Finance

Small businesses “cop abuse” after PayPal error takes double payments from accounts

Kirsten Robb /

PayPal is under fire for an error that saw the payment provider mistakenly double up on money taken from its customer’s accounts, with small businesses complaining they’ve “copped abuse” from their own clients over the blunder.

Many small business customers use the payment platform in the everyday running of their enterprise, along with micro-businesses that sell their wares through marketplaces such as eBay or Etsy.

PayPal yesterday told customers via a Facebook post an internal error had resulted in some customers being charged twice for purchases when they had only completed one transaction with their PayPal account.

“We understand the impact and concern this has caused and all customers affected will be reimbursed,” said PayPal in the statement.

“If you have been charged twice you do not need to contact us as the reversals of the duplicate payments are currently being processed and funds will be returned to affected accounts within 3 business days.”

Some customers lashed out at the slow turnaround, while other small and micro business owners complained about the effect the error had on their own client relationships, after receiving complaints from customers.

“Most people know about the issue before you announced it at 2pm today – eBay sellers found out after coping abuse from angry customers blaming them for your ‘error’,” said Facebook user Grant Weeden.

“PayPal should have been upfront about the issue immediately and should have contacted all concerned ASAP.”

User Michael Lindsey added: “eBay seller[s] get the blame what a mess I have customer cancelling orders and PayPal put these sales funds on hold we only got paid once.”

SmartCompany asked PayPal how many business customers were affected by the error but did not receive a response prior to publication.

Nicole Matejic, author of the upcoming book Social Media Rules of Engagement, told SmartCompany PayPal should have contacted its business customers before they heard about the problem from their clients.

“You need to be empathetic and have the conversation with your clients as soon as you realise and contact them—don’t wait for them to notice,” Matejic says.

“It’s very hard when a third party lets you down in a business context.”

Matejic, who uses PayPal herself within her small business, says the issue would inevitably create cash flow issues for some business customers.

“For business customers, they are funnelling a lot of money through PayPal and three days is a fairly long time to reverse a transaction and be without money,” she says.

Matejic says when a company is managing a crisis, it is important to feed as much information as possible, offer to remedy the situation anyway you can and take the conversation offline. She suggests PayPal should have set up a phone number for those in financial headship.

“This is a serious matter for lots of people who don’t have money floating around. People in financial hardship should have been offered immediate access to the funds,” she adds.

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Kirsten Robb

Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.

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