Semi-OT: PayPal not using my account balance

[smontanaro]

I suspect like many of us, I use PayPal as the source and destination of funds for this crazy bike habit. I'm happy to pay for the convenience when necessary, ponying up a percentage of stuff I sell on eBay, or (when my account balance isn't big enough) dinging me for the service charge on a friends/family payment which dips into my backing debit card. (I'd use my bank account, but it backs up my wife's PayPal account.)

A week or so, ago, with a zero balance, an Italvega frame popped up on eBay which I just had to have. Not wanting to dip into the back account, I asked Ellen to shoot me some cash from her PP account, which she did. Then I bought the frame. (Aside: it arrived yesterday, and is quite lovely.) However, it didn't use my now sufficient account balance to pay for it, it went through the debit card, which is supposed to be my backup funding source. I didn't recognize this at first.

I sold some other stuff on eBay, building up my balance a bit more, and bought a couple more small items. It eventually dawned on me that PayPal was never drawing on my account balance, always defaulting to my backup funding source. Now that I'm wise to the bug/scam/whatever, I check before making any payment. The default funding source seems to now always be my debit card, and I have to explicitly select payment from my account balance.

I called PayPal a couple days ago. The guy I spoke to couldn't explain why my account balance wasn't my default funding source, why this change happened in the first place, or how to put things right. I contacted PayPal through their website again last night, asking for them to have their bright back room peeps fix the problem. I've not yet heard back from that request.

I'm curious if other people have experienced this. Is this a bug, or some sneaky way for PayPal to extract fees from me? (If I send someone money via friends/family and it ignores my balance, I assume I get dinged for the 3% service charge even if I have plenty of money in my account.)

[cmbicycles]

That seems like a bug, or maybe the funds hadn't been processed by the system when you made your frame purchase (pics or it didn't happen). Your balance is the first choice by default as I understand it.

[smontanaro]

The money is really there, and I can spend it. If I explicitly select my PayPal balance as the funding source, the payment goes through just fine. Also, that first transfer, to cover the frame purchase was a f/f transfer from my wife's account. She has plenty of money in her account, as that's where AirBnB dumps the fees from the units in our building we rent that way.

[ColonelJLloyd]

Maybe it was a fluke. You could always open a free checking account with your bank for this purpose.

[smontanaro]

Interesting thought. I used to have another bank account backing it (again, because PayPal wouldn't allow our join checking account to back both of our PayPal accounts). The problem there was that to keep fees for that beast down, you had to carry a relatively large balance, and live with limits on the number of transactions per month. Also, given the current problem, I'd either have to continue to explicitly remember to select the correct funding source, or manually push funds from PayPal to my bank account.

It sounds like nobody else has experienced this problem. I was half expecting someone else to chime in with, "me too!" I will operate under the assumption that PayPal has a bug. Hopefully they can fix it easily.

[veggieburger]

If your PP balance is in US currency (for example) and you buy something listed in euros, it often won't make the conversion. In that situation it takes from your credit card by default.

[smontanaro]

Thanks for the tip, @veggieburger. In this particular case, all transactions suffering from this small curse were to other folks in the US.

[Ryun]

Ive run into this lately.
The option to use PP balance first seems to have gone away particularly when it would only cover part of it.

Thought I was the only one...

[smontanaro]

This problem continued to bite my on the backside. I wound up calling PayPal Support a couple times, and exchanging another few messages with them as a follow-on to the second phone call. Finally, this morning I got this:

We have found out that your account might have been affected by recent bug that emerged. We already have included your account to the list of the affected ones for fix and be prioritized.

So, if you find your PayPal account balance not being used to fund purchases when you are sure you have plenty of money in your account, check with PayPal to see if your account suffers from this bug.