Official Luthiers Forum!

Hi Everyone,

I had an experience I would like to relate....

I sold a set of "Cuban" mahogany to a forumite and when paypal saw the word Cuban Mahogany (Which comes from St.Croix)in the buyers memo,they reversed the charge and "froze" my account (including all "clear" money that is in it) until I explained to them where the wood came from.

They also wanted other personal/business info like "what activities I engage in during the normal course of my business",and a "brief, yet comprehensive explanation of my business model" and "a full list of the products and services i offer in conjunction with paypal."

Last time I checked I wasn't partners with paypal.

I told them I wouldn't give than any information.

Okay fine, so I said I want to close my account.

Not so easy, Unless I gave them all the info the wanted,in writing they would "restrict" my account for 180 days-yes 6 months until I could either close the account OR get my-My My My money!!!!!!!!!!!!

And that's only if the info I gave them satisfied their criteria. Since I have no way to document wood that I have had for 10 years (that was twenty years old when I got it) I am just going to have to wait the 6 months (while paypal makes the interest!) to get my money.

By the way, I can still put all the money I want in (just can't take any out!)
So from now on I will be doing business the old fashioned way-by check or money order-unless of course my bank doesn't like what I am selling!

Nice.

A search on the Internet will soon tell you that you are not the first person that Paypal has refused to release money to. Some big Internet traders have gone to the wall because Paypal have refused to unlock accounts. I had a similar bad experience and looked for alternatives but reluctantly had to go back to them. Governments should step in and put more regulations in place to protect PayPal accounts holders.

I probably should have just put GRENADE LAUNCHERS in the memo. Bet it would have gone through

I refuse to use my paypal account. I tried to close the thing and it was such a hassle that I just closed the bank account, paypal can pound sand.

It's a long shot, but you might want to consider contacting Gibson and following their example contacting congressmen and the President. Otherwise, play ball with them to get your money back and then either shut down your account or be a lot more vague if possible in the future. The reason I bring up Gibson is that it wouldn't hurt their case to show that smaller operations are getting screwed as well.

I remember hearing a story during my tenure at Martin about a box of ivory found behind some ancient boxes of junk with a fairly ancient handwritten date (BTW this took place decades ago at this point.) Needless to say panic ensued in full on CYA mode and as I recall it ended up being usable after it was documented to death and then some.

Anyone know of an alternative to paypal?

I don't know if this happens in the us, but in Canada you can just do an interac bank transfer. Basically just send it to recipients e-mail address with a password, recipients opens e-mail, enters password, money changes hands. No risk, instantaneous, only costs 1.50 no matter how large the amount....
It's my new favorite thing...

Brad wrote ..... "what activities I engage in during the normal course of my business", and a "brief, yet comprehensive explanation of my business model

Here would be my answers ...

1 - I buy materials, then I make things from those materials, and then I sell the things. Those are the 3 main activites.

2 - I try to sell most things I make for more than they cost me to make, including loaded labour costs. If I didnt, I would go broke.

_________________
Tony Karol
www.karol-guitars.com
"let my passion .. fulfill yours"

I must be lucky I never had a issue in 10 yrs I will have monies held on overseas Ccard until they clear and that may take a 14 days . I also know and maybe Tony can chime in here that there are many government red flags that can be raised. I know transactions of $10,000 in a bank must have some paperwork.

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John Hall
blues creek guitars
Authorized CF Martin Repair
Co President of ASIA
You Don't know what you don't know until you know it

I wonder if those small credit card swipy thingies that you can use on your iphone/android would have some type of electronic payment method thingamabob.

Brad, did you get any explanation from Paypal? I'm assuming this has to do with the trade embargo and not CITES.

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http://www.chassonguitars.com

Yes,
Kent, it seems that it is the trade embargo they are talking about-so I told them the truth which is I bought the wood ten years ago at a garage sale.

Yes, Tony that is pretty much what I told them-They now say that they will review my answers to determine if they will release my money before the 180 days.

They said they will have an answer within 48 hours,so I should know something by tomorrow.

I think this is fairly typical of PayPal. I went through a similar ordeal with them the first time I did the Zip Flex group buy. It was a nightmare. $7000 of other people's money tied up. Finally after several go-rounds and many phone calls, I made the point that I was a customer of 10 years and in good standing. "Had I ever during that time caused a problem, did anything questionable? Had anybody file a claim against me?" They said "no". And I said, "please take that into account and release my funds". And they did.

Sometimes, a little perspective can help.

Mike

To do credit cards you have a number of methods , Your local bank , an online service , and paypal. For me Paypal is the best price option. My local banks charges me $600 a year for the card reader , also 3% and .$50 per transaction , Way too high Sams Club also offers a deal. For smaller accounts I can see the pain of paypal for larger accounts we have a customer service number to call when things are messed up and it is pretty easy for me .
There are some regulations that we may not know about. When using wood it is best to use the scientific name or just "Wood".

_________________
John Hall
blues creek guitars
Authorized CF Martin Repair
Co President of ASIA
You Don't know what you don't know until you know it

Clearly, the Federal Government recognizes PayPal as a major player in the transaction business and has somehow gotten them to play a role in looking for all kinds of suspect behavior. I like John's suggestion. Don't be too specific. "Craft Supplies" works for me. If you are not doing illegal things, you have nothing to worry about. Don't go around snapping their trip wires.

Have no experience from a seller's standpoint but have seen or used and know a couple of people who use Apple's "square" (I think that's what they call it) to credit card buy some things. I think it's about 2.5% fee -- a little higher if you type in the accout number rather than swiping a card). Also have seen some kind of google system that some people use. Don't know if these are reasonable alternatives.....

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Chuck Kish

Do as StewMac does. Mark the wood as "Guitar Parts". They do that on Custom's Declarations when they ship things to us in Canada.

Bob

Holy cow. Have you checked smaller banks? I'm with a good sized bank...maybe 20 branches or so, but it's not a big conglomerate. They support small businesses, and they have a great deal with a merchant services provider. I bought the equipment for $250, and I pay something like $7.00 a month as a service fee. My AMEX rate is high, as it is for everyone, but everything else is about 1.8%. That's why I left my big bank and switched everything over to these guys. Far better service, and far cheaper. I actually feel like they value my business.

Anytime you deposit $10,000 or more in cash the bank must fill out a CTR-104 form. CTR stands for Cash Transaction Report which you are made aware of. There is nothing suspicious about making a single, or multiple large cash deposit. You may be asked for a reason you ahve so much cash, but as long as you fill out the form, no problems. However, it is suspicious if you try to structure your deposits to avoid the form. I had a guy come in once with a shoebox containing over $100,000 in small bills. His mom had died and she did not trust banks so she had the money hidden all over the house. Literally had it stuffed in her mattress, in coffee cans in the cupboard, shoe boxes, you name it. The guy made the deposit, filled out one form, no problems. Try to bring in amounts under $10,000 for several weeks to avoid the CTR-104 and you will end up generating a suspicious activity report which you will not know about. Then the Feds will be watching you. People structure deposits to try and beat the system so they are watched more closely. Why are you doing these small deposits nearly every day? Laundering money? Running a cash business and not reporting all of your income? The Feds want to know. Isn't banking exciting? Of course there are legitimate businesses that make daily small cash deposits.

Anyway, I have a contact that will give you the CC machine for free and charge you a nominal monthly fee for the service. Competitive rates and all that jazz. If anyone wants the number, PM me. I believe they service nationwide but I have to check. It doesn't hurt to talk to someone to see if you can save some bucks. I gain nothing either way.

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http://www.CostaGuitars.com
PMoMC

Make sure your effective rate is close to that 1.8%. Often, after all of the fees and surcharges, and whatnot, the effective rate is much higher than the rate they quoted you.

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http://www.CostaGuitars.com
PMoMC

Sure Tony (said with my best Saprano's accent). We know ya gettin a cut of da action. Fugetaboutit. Worm food and alluh dat.

Michael "Pagalioni" O'Melia

After I answered their questions they unfroze my account.

I guess they just wanted a piece of paper showing that I was really selling an exotic wood known as "Luann"

Well, I also pay $.20 per transaction, and pass throughs from Visa and MC. I'm still hovering at %2. It's far better than $600 a year, 3% and $.50 per transation.

Don't aks no questions you don't want to know the answers to.

Also, refer to my cut as a "pizzo" from now on. Show some respect!

_________________
http://www.CostaGuitars.com
PMoMC