Rob & Melissa Stephenson from Flea Market Flipper talk about the time that PayPal held $25,000 from an eBay sale.
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When PayPal Held $25,000 From An eBay Sale
Rob: What's up, pro flippers? On today's episode, we're talking about the time that PayPal held $25,000 of ours after an eBay sale.
Rob: All right guys, so today we are talking about our largest flip to date and how once we flipped it, PayPal held $25,000 and said they were gonna hold it for 180 days.
Melissa: So, I just posted, we just posted a reel the other day and we've talked about this on the podcast, but I think it was a long time ago now 'cause I thought a lot of people had heard this story, but apparently people wanted a podcast about it, so we're like, all right, well let's just tell it again because it's kind of a fun story, not really going through it. It wasn't a fun story. Yeah. But kind of like some action steps we took and it might help you in the future and some things to help your account not get a red flag too, so.
Rob: That's right. But before we dive into it, I want to give you kind of the pre-story of how this thing laid out background. So this was for a transaction that we sold an item on eBay. This, at the time, was the largest amount of money that we put out for an investment, and it was the largest amount of money that we had ever made on an eBay sale.
Melissa: And can I add in, this was also right when we went full-time, this was right around the same time because you started investing a little bit more. And I remember you were like, well this is our full-time business now, so we gotta like go big or go home. Like you were really gungho.
Absolutely. So, you were investing a little bit more 'cause you really wanted to make this work, so. Absolutely. It was right, so this was about eight years ago now, al almost eight years ago.
Rob: So, so we bought a parking lot, security tower. This thing is on a trailer, so you pull it behind a vehicle, and then it folds down to the ground a little, like a guard shack.
You get into it on the ground and then you have controls inside of it that actually lifts it up about 25 feet in the air. This is what we bought. Like I said, we paid. $5,000 for it at a local auction. And at that time, that was the most we invested. Melissa was super nervous about it.
Melissa: I did not like it at all.
I was very much against it actually.
Rob: Absolutely. But I knew what the potential was. So I did my research before I actually spent $5,000 on it, and I found out that the retail on this, when it was manufactured, it was like $125,000 or $130,000 is what somebody originally paid for it when it was new. Now the thing was still in good shape.
It had a generator on it, had an air conditioner on it. All that stuff worked. Everything was fine on it. So that's what we ended up spending was, I don't remember exactly, but it was right, right around $5,000. Was it?
Melissa: Yeah, no, it was $5,000. And I was very, very nervous because we did not have like an extra $5,000 just lying around.
It was not.
Rob: It was a leap of faith. Trust me. It was a leap of faith to, faith to say, say that. It might have had some discussions to say the least. And it did start a definitely a little tension between Melissa and I because she didn't want me to do it, and I did it. And it was one of those things that I knew what the potential was.
Melissa: And I want to add too, that there's no comps on eBay with that thing. So there's not, you're looking at the retail price and that you do that on a, a couple of things I do that are more unique or different. You'll look at what, what is it retail for? Like the bus wash? There wasn't, I don't think there was any, there's no comps on that.
But if, you know, the retail is what, $50,000? What was it on the bus washer was $30,000. $30,000 to $40,000 I think. $30,000, $40,000. Yeah. Then asking $15,000, $14,000 was not a crazy amount.
Rob: So no, absolutely. And that's our thought process behind these type of of items. If somebody's gonna go and spend $125,000, $130,000 on it new, would they spend $30,000, $40,000, $50,000 for it used and still in good condition?
And the answer was absolutely. We listed this less than a month, sold it, and I didn't list it. I feel like I could have listed it for more, but at the time, this was a stretch. I mean, this was a huge transaction for us and I listed it for $30,000, had a guy within a couple weeks reach out and say hey, would you would, was it a month?
Yep. Hey, hey, would you take $25,000 for it? And I said, absolutely. We sold it for $25,000 . He used a credit card to purchase it through eBay. Well, it was through PayPal. So this was back when PayPal was the not managed payments. It was the processor for eBay, so it was the, the normal routine for him to pay through PayPal.
Right. As soon as PayPal saw that transaction come in, they held it, they held onto it. They said, okay, you are not, allowed to touch these funds for 180 days.
Melissa: Well, but before that, you see that it's held. You're like, okay, well it's a large transaction. That's not that abnormal for it to be held, to make sure it goes through and all that.
For a couple days. That's not, yeah, for a couple days. That's not a crazy thing to think about. Like they want to make sure that it's legit and all this, the credit card is good, it's not fraud or whatever. So that's understandable. But then you got on the phone with them?
Rob: They did, and they told me that they were gonna hold it for 180 days and then possibly for possibly longer, for an extra 180 days.
If they deemed that they wanted to hold it longer. Now that was crazy because the guy actually paid for it. Once the transaction came through, he actually sent a guy to pick this up. And he sent a driver down. They picked it up. Like I said, it was on a trailer. The driver picked it up, took it, he took it away.
Now I have something stating that, $25,000 was in my account, but it is gonna be held for 180 days. And that's all that I have. I don't have the item anymore. There's a title actually to the trailer. All that was signed over to the new owner. So just crazy, crazy situation, which at the time, remember we went out $5,000 for this, and that's a lot of money to go out for an investment and at the same time, $25,000 comes back, but we can't touch it.
So that was a very scary moment in our flipping history for sure.
Melissa: And you gotta, you are very good about getting on the phone. I did with people. You'd rather do that than try going through email or going through chat. They can't hear the passion in your voice. And you know, you always, obviously when you're talking to representatives, you start out polite, but then you have to be firm.
Absolutely. Like's a firmness in your voice. Like, this is not acceptable. You know, you can't do that. And then actually they tried to come back for you for an old account that you had for a thousand dollars. They held it and then they debited another thousand dollars from it for an account that wasn't, that was a joint account that you had, it wasn't even your account, right?
Rob: No, I, but this you're we're talking like 10 or 15 years ago.
Melissa: But prior that they should have contacted you like way before this, that they were trying to, anyways, so it was a little shady. There's some shady stuff going on. Very
Rob: shady. So all that stuff happened. You're right. They debited the account, I think it was a thousand or $1,500.
On top of that, they did that first and then they held the rest of the funds and said, we're not gonna release it for this long. So I got on the phone with PayPal and PayPal, I got as high as I could with a supervisor. They're like, yeah, sorry. We can't do anything about this. If the guy comes back and says he's got up to six months to actually dispute this. And I was like, the guy has the item, he can't dispute it. He has taken possession of it. There is an actual title for this item. He has, he's got the title transferred. I've signed it over so he can't come back and say he did not receive it, he can't dispute it, any of that stuff. So they said, yeah, sorry.
This is our normal procedure you have, this is all that we can do. So I messaged the guy who bought it and said, hey, by the way, I can't reach, receive these funds for 180 days, is what PayPal is telling me. And he told me that's crazy. And turns out he was a lawyer, which was very, very helpful at the time.
And he said, listen, I, I and I, first of my first, thought process was, hey, can we refund it back in through PayPal because they're saying it's a credit card transaction. Can I refund it back and have you do a wire transfer that they'll release the funds immediately? And he said, let me, let me see what I can do.
And then he, it boiled down to him saying, no, I wanted to be able to use my credit card to buy this. I don't know if it was points or something like that, that he was getting for the transaction, but he said he preferred to do that with the way that he did it. So he offered to get on the phone with myself and a supervisor at PayPal.
I thought he did, didn't he? He did. He offered to do that. So I got PayPal back on the phone and got to as high of a supervisor as I could. I, I, conferenced him in, into that call and he got on the phone with PayPal saying, I'm the person who bought it. I'm a lawyer, I'm happy, I'm a lawyer, and this is where I'm at.
I will not come back. I will sign a piece of paper, a notarized piece of paper stating that I will not come back after these funds. You need to release these funds for this gentleman so he can have access to the funds. PayPal said, yeah, sorry, we can't do that. We're not gonna do that. We're gonna hold it for 180 days and then after that we'll release some if redeem it is okay.
So that's what we were dealing with. And at the time it's like, okay, what do we do? We're up against the wall. We don't have the item. The guy was super, super nice to actually jump on and show his that he wasn't gonna come back after the money, just show his intention with the whole sale.
Melissa: But really he's done with it.
He has his thing. Like it's not his problem. No, it's our problem. But you know, we have to figure it out. He felt for us, he, yeah, he was a nice guy. And so the thing we did was go to the internet and try to find out what the heck can we do, so I remember there's a website called screwpaypal.com. I don't even know if it's still, I should check it if it's still even up. But that they gave us kind of the blueprint of what to do to get our funds back.
Rob: So, and they told us to go to our local congressman, file a, an official complaint with the congressman, which took us all of a couple minutes. Yeah. Really 15 minutes to go down to our local congress, congressman's office.
They had a, a standard form for a complaint. We filled out that complaint. Submitted it to them. I think they had to notarize it as well. Yeah, submitted it to them. It's like their header and stuff in their notary. Yeah. Within three days they had released all the funds back into our account. They released the money that they had pulled out of the account saying
Melissa: that extra thousand dollars that they tried to take.
Rob: Exactly. So they released all those funds back into our account and made them available to us. So immediately I transferred all the funds out of our account into our bank account, and we had access to the account. I mean had access to the funds within three days after filing that complaint. So, moral?
It's fun. Moral of the story is do not give up when something happens and you know that it's not the right thing. Don't give up 'cause a lot of people, like PayPal was banking on us walking away and saying, oh great, well we can't do anything. I can't touch this for eight 180 days. I can't do anything about it.
And they were gonna invest the money and make. Tons of money off of our $25,000, which that is not right. So when you know what's going on is not right, make sure you climb the ladder. Figure out there's other ways to figure it out. Exactly. Climb that ladder until you get to a solution that you know is a good solution.
So we didn't know if this was gonna work, but like Melissa said, a resource online told us, this was a step that you could take in the right direction. So we were up against the wall thinking, okay, well we have to do something. So we did it. We did it and filled it out, got the funds back within three days and PayPal released the funds.
Awesome. A great story for the whole thing.
Melissa: So I, I did want to go add too that one thing that happened, it was, it was the largest transaction we've ever done. So it threw a red flag for PayPal, which is fine. Like that's fine. It threw a red flag. It's a big transaction. We understand that.
But then the steps forward. Should have been like, we're gonna hold it for three to seven, whatever the standard time is to make sure, I mean, banks used to hold, if you could get a check, they would hold like the one that they did for two weeks. Yeah. And then they approved it, but they can verify the funds that are, or whatever, make sure that it's legit.
And then release your funds, which is what they should have done at the beginning. Yeah. But one thing to note, is if you do start to like, want to sell bigger items, we've talked about this before, higher profit before, higher, high, higher value items 'cause that's our business model. We love the high and it makes more sense.
Like you're going to be doing, you know, a lot less time if you can find, get those bigger items, but don't just start with them. Don't like, and only use those, like grow your account to where you won't get those red flags, because eBay will still flag you. If you are new to eBay and you sell something for $2,000, they're gonna be like, whoa, wait a minute.
What's going on here? So this is not normal, but if you gradually grow from, you know, doing $20 to $50 items to a couple hundred dollars to then a couple thousand, like it's not, we don't get flagged for our thousands of dollars of transaction because we do that on a regular basis.
Rob: Yeah. And right now we are getting flagged at $7,500. That's our, anything that goes over $7,500. eBay is, they hold it longer flagging it and they're holding it until,
Melissa: but they're not, they're not freezing your account? No. They're just, they're just holding.
Rob: Well, they're holding it until the buyer receives it and leaves good feedback. Or it's three days after the buyer, you can show proof that it was delivered to the buyer.
They signed for it, that kind of stuff.
Melissa: But they could freeze your account. Yeah. If you're, if you're having a lot of suspicious activity and you're not sold on eBay and all of a sudden now you're doing all these yeah, $25,000 transactions, you, you know, you just have to just be cautious and aware.
Rob: And it might not be suspicious activity.
Yeah. It might just be out of the normal activity. You're selling $20 items and all of a sudden you sell a $3,000 to $5,000 item. eBay might see that and go, okay, this is outta the norm. We have to look into this and see what's going on. We're gonna hold it till the item's delivered, or we're gonna freeze the account till we get some more information from you.
So just expect that, like Melissa said, and this is what we teach our students, you have to start off, you gotta crawl before you run, and this is the crawling portion of it. Slowly get into that transition of, okay, I'm selling $20 to $50 items, I need to jump it up to $200 to $500 items, and then once I get up to $200 to $500, Now I'm gonna go to $1,500 to $2,000.
So you can do that. But it is a slow transition. So eBay has the record. The record, and they have the confidence that you're doing what you're saying you're doing, you're building good feedback at the same time. So they're looking out for not only you but the buyer at the same time, but they're looking out for their platform.
They don't want shady people on the platform selling something, taking the money running 'cause back in the early days of eBay, it was the wild, wild West. You could do anything and there was nothing. That there was no repercussions on it. That's what they're trying to solve right now 'cause even the further we go along with eBay's platform, the more scams, the more crazy people are out there.
And eBay's just trying to alleviate that. I mean, they're trying to make that easier and easier platform for the buyers and the sellers. So you can't really fault them at it. You just have to be prepared. Yeah. When you're trying to scale and go to that next level, you have to understand how the process is gonna work.
Melissa: So, but if they do try to. You have that item and it's delivered and they're holding your funds or they're freezing them for an indefinite amount of time. Like they can't do that. No. You sold an item legit. Everything is, there's another way around it. True. Yeah. So you did your part, you what you said you're gonna do, and somebody can't just hold your funds for no reason.
So absolutely. That's our soapbox and we're gonna stick to. Awesome. So you guys, thanks so much for listening. This is a fun story, but hopefully you don't ever have to deal with it. Absolutely. We do have a fun challenge coming up that we're gonna, we want to help you make your first $250 from flipping.
So if you want to check it out, it's a free challenge, at the end of September. That's it. And you to learn2flip.com and go check it out.
Rob: Guys, check it out. We want to hang out with you for a couple days, teach you some awesome, awesome stuff in this flipping business.
Cannot wait to see you at that challenge. And thank you so much for jumping on here and spending some time with us today. We greatly appreciate your time, so have a wonderful day.