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Reselling & MS Follies: A Restricted Paypal Account & Error After Error! Here is How I Fixed It!

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paypal negative balance restriction

Paypal Negative Balance Restrictions & How to Remove

I know a lot of MSers and others in the hobby have issues with their Paypal accounts because of a certain reload instrument that is very tempting to purchase. Thankfully I have not had that problem, but today I ran into an issue that I know some of you who resell on eBay may encounter, so I thought I would share what happened.

Issuing a Refund

Recently I sold a product on eBay that was defective. The buyer contacted me and I agreed to issue a refund after the item was shipped. In the mean time I did a regular transfer of my Paypal balance a week or so ago and while there was money in the account, it was not enough to cover the refund. In fact, it was short by $3.10!

Of course my bank account is a backup funding source, so I didn’t think there would be a problem when I issued the refund. Unfortunately that wasn’t the case. The refund was given to the buyer, however my account balance became -$3.10. I actually found this out as I was purchasing an item on eBay and the system wouldn’t let me checkout.

Trying to Fix the Problem

So I logged into my Paypal account and it gave me several options to make the account right. I could mail in a check (7 days), I could load money from my bank account (3-5 days) or I could load money from a debit or credit card. (Instant!) So obviously I tried to go the instant route, except every time I tried to load, I would get an error saying that restricted accounts cannot perform that action?!?!?

If you have any amount of experience with Paypal, then you know they make no sense. I am restricted because my account is negative, yet I can’t load money because my account is restricted. Oh yes Paypal how I love thee!

The Solution

Thankfully I quickly thought of a solution after struggling with their website for about 15 minutes. Since Paypal members can send money to each other, I decided my wife would just send me enough to cover the negative balance. I was actually pleasantly surprised to see she had a balance, so I didn’t even have to pay the credit card fee. In two minutes the payment was sent, my account was back to the positive and the restriction was gone.

Takeaways for Resellers

If you are a reseller, there is a chance you will run into a similar situation. Here are some of my takeaways from this experience:

  • Always make sure you have enough money in the account before issuing a refund.
  • Your backup funding source won’t automatically be used to cover a negative balance. (Or at least it didn’t happen here.)
  • If you have a negative balance, your Paypal account will be restricted and you won’t be able to purchase items on eBay.
  • The easiest way to get rid of a negative balance if you are unable to do a debit load, is to have someone send you money. It should post instantly and get the restriction removed.
  • You can of course also buy Paypal My Cash cards and reload that way, but don’t do it too often or you risk another type of restriction.

Conclusion

This situation was just another (tiny) roadbump in the life of a reseller. The solution is definitely not revolutionary, but it is always good to remember the “peer payment” method when you need to get money into your Paypal account quickly. This is the first time I have had to issue a refund on eBay and I certainly hope it doesn’t happen again!

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

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Shawn Coomer
Shawn Coomerhttps://milestomemories.com/
Shawn Coomer earns and burns millions of miles/points per year circling the globe with his family. An expert at accumulating travel rewards, he founded Miles to Memories to help others achieve their travel goals for pennies on the dollar. Shawn also runs a million dollar reselling business, knows Vegas better than most and loves to spend his time at the 12 Disney parks across the world.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

10 COMMENTS

    • You can transfer money in from your bank account or have a friend or family member transfer you the money

  1. I buy PayPal reload card for MS purposes. Your last takeaway mentioned another type of restriction? Can you elaborate a bit please?

  2. Every time this has happened to me, I’ve had to call in and have the credit card processed manually. I’ve had some big negative balances (holds on returns for electronics). It is a pain.

    • I’m glad my wife had a balanced that covered my tiny overage. I’ll try to make sure not to go negative in the future. Of course you would think they would fix their systems to make it easier to fund!

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