PayPal – The Worst Customer Service Experience of My Life

For a large portion of our websites we use PayPal to receive payments. Sometimes we use them exclusively and sometimes we offer it as an alternative payment option. Either way, we rely on them quite heavily as I’m sure a lot of businesses do.

Keep in mind while reading all of this that yesterday was my birthday and the whole experience was that much worse because it was supposed to be a relaxing and happy day. It’s also no secret that PayPal has been in the process of upgrading their site the past few weeks so there’s clearly a possible explanation for any unexpected errors.

Here we go:

For the SportsLizard Price Guide we use PayPal to manage the subscriptions (free for the first 7 days and $4.99/month thereafter). We have hundreds of paying subscribers, so every morning my inbox is flooded with You have received a subscription payment emails from PayPal. Thursday morning there were no such emails. Odd. So I went into my PayPal account to investigate. Without sifting through all of our users, I was able to quickly identify five or six payments that should have been made that morning. For those who don’t know – when a user signs up for a PayPal subscription they are automatically billed on payment days and the money is withdrawn from their account.

So I did what anyone else would do. I contacted customer service. Thursday night (8/30) around 10 PM I submitted a request for PayPal to look into the subscriptions. I included several specific subscription numbers for them to investigate. Here’s what I got back at 10:58 PM.

Dear Adam McFarland,

Hello, my name is Ronda and I am happy to assist you with your questions regarding the issues you are experiencing with your subscription payments that you receive.

After further review of your account, I can see that you have received subscription payments for Aug. 30, 2007 however, 5 payments have been cancelled. It looks like 4 were cancelled by the buyer and one was cancelled by you.

Usually there is a problem with a subscription because a payment fails.
Failures may occur for a variety of reasons. For example, a payment may fail because of insufficient funds.

If a payment fails, either the subscription can be canceled or the payment can be reattempted. If the Subscription Terms call for reattempts, payments are reattempted three days after the failure date. If it fails a second time, we will try once more five days later. If it fails on this last attempt, the subscription is canceled.

Note: eChecks are automatically re-presented only once and three days after we notify the user that it failed due to insufficient funds.

To avoid overlapping payments, reattempts do not occur if another payment for the same subscription is scheduled within 14 days of the failed payment.

A notification email is sent to you and your subscriber if a payment fails.

I understand your frustration regarding this matter and apologize for any inconvenience it might have caused you.

Sincerely,
Ronda
PayPal Community Support
PayPal, an eBay Company

Yes, there were several subscriptions cancelled.  No, I did not receive any payments from those subscriptions (if they are cancelled, they aren’t billed…duh). But there are also several ACTIVE subscriptions that were not cancelled and should have been billed. When the next day began (8/31) and there were more missing payments, I replied with the following:

Hi,

Thanks for replying. Please investigate these subscriptions that are NOT cancelled. All were supposed to be paid either yesterday or today, and have not been. Please let me know when these payments will be deposited.

{SUBSCRIPTION #’s HERE}

All of these are ACTIVE and say “Next Payment Date: Aug. 30, 2007”. Or “Next Payment Date: Aug. 31, 2007”

Thanks,

Adam

At this point I was so stressed that I had to pick up the phone and call. Why did PayPal all of a sudden stop charging my customers? Everything had been working fine since we launched in May! We haven’t touched the source code in well over a month.

At 10:39 AM on 8/31 I picked up the phone and began what would be a 20:12 call. The service rep was a nice guy and I tried not to be too mean to him (after all it’s not his fault). However, it took him an inordinate amount of time to understand the problem. Finally, I walked him through a subscription. I gave him the S# and also the customer email address.

I said, “take a look at the ‘Next Payment Date’ on the subscription”.

He replied “it looks fine – the next payment is due on August 30th…would you like to change that?”

“You do realize that August 30th was YESTERDAY don’t you?”

At this point he recognized the problem (probably 18 minutes into the 20 minute call). He then told me that there could be an issue with that particular customers credit card or account and that’s why he wasn’t charged.

“But I also have a list of at least 10 more customers that this happened to yesterday…and I have hundreds of other subscribers and have never had this problem before yesterday,” I replied. Not to mention, I also receive a ‘Subscription Payment Failed’ email whenever a payment does not go through.

At this point he was clueless. I asked if I could give him a list of subscription numbers to look into, and if he could assure me that the customers would be billed if in fact it turned out that they should have been.  He gave me no such assurance – he told me to hang up and email in the list. Which I did (I literally copied and pasted the previous email).

Then I received this extremely unhelpful reply at 11:26 AM yesterday.

Dear Adam McFarland,

Thank you for contacting PayPal.

Hello my name is Joseph, I am sorry to hear about the situation regarding the status of your subscription payments, and understand your frustration and concern over this issue. I am happy to assist you with your questions.

To find the current status of your Subscription and Recurring Payments, please follow these steps:….

And the rest of the email proceeded to tell me how to check the status of my subscriptions. Never mind I mentioned in the email that all of the subscriptions were active and should have been billed yesterday.

I replied at 12:05 AM:

Hi,

I have called and emailed several times and still have not gotten my question answered. I know how to check the status of the subscriptions!

All of the following are ACTIVE and should have been paid yesterday or today. Please investigate and let me know why they were not, and when they will be deposited. Considering that they are NOT cancelled and say “Next Payment Date: Aug 30, 2007” which was YESTERDAY, I’d say that there is a problem on your end and it would be nice if you acknowledged that.

Here’s the list again:

{SUBSCRIPTION #’s HERE}

Adam

I was pretty upset (as you can tell from my tone in that email). I decided to drop it and go out for my birthday lunch with my cousin Alaina.

After returning, nothing had been solved so I picked up the phone again. This time I was determined to not get off until I got an answer. The call was made at 2:33 PM and lasted 44:33.

Again, the operator was very friendly but had trouble understanding the problem. I spent at least the first 20 minutes explaining how PayPal subscriptions work (she kept telling me that I didn’t invoice the customer and they probably hadn’t had a chance to pay yet). This was pretty frustrating. The idea of a PayPal subscription is not that complex and everyone in the company should understand that the consumer is auto-billed and the money removed from their account per the terms of the subscription.

Once she grasped that concept, I told her that I had a list of examples and asked if she would walk through each one with me. I showed her the same example as I did the previous operator and we went through the same banter as before.

Her: “it could just be a problem with this account, you should email that customer.”

Me: “But I have a whole list that this is happening to? And besides, I get an email when a subscription payment fails and I didn’t get any emails in this case.”

She tried to get me off the phone without a resolution. I said I needed to speak to a manager. That took about 10 minutes. Finally she returned and told me “there have been reports that other people are experiencing the same problem. Our programming team is aware of it and is working on a solution”. I pressed for more information – specifically whether or not they would be billing the missed subscriptions for me – but she didn’t have any answers. I thanked her for the help and hung up.

At approximately 3:15 PM, after wasting my entire day I FINALLY got an answer. Here’s what gets me: I understand that the majority of calls are questions that can be answered with cookie cutter replies and FAQs, but what if someone actually has a REAL PROBLEM to report? It doesn’t feel good to have rep after rep not believe you and not understand the problem even when you can show them the evidence.

And then to add salt to the wound. At 3:43 (a half hour after the rep on the phone admitted to the problem) I received this golden nugget:

Dear Adam McFarland,

Thank you for contacting PayPal. I apologize for the delay in responding to your inquiry. I understand how important this is to you, I have full attention on your account now and I will be glad to help you.

As per request, I have checked your PayPal account and I do not show here any active subscriptions at all. Actually Mr. McFarland, your list doesn’t match the cancelled subscriptions on your account.

Umm. Yes, that’s because my list was for ACTIVE subscriptions, of which there are HUNDREDS on my account. On top of that, you just admitted to me over the phone that there was an issue! Shouldn’t all of your reps know about the problem?

Now it is Saturday 9/1 and I missed another day of payments. The subscriptions in my account all look like this one (screenshot taken around 10 AM on 9/1):

PayPal Subscription

It doesn’t take a rocket scientist to figure out that August 30th is in the past. Yet it was like pulling teeth with PayPal just to get an admission of the problem. Still though, I haven’t heard back from them about what they are going to do. There’s no assurance that they will back-bill my customers. No assurance as to when my customers will begin being billed again.  I’m completely left hung out to dry.

If they don’t back-bill my customers, shouldn’t PayPal reimburse that money? I don’t think that I should have to contact each customer and manually bill them. That will tick them off, and they did nothing wrong. It’s unfortunate that PayPal doesn’t post issues like this somewhere on their site to control the damage.

The sad thing is – I still like PayPal overall. I want to continue to do business with them because I think they are the best option for our company in many cases. Sometime in the next few days I’ll do a post on how PayPal and other companies should handle their customer service, although in this case it seems pretty obvious. I personally answer 20+ customer service questions for our sites on a daily basis, and I’d say that PayPal broke every single golden rule (other than being polite…the reps were always very polite).  I wonder what the people over at The PayPal Blog would think about this?

Whew. What a horrible situation.  I’ll never forget this birthday.

56 comments on PayPal – The Worst Customer Service Experience of My Life

  1. Gary says:

    I thought it was just me! My subscriptions stopped being collected on Thursday, but I didn’t phone them until this morning and had the same trouble with getting them to understand the problem. I hung up entirely unconvinced they were going to do anything about it. I hope they resolve this problem soon as it is killing my business.

  2. Adam McFarland says:

    I’m so happy to see someone else actually admit to having the problem (part of me still feared it was just me). Let’s hope for a resolution soon.

    I still find it amazing that PayPal doesn’t take care of their customers better!

  3. Kristian says:

    Thanks very much for posting this.. Save me MANY hours of calling myself 😉

    And yes i’ve had the same problem and hoping it will be fixed ASAP!

  4. Rashad says:

    This is absolutely rediculous!! Thanks for being so descriptive of the problem.. Like Kristian, it saved me alotta pain and headaches. I thought it was just me.. I only started these subscriptions last month, and I was thinking “What TIME do the payments actually come out? Midnight??” This is some good info. I’ll post another reply after I call paypal.

  5. Rashad says:

    To anyone reading:

    I just got off the phone with a young lady by the name of “Jennifer” (from the Paypal Business Account Dept.) She informed me that Paypal is aware that there’s an issue, and that the ETA is Sept. 5. ALL missed subscriptions will be BACKBILLED and will continue as scheduled thereafter. I would like to encourage you guys to digg this entry:

    http://digg.com/tech_news/Massive_Disruption_Of_PayPal_s_Subscriptions_Service

    Also visit this site for updates on the issue:

    https://www.paypaldeveloper.com/blog/article?blog.id=mts_updates&message.id=128

    Hope some of this helps you guys…

    -Rashad

  6. Adam says:

    Hi Adam,

    I haven’t received any subscription payments on my site since Thursday either. After waiting a few days, then finally sent Paypal an inquiry into what the problem. I later figured it couldn’t be just me so I’m glad to see that it isn’t.

    I’m surprised that a company as big as Paypal would have such a big customer service issue and you would think they would be more public about the issues they are having. Anyway, here’s hoping that pressure from folks like us will speed up their recovery process.

    -Adam

  7. This is getting beyond ridiculous. Not only the lack of payments, but how much research I had to do to even find out if it was a global problem. And of course, the fact that this is a holiday weekend and nobody gives a rat’s arse about the problem is just icing on the cake. We can’t pay our employees, or our beginning of the month bills because of this because 99.5% of our incoming funds for our business are via paypal, with the bulk of our income coming on the first of the month!

    What I want to know is why this isn’t getting any press beyond the blogosphere. This is a VERY serious issue.

  8. […] is now day 4 of the PayPal Subscription disaster that has been crippling small businesses all over the world. When I wrote that post yesterday I […]

  9. Adam McFarland says:

    Amie,

    I agree that this is a very serious issue, and it baffles me that it’s not getting more attention…or that it didn’t get more attention until the last 24 hours. PayPal has some SERIOUS explaining to do.

    Adam

  10. LinkXL says:

    PayPal has put out official word on this at their blog: http://www.thepaypalblog.com/weblog/2007/09/update-on-subsc.html

    I would like to see them put a notice on their main website so their customers don’t waste time trying to figure out why subscriptions are not working.

  11. Adam McFarland says:

    I agree completely – how many average customers read that blog? I had to hunt for it myself after I talked to the customer service rep.

    On a side note, around 9 PM EST last night, MY SUBSCRIPTIONS CAME THROUGH! Thankfully it looks like this fiasco is over!!!!!!

  12. […] customers from Thursday until this morning, and normalcy has returned to my world. Thankfully this fiasco is […]

  13. LinkXL says:

    The subs came through but it looks like the ones that came in late will continue to come in late each month based on some of the next payment dates.

  14. Adam McFarland says:

    LinXL – you are right. I didn’t even think to check that. Seems kind of unfair…I mean 4 days isn’t a huge deal, but that’s 4 days that we don’t get paid because of a PayPal mistake.

    I really do think they’ve got some serious damage control to do here if they want to win all of us back.

  15. We hadn’t noticed this phenomenon… but now we’ll be looking for it, that’s for sure. We have thousands of subscribers so it would be a pretty horrible thing if Sentry, the membership management / login password system / PayPal Subscriptions IPN handler suddenly stopped getting paid.

    Sentrylogin.com Staff

  16. […] notify its users of the problem, causing frustration and panic on the part of store owners. Here’s an account of one merchant who spent almost three days trying to get an answer as to wh… It wasn’t until September 1st that store owners were notified of the issue, and a notice was […]

  17. dean says:

    even from a personal point of view the customer service is dissgusting. I had a payment issue and they have locked my account it will aparrently take a week to get it unlocked.

  18. BJN says:

    I don’t understand. This support strategy by PayPal (and ebay) is intentional. They build in roadblocks and you have to be incredibly persistent to be heard at any meaningful level. Yet you “like” PayPal?

    Their system now has an “error” that won’t let me substitute a registered credit card account for direct checking withdrawal when I use PayPal for payments. I get a “try again” link and it fails over and over. Am I too cynical if I think this malfunction is intentional since PayPal makes the most money with the direct withdrawal method? I think not.

    You kept your cool amazingly well considering.

  19. Adam McFarland says:

    BJN,

    I’m sorry to hear about your situation. I “like” PayPal not for their customer service (believe me, I despise their customer service and hope I never have to call them again), but for what they do for small businesses.

    Countless people make a living off of eBay because of PayPal. PayPal has opened up doors online that might otherwise be closed. It’s easy to say that someone else would have done what PayPal did, but to date no one offers the breadth of services that they do…and there’s no guarantee that another company would do better with customer service. We personally have horror stories with other merchant services that were worse than this one, and at the end of the day PayPal has opened a lot of doors for our business and I’m thankful for that.

  20. Don Sturgill says:

    I am sitting here, with the phone on “speaker” as I type this. I have been waiting for over an hour for someone to just pick up the PayPal customer service phone…and listening to the same recording over and over and over.

    Here is the deal: PayPal doesn’t have to worry about customer service. They have plenty of business. Sad, but true. It’s like the signs in the post office that says “the customer is our first priority.” Yeah, right.

  21. Adam McFarland says:

    I’m not going to argue with that at all Don. From their perspective, they’re probably more profitable if they throw up some FAQ’s that cover 98% of the issues and basically screw over the other 2% as opposed to investing in training and education to service a small portion of the customer base. Not saying it’s right by any means, just the way it probably is.

  22. Alan says:

    Is anyone else having ALL their subscriptions failed with “subscription payment failed”?

    Every single on of my subscriptions have failed since about a week ago.

  23. Adam McFarland says:

    Alan, I have not. I think you should call PayPal. I’d say about 20% of my subscription payments fail on a regular basis just because of issues with the customers accounts, but if ALL of them are failing when they never have in the past than something might be wrong and you should do the best you can to try to get someone on the phone that can help you.

  24. Alan says:

    Strange. I have been on hold with paypal now for 1 hour 45 minutes. The tech support person so far has told me “maybe all your subscriptions expired”, “maybe all their credit cards expired”, and a whole host of other “maybe” answers.

    “Maybe” they should actually investigate why the payments are failing, not just making excuses and answering with general pre-canned answers. Every single subscription payment has failed since December 12th. I actually said that to her, she put me on hold, and I have now been on hold (this time) for about 55 minutes. Ugh.

  25. Adam McFarland says:

    Wow, that is ridiculous, but obviously not 100% surprising based upon my experiences. Just keep calling and making as much noise as you can…hopefully it will escalate to a manager and someone will be able to help you.

  26. Alan says:

    ok. 2 hours+ on hold and they cut me off.

  27. MIke says:

    Hi, this is ridiculous. This is the second time I have to deal with these jokers. I think we all have to send emails direct to the president so he can straighten up everything.

    The customer service is crap. They know nothing about their the service.

    I call them, he tells me to hold 5 times! Ridiculous! If you don’t know what’s going on then just admit it and pass it on to someone else!!!

    I ask for supervisor, says, they are all busy busy busy… I tell him are you kidding me? He says again sorry sir call us back 20 mins now.. WHAT THE HELL? I call you back in 20 minutes? Garbage! After waiting more than 30 minutes, they want me to call them back?!

    Adam, I think you are right, I will keep calling and calling. I will make it so I call them at least 5 times a day!

    If you want to do business, at least be honest to your customers. Man.. ok I have to call again now. LoL

  28. Adam McFarland says:

    Good luck Mike. That’s all you can do. Keep calling, keep complaining, eventually someone will listen.

  29. Ivette says:

    When I was reading what you wrote I felt like it was my case. Pay pal did the same to me with a different business. Pay pal take from my account money to refund to the buyers three times. Because Pay pal gave the reason to them. But in these three cases they never returned the merchandise to me. I wrote many letters, I called many times. Pay pal never response my request, they never understand my request. I lost this money and the merchandise too. Pay pal it’s a nightmare. I don’t know how I was with Pay pal for three years. They still collection to me, without any reason. ?
    I don’t know what to do. I lost too much money with them and I can’t reclaim. To whom I would claim?

  30. Adam McFarland says:

    Ivette,

    I’ve had that problem too (but to a lesser extent). EVERY time there is a discrepancy they have sided with the buyer despite the evidence I give to show the buyer is clearly in the wrong. In our case it’s a digital subscription so I can just cut them off, but that is absolutely horrible if you shipped physical goods and did not get them back.

    Honestly, if I was you I might consider moving to another company. Everything I’ve experienced has shown me that PayPal will side with the consumer the majority of the time unfortunately. If that’s hurting your biz, I’d look for a company with a track record of siding with businesses.

    Good luck and Happy New Year!

  31. Matt says:

    I really know where you are coming from. Its seems also that PayPal has contracted out to overseas call centers in the Phillipines and they are not training them really at all.

    I am still waiting for my replacement paypal debit card and i reported it lost on Jan 20th, and it is now Feb 21st. Hows that for a bag of smashed apples?!

    they said they were delayed in mailing out replacement cards and my new card was send out 6 days late even though they sent me an email saying it went out the next day and to wait 1-2 weeks. not they are saying it went out on the 30th and should be there in 2-4 weeks. excuse me?! 1 month to wait for a plastic card to be mailed to me?

    Something really has to be done about paypal. I think they may not be doing as good as people think. I think Google Checkout has maybe taken a little bit of their cake and now they are cutting corners to save money which is in turn resulting in bad customer service from a training stand point.

    I am unhappy with PayPal

  32. Tony says:

    Yes, actually, I think I may know of the situation you are talking about.

    I have hundreds of subscribers too and last year once or twice there was a delay like you are mentioning, where no subscriptions were paid and were delayed a couple days..

    It eventually caught up.. I never called them about it.. I was just assuming they had a problem and they would show up, but I was getting concerned..

    If it would have went another day, I would have probably called them..

    Sincerely
    Tony

  33. Ruth says:

    I just found Paypal to have the worst customer support in recent history of all the financial institutions I have phoned. Utterly useless. they finally gave me a technical support 800 number and it took me back to the same awful support menu I began with. I am trying to understand how to download my transactions into Quicken but it is hopeless.

  34. Andy says:

    Paypal are a killer, but unfortunately both buyer and seller are generally forced to transact via them due to their market presents. We moved our subscription payments for http://www.betgizmo.com from Paypal to WorldPay.

    WorldPay have a fantastic service and are a proper bank, but because a buyer does not see “paypal” they are scared to transact.

    Dammed id you do – dammed if you don’t.

  35. Andy Polaine says:

    They are awful. I had a similar PayPal customer service nightmare that went around and around in e-mails for weeks: http://www.polaine.com/playpen/2008/01/25/paypal-a-customer-service-nightmare/

  36. […] PayPal – The Worst Customer Service Experience of My Life […]

  37. hey !!
    its very reasonable point of view.
    Nice post.
    realy gj

    thank you 😉

  38. MIKE SPANO says:

    PAY PAL AND EBAY BY FAR THE WORSTTTTTTTTTTTTTT SERVICE EVER EXPERIENCED IN MY LIFE. HANDS DOWN.!

  39. […] largest commented blog post was when PayPal subscriptions went down, mostly because I was the first to jump on the story and other people found it through search.  […]

  40. Paypal are absolutely awful and their customer services is shocking. All about the money, they dont care and wont help when their customer need their help, no support whatsoever

  41. dyoge says:

    PAYPAL IS THE WORST COMPANY YOU CAN EVER DEAL WITH. THE CUSTOMER SERVICE SUCKS. Does anyone know of any alternative company to be used while sending or receving payments on web

    • Adam McFarland says:

      Dyoge – you can try Google Checkout. Never used it personally, but in most cases I think it works well based on what I’ve heard.

  42. Ed says:

    Pay pal is the worst!!!

    Ive been trying to fix a minor problem for six hours now! :]

  43. J says:

    I’m on hold with Paypal. I’ve been contacting them for two weeks now – they just transfer me around and around to their automated system (which… sucks). I had to finally let loose and refuse to be transferred. After explaining my situation at least eight times already… I’ve lost my cool. They can’t figure things out over there. I’d be VERY scared for them to hold ANY of my financial information. I don’t use them anymore.

  44. Eduardo says:

    I agree with most of you.
    Paypal is the worst of the worst.
    Theis customer service is the worst ever you can experience.
    Their email replies are made by a robot, with no sense at all, nor answer to your problems.
    Most of the problems experienced are simply created by Paypal itself.
    You think it is bad luck or a stupid mistake what it is happening with you and Paypal. None of it. They are intentionally bothering you and treating you like an person out of the law.
    They always talk about security reasons as the justification to hit you
    one and another one time.
    The problem is that you did not take precautions nor security actions against them, so the hit you as they like. They hit you with the non sense of the comunications, and also taking your money.
    At the end the conclusion is that Paypal are out of the law, making what ever they like because they are leading the market comming close to be a monopoly in the internet deals.
    Recommendation: Never ever have a dollar in your Paypal account of you will lose it sooner or later.

  45. Tom says:

    I’ve recently set up PayPal on one of my sites to process credit card payments and I have been utterly dismayed at how poor PayPal is. I gave up emailing and calling for help because I never got any meaningful responses. This meant that I had to rely on their online help centre which is a joke – for example, go to help and type in something like ‘mircopayments’. This is a product offered by PayPal for which not a single help entry exists! And if you’re logged in, and then do a help search it logs you out. The whole PayPal system has been organically cobbled together over the years – it’s now a fragmented heap of unusable sh*te. The whole thing needs to be rebuilt.

    For what it’s worth, Google Checkout is much easier to work with. The only reason I used PayPal for this product was because PayPal offers more currency options. Bring on the day when a better, simpler alternative exists so we don’t have to suffer PayPal’s terrible service and woeful usability.

  46. Meira Svirsky says:

    I am having a terrible problem with PayPal and their “Customer Service.” How did you get a phone number to even talk to them? I live outside of the U.S. and they give me a phone number that doesn’t work.

    • Adam McFarland says:

      Hi Meira –

      Sorry to hear about your experience. This post is from September of 2007 so I don’t quite remember where I found a phone number in that instance.

      I did however just take a look at their site and was able to find a phone number within a few clicks. I clicked “Contact Us” in the footer, followed by “Call Us” and was presented with a 1-800 number. It may be slightly different outside the US but hopefully it’s just as easy.

      Best of luck to you!

      Adam

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  48. Taz says:

    paypal has awful custumer service, they dont know how to btalk to people

  49. Taz says:

    paypal are theifs i got scammed and paypal took the other thiefs side. I had all the proofs but they took his side. It was a company called pamtaw and its about get paid to drive wrapped cars.

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