/ Money

Why are we waiting so long for PayPal refunds?

PayPal Top Up card

Credit and prepaid card companies are dragging their heels when it comes to making refunds, and yet loading money from a current account onto a card is almost instant. What’s going on?

You can load a prepaid card (like PayPal’s Top Up card) with money from your current account instantly. Similarly, purchases made with your credit card hit your account almost immediately and start racking up interest pretty quickly.

And yet, if you decide to cancel a prepaid card or you get a refund on your credit card that puts your account into credit, some banks will offer to send you a cheque for the positive balance rather than pay it immediately into your current account. By the time you get the cheque in the post and find the time to cash it, at least a week has gone by.

And credit and prepaid cards don’t pay interest while they hold your money, so it’s in these companies’ interests to delay the payment for as long as possible.

We’re bored of waiting

We recently heard from a Which? member whose PayPal Top Up card was not renewed as the company had discontinued the service. Amazingly, she faces a wait of almost four weeks to get her money back.

PayPal’s terms and conditions state that if you choose to cancel your card, the balance will be paid either to the cardholder’s PayPal account or by cheque.

This can take up to 15 business days (i.e. three weeks, or even longer if there’s a royal wedding on). It can then take two to three working days to get the money out of your PayPal account and back into your bank.

So while a top-up payment from your bank to your PayPal card would have taken less than a day, a payment in the other direction can take the best part of a month. Huh?

Stop holding on to our cash!

PayPal’s official line is that the 15-day period is in place ‘to ensure that details of all transactions have been received’. To me, that’s not good enough.

And what’s worse, PayPal’s own website specifies that:

‘Claims relating to a card are not covered by the Financial Services Compensation Scheme. In the unlikely event that the Bank becomes insolvent and is unable to satisfy any claims made for the balance held on a card, the card will become valueless and unusable and the Cardholder may lose this money.’

So PayPal is holding your cash for almost four weeks, during which time your balance is unprotected and earning you no interest. In these days of instant payments, it is unacceptable for a bank to hold onto your cash for so long.

Of course, it’s not just banks – horror stories about trying to get overpayments back (from utility companies for example) are common. But which are the worst companies for dragging their heels in making repayments, and thereby making money out of their own inefficiency?

Atam Verdi says:
4 May 2011

I recently used e-bay to buy a toner cartridge for my business. Upon winning auction I was informed by Paypal that I needed to be verified (having had an account for years). So I submitted details of my Bank account and another credit card I have. The process of Verification took approximately one week to complete. When this was done – then Paypal – without any consultation issued an e-cheque. My Paypal account stated that the e-cheque will clear on 26th April. The auction was won on 12th April.

The money left my current account on 19th April. The payment was indeed then made by Paypal on the 26th.

So many questions are

1. why did I need to verify
2. what happened to my money between the 19th and 26th of April
3. why does it take almost two weeks to buy something from e-bay as there seems to be no other way of settling payments; and
4. have tried to contact Paypal twice I have not yet received one response.

This situation caused our business harm (our printer was out of action for a week) and it must be hurting e-bay.

There is a clear business opportunity here for someone to enter the market and provide some competition.

Mikhail says:
7 May 2011

e-cheques is worst possible way to pay online, they work exactly the same as normal cheques, practically as the direct debit is not instant e-cheques cannot be instant.

1. why did I need to verify

PayPal is an unlimited access to your credit cards and bank account, do you really want to give that access instantly to anyone who might have (legally/illegally) your bank account number or credit card number?

2. what happened to my money between the 19th and 26th of April

They sit in your bank account until they collected by PayPal.

3. why does it take almost two weeks to buy something from e-bay as there seems to be no other way of settling payments; and

Sellers on the eBay have many options available to them, PayPal is the most convenient.

4. have tried to contact Paypal twice I have not yet received one response.

Have you tried calling them?

Andy says:
9 May 2013

Totally agree. PayPal needs to sort its act out regarding moneytransfers, especially refunds. I recently bought a car on ebay, went to collect but it didn’t work and the seller agreed to refund. I checked PayPal and there has been a refund pending for 10 days now. I still haven’t got my money back and I haven’t got a car either. Will have to take other action.

Mikhail says:
7 May 2011

Why are we waiting so long for PayPal refunds?

Because making payments is a fully automated service and refunds are subject to T&C, regulations, etc. and in order to avoid abuse of the system they have to be properly monitored, as every case is different a lot of human resources are required. Recently, I contacted Nationwide about making claim under Section 75 of the Consumer Credit Act, I had to wait TWO weeks in order just to receive the claim form!

Sisir says:
9 May 2011

I used to have an account with paypal, I was victim of a fraudulant transaction. eventually when i was able to get a phone number it was a premimum number. At time i was waiting long time ( 60min or more) to get some one to answer. I never had all my money back from paypal. I have not renew my credit card with paypal again.

Starfisher says:
10 May 2011

I am a stay-at-home mom with a small online business that we use for extra cash in these lean times! I use Paypal routinely to accept payments. I opened a Paypal Prepaid Credit Card because the top-ups would be available the following day as opposed to 5 working days if I were to withdraw money to a bank account from Paypal. Sometimes I needed access to the monies fast and so it was deemed worth the extortionate price (something like £2 for every withdrawal, but anyway…)

At the very end of March 2011 I had almost £200 in my Paypal account which I topped up onto the Prepaid Card. I had heard nothing at all about any closure of the account, no e-mails, no letters, nothing; there were no warnings anywhere online and the transaction went through fine. A couple of days later I went to use the card in a restaurant to pay for my son’s birthday meal out, and was embarrassed to find it “DECLINED”. I tried to get money from a cash point nearby, but the cash point was broken, and in the end we had to borrow money from our dinner guests which kind of ruined the day :/

Imagine my surprise when I eventually got online to find the account “BLOCKED” (no further info available online at that time) even though the money was clearly displayed as existing within the account.

I rang up the high priced number and eventually got through to someone who told me that “because of RBS” all Paypal Prepaid Card Accounts had been closed and my monies would be unavailable to me for a “short period of time” while transfers were made.

I then emailed Paypal on 5th April, demanding further explanation and was sent the following information:

“The PayPal Top Up card has ended as a product on 31st march. This overrides any expiry date on your card. All cards are now blocked and any remaining balance will be returned to your PayPal account this process will take 15 business days. You will still be able to access your online account manager until the end of May 2011. If you require any assistance accessing your account online please contact PayPal directly using the details below…”

When I asked them how this could have occurred with no warning, explaining that I needed access to my money and would certainly not have topped up on the last day of March had I known, the reply was:

“I apologise if you did not receive our emails. We have sent out 3 separate notifications of this change, the first was sent in October 2010.

15 business days is the required time for any remaining funds to be transferred back to your paypal account and to have your PayPal Top Up Card account closed. This is clearly stated in our terms and conditions under the section of cancellation of the card.”

In fact, T&C’s seemed not cover this particular event (enforced cancellation of the card by the company as opposed to the client). But I didn’t feel there was anything much I could do, I did make a formal complaint (to which no reply was received) and then I just waited.

On the 18th April I checked my Paypal Top Up Card account. The balance was now zero, suggesting that the monies had finally been transferred back to my Paypal account. I duly checked this. The balance remained at zero. So I rang up again, spending more money for the pleasure of talking with them, at which point I was told that as well as taking 15 business days for the funds to leave the Paypal Top Up Card account, it would take an additional 15 business days for the money to *reappear* in the Paypal account!

At this point, I was losing it a little bit. Clearly, this went against what they had originally told me by email. It seemed in addition decidedly unreasonable. If it took 1 working day to move money from a Paypal account to a Prepaid card it surely could not take 15 working days to move it in the opposite direction. I could only assume that either Paypal or RBS – perhaps both – were doing this in order to milk the interest, especially as I had done a little sniffing around on online forums and had heard of other customers with very small balances whose monies had now been returned.

If I included the 3-5 working days that it took for a Paypal balance to be moved to a bank account, we were now talking up to 45 working days’ wait for me to have physical access to my own money. This was approaching two months real time and was completely unsatisfactory, particularly since I had never received any emails in warning in the first place, and never saw a single notice on the Paypal websites either.

I wrote an email explaining all this and pointing out that I had never even received acknowledgement of my formal complaint. I then got onto “Which” who were very helpful. Interestingly, a few days after my most recent email – and exactly 15 WORKING days into the month – my monies finally cleared into the Paypal account. I never actually had a reply and can only assume that either 1) the person on the phone had their facts wrong about it taking an additional 15 working days to process or 2) the person on the phone was correct, but after my complaints and threats to take it further to Financial Ombudsman and so on, Paypal pulled their socks up. Perhaps I’ll never know; I have never received any reply to my email.

I do think that Paypal seemed confused about what was happening and maybe even deliberately failed to make it clear that it was actually going to occur, there was nothing online that I could see at any point.

I would still like to hear something back from them; and given the extent of time that my monies were unavailable to me, some kind of compensation or interest would have been nice too. But really I’m just glad I got the money at all – I have lost all trust and faith in these online companies which don’t seem to be regulated in any way as strictly as “real” banks(!)

Well it is still our dear old rip-off Britain of course despite over 50 years of Which. This concept has its routes embedded within a former Prime Minister who took the intrinsic but hidden viewpoint that provided it was not directlly illegal the only thing that mattered in life is to make money and one should judge a persons success, abililty and general characteristics on that one parameter.

The economic gulf between the rich and poor grows wider every year, and while the need for Which Magazine has never been greater one must wonder how long it will be before the CA starts to test the quality of servant’s clothes and deals with accommodation law for Butlers & Footmen as we approach those marvellous Victorian Values we had during Dickensian times?

Finally, I wish the above was a flippant or satirical remark!

I share my PayPal experience in this video. They have their own and very unfair rules.


Hi Dave, thanks for posting your link – it would be good if you could explain a bit more about your situation in the comment boxes for those who don’t have time to click through and watch your video.

I am an avid Ebayer – In the last 600 purchases all done through Paypal – three have failed to complete – two by non delivery – one by the seller deciding the goods were damaged before sending – All three were refunded ‘instantly’ (within three days of reporting) to my paypal account – but I simply then used the credits to buy other items.

Jason says:
14 November 2012

I’ve used Paypal mostly without issue, but once I sold things for too much money and they started demanding mugshots and proof of identity, placing restrictions on my account until I provided that. I never provided it, and started using alternative methods of accepting payments instead. After a year, the restrictions were removed from my account.

I’ve never a had refund come through immediately when made with a debit card as the original funding source. It’s taken several days to re-appear in my bank account.

Clearly, this is one of the big ways Paypal make money. It may well be that they need to go through a more complex process to issue a refund, but does that give them the right to keep the interest from the money?

Jason says:
14 November 2012

We see this more and more in the world of software and online services. Companies make up their own unfair rules that basically give the consumer no rights, and rely on the fact that the consumer will agree to those rules. We agree because to disagree is not a choice, if we want to use the services or products offered! Any many occasions, there is no alternative. It’s like saying, here is your plane ticket. We can cancel your trip and take your money, whenever we f****** feel like it. Take it or leave it.

Maraj says:
9 June 2014

I recently cancelled my visa card on paypal since paypal services were not offered by my bank but then paypal made a deduction of US$1.99 before I cancelled my card, so I would like to know wether they will still refund me.

Andy says:
14 March 2015

Hi I sold an iPad on eBay via PayPal the buyer has now had the item and very happily been using for over a week now and I still can’t get access to the funds I find this a absolute joke!!!!!!

I paid refund to buyer trough paypal. Paid with cash card.Nationwide.
Paypal say that take 5/7 days for them to receive it my bank said that paypal get it immediately.soon I pay I check my bank account balance and they are gone straight away.
So I am inclined to believe Nationwide.
Am I right?

Still have the sneaky feeling that paypal and eBay are still together.
Theirs CS robotic replies are identical, same voices and same useless comments Their attitude is really take it or leave it.
They keep saying that when you pay a refund using cash card they have to wait
5/7 days to receive it.
Not true. They get it immediately.
And how come paypal know absolutely everything about your account on eBay? They know exactly how many hairs you have on your eBay a**e.
Why? Because they are still together.
Separate for tax and stock exchange raise reason,but still f ing siamese twins.

This comment was removed at the request of the user

Darrell says:
12 July 2016

What angers me is when I get a refund off an eBay seller and it takes over two days to get it back via PayPal! When I pay for something with PayPal , it takes payment straight away! 😡 It really sucks having to wait for money back👎

Fyger R says:
21 June 2019

Totally agree with many responses here, but there’s one point I’d add: it’s not just ebay, paypal or online transactions/distance selling where these sort of entirely illogical, unreasonable and frustrating delays occur – it’s the same using a card to pay for anything in most shops – I have become fed up with the practice in general and now try to buy anything except perishables with cash as most stores have a policy of refunding cash as cash thankfully!

Vicky Jacobs says:
28 January 2020

I bought some jeans from an ebay seller using paypal but they never arrived. The seller refunded me but after 2 days I am still waiting for the money to show in my account. It shows as pending but I can’t get at it which is infuriating as they took my payment quickly enough.