high risk" sellers can be read in the following e-mail I received:
Of course, I shipped the items, again out of pocket. I was even forced to pay further costs - out of pocket - when a buyer's items were not grouped together by EBay, which led to the buyer paying shipping individually. I sent the books out shipped together and refunded the over charge. At my expense.
Now I have to play the waiting game.
So I complained with PayPal via an online form, and as expected, received an automated response not answering my questions as to why my account was on hold and whether or not I would get my cost of shipping back before I receive payment for the items.
I then called up customer service. The guy would check out my account.
Do I sell electronics?
Do I sell high-priced items?
Complaints against me?
Have you sold these items before?
He then said it is most likely because my sales are not consistent, meaning I only sell here or there. Also, I haven't accrued enough "positive" feedback in the last 6 months - even though I have been on EBay for 10+ years or so. I then asked about being reimbursed for my having to pay shipping (as shipping is already paid and can be verifired). To which he said it's not a reimbursement it is a refund. He then said I should add in the cost to the shipping the buyer pays! With my response being - it's placed on hold!
He continued on, stating most likely the hold on the funds would be lifted in 24-48 hours once shipping was confirmed and the buyer leaves positive feedback.
Hey, I'm all for stopping fraud, but penalize the bad guys, not me. I can understand slapping this on someone with negative feedback, but seeing how I haven't had one darn negative comment, it's just BS.
Sure, you can argue that PayPal and EBay are private businesses, which fall under the banking laws that enable them to do this - but it just stinks, is what it does.
I've already filed a complaint with my Attorney General's office. Who knows? Maybe if they get enough, something might be done.
And what happens to my money during that 21 day hold?? Hmmm....
Really, what my experience in this tells me is that both EBay and PayPal do not want my business, because I am not a "big" enough seller. That they don't want the occasional person selling an item or two on EBay.
That's fine. I'll be cancelling my PayPal and EBay accounts in about....21 days.