Tuesday, April 06, 2010

Sorry Folks, PayPal No Longer Accepted at RACS

Just a heads up everyone, we're discontinuing PayPal as a payment method on the store site as of today.

We've been having a quite a few issues with PayPal in recent weeks, and unfortunately I no longer feel comfortable accepting PayPal as a payment method on the store site. I know a lot of people are going to write in and ask why, so let me list a few of the many trouble areas we've had with them:

1) Paypal has the highest processing fees of any merchant service.
2) Paypal has terrible customer service when there is a transaction issue.
3) PayPal's API integration with our web store has been buggy and they do not support it well.
4) PayPal hates Anime. They seem to think all Anime = porn.
5) PayPal makes us capture funds for all orders upfront at the time of the transaction, which cause a great deal of issues if are like us and deal with a large volume of pre-orders.
6) PayPal does not have a good mechanism for handling split shipments or future order changes that require additional shipping and handling charges.
7) Under PayPal's user agreement, they can do anything they like anytime, including restricting access to your funds in your PayPal account for any reason. PayPal balances and transactions are not subject to banking regulations, so users have little recourse when an issue arises.
8) PayPal's commercial account terms of service holds us responsible for all fraudulent transactions even if the user is verified with no real avenue of recourse for disputes.

I could go on and on, but the last one is the by far the most troubling on our end, and has caused the most issues recently.

Right now only about 6% of our customers currently choose to use PayPal as a payment method to place orders, so most of you will no be effected by this anyway. If you do have a PayPal account, we can still accept PayPal's debit card, but (at least for the time being) we will no longer accept direct PayPal payments for new orders. As always we continue to accept a ALL major credit and debit cards (including e-cards), and mailed in payments via personal check or money order.

Everyone that has a PayPal account should get a PayPal debit card anyway. Click here for more. It's issued by MasterCard and allows you to use your PP balance anywhere that accepts credit cards, even if they don't take PP directly. And since it's issued through the banking system, PP debit transactions are bound by the same fraud protection rules and fees as everyone else.

I hope this does not cause anyone too much inconvenience, and we want to thank you all very much for your continued business!


mm said...

I dont blame you one bit.. I admin a few art sites and paypal has been quite a disaster the past year or so.

Todd said...

Doh! That kind of bites from my perspective, but I totally understand. Paypal takes a hefty chunk out of each transaction and I can only imagine how much of a hit you guys take!

Unknown said...

I just wish there was a third way, like Amazon's e-checks, because with Paypal you the seller get ripped off, but with credit cards at 29.99% these days and maxing out every fee they can under the federal laws, I get ripped off. Oh well, what can you do?

Robert said...

I just wish there was a third way, like Amazon's e-checks, because with Paypal you the seller get ripped off, but with credit cards at 29.99% these days and maxing out every fee they can under the federal laws, I get ripped off. Oh well, what can you do?

E-Checks are problematic for small merchants. The fees are high and there are fewer fraud protections. For folks using PayPal as a gateway to just fund out of their checking account, a debit card is a better option on both ends, and the processing fees are less than half what PayPal charges for the transaction. For credit card transactions, if a customer pays off their balance each month they incur no fees in the transaction. I have done this for years for digital transactions and have never paid an interest payment or a fee or penalty. Some cards even accrue points or cash back rewards dollars that means the banks will actually paying YOU to use the card.

For folks carrying a balance they should pay that off as soon as possible and never carry one again. The banks are only able to charge those fees and take advantage of people with high interest rates if people let them.

Also of note, while I complain about PayPal high fees, that is NOT why we dropped them. Let me give you one word - FRAUD.

HSaabedra said...

It does seem that Paypal is getting worse and worse by the day.

I'm looking at e-commerce solutions for a future relaunch of my netlabel and I just don't see myself using PayPal as a merchant.

As a general customer, I've had no issues in terms of sending or receiving money as its how I get paid, but I'm becoming more and more wary of the service as its recent moves to expand to other areas without being regulated under current banking laws really concern me.

Have you considered Google Checkout as an alternative at any point?

Robert said...

Have you considered Google Checkout as an alternative at any point?

We are considering it, but it won't be something we implement right away.

Unknown said...

can't really blame you, considering how many order's I've placed at the store with no trouble, I'll still buy even if paypal's gone, its more inexpensive here...

Matt said...

For all the folks out there who hate credit cards, consider this…. Credit cards offer better fraud protection vs. using your debit card online. The credit card companies are far more tenacious in pursuing and resolving fraud. In my experience, your local bank could care less if your account is cleaned out. And if you have overdraft protection…. oh dear, now you’re in even more trouble….. But there is an alternative that isn’t too much of a hassle. Check with your bank about opening a second checking account for the sole purpose of online shopping. Here’s the criteria to ask for – Free checking, a debit card for the account (preferably one issued by MasterCard or VISA), the ability to transfer money via the banks web site, no minimum balance, and above all else make sure you opt out of the overdraft protection. That way, if an unauthorized transaction comes through, it will simply be rejected and you won’t get stung with overdraft fees plus the charge it’s self. The other half of that is, you only keep a dollar or two in the account when you’re not using it. You only transfer money into it right before a purchase. In my case, when I transfer money online, it’s available immediately.It’s sort of like a Green Dot card, but more covenant to reload because you’re only dealing with your bank. I’m sure it’s not a 100% fool proof, but it may be the safest way of using a debit card online without putting your money at risk.

Robert said...

Based on the type and scope of fraud we see, I don't want or carry a debit card of any kind.

ILoveGeniuses said...

while i'm not gonna argue with anyone on this problem for me is the bank wont give me a credit card since I'm currently out of work. I'm 27 and yet still have to use my mother's CC every time I make an order on here. Then just hand her the amount I spent on here in cash, so she can pay her bill once it arrives. I was considering switching to money orders, but its getting pricey to send even the smallest tiny thing to the US. Plus Money Orders for International made in US$ are now an extra $7.50, so I just stuck with borrowing the CC from my mom. However, I really dont mind too much. I've been using RACS for I think around 12 years now... possibly bit longer, and I love it here.

ILoveGeniuses said...

I'm not gonna argue on this issue with everyone. Just for myself its a bit of an inconvenience. Sadly the bank won't give me a CC since I'm currently out of work. I'm 27 and yet still need to call and ask my mom to borrow it every time I make an order on here. Really sucks. -_-
I had considered MO's. Just I've been getting so pissed with the Canada Post bumping up the price of even a basic stamp to the US. Not to mention the banks are now charging $7.50 for creating an International Money Order, which I'd rather not put up with. Still I'll be honest. I don't mind putting up with things the way they are for now til I'm back to being in a better financial situation. I've been a customer at RACS for over a decade now, and no matter what, its not about to change. ^_^