$2,500 paypal fine is real.
I literally just called Paypal.
The $2,500 fine is real. It has always been against their Acceptable Use Policy to get around the fees, but now they are adding the fine to make people take it seriously.
Sending payment for a service/purchase as a ‘gift’ is fraud. Which is illegal. Which is against their AUP. Sure it might not a big enough fraud for them to report, but if they catch you, they can: Suspend your account, keep you from using paypal in the future, can take legal action against you, and fine you the $2,500.00 USD, among other things.
If you want to verify this for yourself, call their customer service number and ask to speak to an agent. They will confirm it. It literally only took me less than ten minutes to check this.
Do not commit fraud!
Also, this means artists CANNOT request that a payment be sent as a gift. If you are worried about the fees, calculate how much you need to off-set them and increase your commission prices accordingly.
Right, but how are they going to catch you? You send someone a monetary gift, they send you a painting or some shit outside of paypal. Paypal has nothing to do with the transaction besides the money transfer. You get nothing in return over paypal. I don’t see how they could at all prove you were paying for a service. If you want to pay the fees and not take the tiniest risk of a fine, go ahead. I just don’t want people to panic over something they are unlikely to have to deal with.
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Paypal has nothing to do with the transaction besides the money transfer. You get nothing in return over paypal.”
That’s the problem. Paypal notices every transaction and it is their responsibility as part of their service to their users to ensure transactions are legally completed. The transaction isn’t their only service. They provide the means to label and ship the materials needed, which extends their ability to control the details of the transaction.
The first hint should be the fact they’re updating their TOS to combat this exploit to begin with. But if that’s not enough proof for you, I can actually put this into perspective using a personal experience from my wife.
A while back my wife did a commission for a fellow who was absolutely fantastic. Paid in full, never caused a problem, loved the piece, had perfect closure, and off they went.
Four months later, my wife is flagged for an incomplete transaction. The reason it was called incomplete is because Paypal did not in fact recognize the digital commission as proof of a completed service. Immediately, she brought together screencaps and visual and written proof that this commission had in fact been completed, paid for, and the piece received. She even got a hold of the customer to clarify if the flag was coming from them. They were as surprised as we were, because he hadn’t used Paypal for a while after that commission.
After submitting the report of proof, Paypal responded. The proof we sent, all of the visual and written confirmation? Invalid. Their wording on physical vs. digital services in the ToS is pretty specific, and as a result, shit like this can happen.
The flag wound up with us having funds pulled from my wife’s Paypal back to the original customer. He immediately returned the funds to us after Paypal closed the report, and we had to double and triple check every feature and option to ENSURE this would not be flagged again. After that, we started using invoices immediately because it is the only sure fire way that Paypal will no longer flag transactions that look illegal to them, and it proves without a doubt what is being paid for and received as the invoice functions like a contract.
This happens a lot more often than you think. If you wind up placing a physical address for a digital piece, Paypal expects you to click that Shipping label button to print and give a number confirmation to ensure that piece was indeed shipped. Otherwise, after a period of time, it is flagged as incomplete, and they check in to see who is getting cockblocked.
So trust me, it ain’t just a hullabaloo scare going around. Paypal is notorious for flagging accounts and forcibly removing funds where they do not receive proof of a completed transaction. As well as freezing your account in cases where you’re providing services they are strictly against (such as selling pornographic material).
futakuart