Consumer complaint received 2019-08-16
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Unexpected or other fees — 
Company: Paypal Holdings, Inc (MI)

Hello, this issue happend a few months ago however I am just now finding out about CFPB to file complaints. This complaint is regarding service with PayPal. First of all for a small background, I run a sneaker purchasing service for customers ( XXXX XXXX on XXXX ) in which people pay us a fee to obtain a sneaker for them. Why would someone pay someone else to buy a sneaker for them? Well, there are sneakers that resell for a lot of profit. For example you can check XXXX and XXXX for examples of sneakers that resell for a lot. Customers pay us a fee to get these sneakers for them before they sell out so that they can pay retail value instead of the insane resale values. 

On XX/XX/2019 we had a customer from XXXX XXXX who requested a bulk order of 100 pairs ( XXXX XXXX XXXX XXXX XXXX  ' ) which came out to {$24000.00}. As soon as I received the funds, which was {$23000.00} after PayPal fees. Then, I had forgotten about PayPal fees in my initial bill to the customer so they sent another payment of {$400.00}, which was {$380.00} after fees. Once we had the required funds to fufill the service for the client, I transferred {$10000.00} to my bank account. The reason I did this is because in order to use the customers money to buy the sneakers I needed to transfer it to my bank so I could use my card on the websites ( XXXX and XXXX ).  This resulted in {$10000.00} being in my bank and about {$14000.00} still in the PayPal balance. Because they did not understand my business or what I was doing, they limited my account. This prevented me from being able to withdraw or transfer. While PayPal was in the process of locking my account, I had already secured 5 pairs for the customer which was valued at about {$1200.00}. However, after I saw my account was locked, I immediately wanted to refund the buyer the rest of their funds so that nothing got held up. Please note, {$24000.00} is A LOT of money and PayPal seemed to care less in this situation. So, after securing the 5 pairs, I had about {$8800.00} in my bank account and still about {$14000.00} in my PayPal balance. Because I wanted to refund the customer, I tried to transfer the {$8800.00} back into my PayPal balance so that I could refund the buyer their remaining funds. However, because my account was locked PayPal refused to let me transfer the BUYERS funds back into my balance. I was appalled as to why their system is setup like this, however in attempt to resolve the situation as quickly as possible ( Mind you there is about {$23000.00} being held up right now ) so that no sides were losing money, I gave PayPal a call to ask if they would temporarily life the deposit hold so I could add the buyers money back into my balance and be able to facilitate the refund. To no surprise, given how bad their systems are setup, their service was also terrible. The customer support representatives were rude. One lady even asked me why I was transferring {$24000.00} which is completely unprofessional and out of context and then she had the audacity to give a rude comment of " why in the world is someone buying 100 pairs of sneakers! ". This was absolutely ridiculous and quite frankly my or my buyer did not have time for this nonsense. 

My buyer could not afford to wait 6 months just to receive their refund. That's absolutely ridiculous. So, to speed up the process and refund the buyer, we decided to directly bank transfer the {$8800.00} back to the buyer in XXXX XXXX and then do a PARTIAL refund of what was still in the PayPal balance to the buyer. I thought all would be well and solved. Well, of course not. When I refunded the buyer, my balance went - {$1000.00}. This was certainly not a miscalculation. What happend was that in the process of the refund, instead of PayPal refunding the fees that they originally took, they charged me! Absolutely ridiculous. So I gave them a call to say there was a glitch in the system and that it had charged me the fee instead of taking it from their system. The people on the phone were completely clueless and literally started making things up because they did not understand. The lady said they did not take the fee from me, etc. But then I told her to do the calculations herself and everyone in the office was stunned. After talking to a manager, they decided to start making things up that was basically along the lines of when you refund a buyer PayPal keeps the fees. I then asked them where in their terms of service that it said this and they could not give me a reference. Absolutely ridiculous. So, my business has been down {$1000.00} ever since simply because PayPal 's systems are very badly engineered and they don't understand the business. It's ridiculous to think that I lost money off that deal not because of my services but because of PayPal. So sad.