There’s a surprise awaiting anyone who constantly transfers the entire bulk of their eBay takings from PayPal to their bank account. It goes something like this and, yes, it did happen to me!

I usually transfer money weekly from my PayPal account and I typically leave one hundred pounds or so to cover unforeseen costs, such as refunds, personal buys, and so on. As more of my products sell on eBay, my PayPal account normally builds up to several hundred pounds a few days after transferring the bulk to my bank account.

So I rarely have problems, until one day a customer decided to contact PayPal direct, telling them she could not download one of my eBooks, she considered the whole thing a scam, and she wanted a refund. PayPal’s response at the time was to freeze the appropriate amount in my account until I had chance to counter this lady’s claim. Incidentally I use the term ‘lady’ out of pure sarcasm here, because this was not a lady in the real sense of the word, this woman had not followed the instructions for downloading her book and out of pure nastiness she had decided to go straight to PayPal.

My reaction in cases like this is always to refund right away and remove the individual from my mailing list. So inside my PayPal account, confronted with the chance to respond to the woman’s claim or offer a refund, I hit the refund button and got back to working with nice buyers instead.

Basically, I knew I had insufficient money to refund from my PayPal account and in such cases PayPal would normally deduct the remainder from my credit card lodged at their site.

‘Normally’ I say because a few minutes later I received a snotty letter from PayPal telling me the additional payment had been refused by my credit card company.

Shock, horror, I was totally gob-smacked and very, very worried. Given it was just 5am in the morning, and because I knew I had plenty of credit left on my card, I imagined someone had made fraudulent use of my card and depleted my credit. Now I had a four hour wait until the bank opened and I could get my bank manager to check the reason my payment had failed.

It turned out there was a very valid reason my payment had not gone through, and it was actually designed to save me from credit card fraud.

As my manager explained, most banks have a system that alerts them to payments being demanded by companies direct, namely without the card holder individually authorising the payment. Once the alert is initiated, the company is checked out, and where automatic card payments are made on a regular basis to companies like eBay and PayPal the bank normally bypasses the alert. And that means PayPal would normally be allowed to withdraw that earlier refund deficit from my credit card.

But the problem was I had never used my credit card to fund payments through PayPal, not once in all the six years since I joined PayPal where it is mandatory for members to provide valid credit card details for automatic payments, in this case for topping up a refund payment.

The upshot was my bank refused payment because the request was out of the ordinary, having occurred just once in several years since I joined PayPal.

Two minutes later I phoned PayPal, relayed the facts, and gave them permission to debit my credit card for the remainder of the refund. I discovered this was a common problem for PayPal, who certainly felt no hostility to me or customers in similar situations. My bank manager, and PayPal staff, told me future similar problems could be averted if I occasionally make payment by card rather than direct from my PayPal account. This way there would never be a long gap between payments and my bank would not have to jump fast to protect me!

So there you go, a tiny problem, and an easy answer, and very little stress involved, except for people like me who actually like starting work before dawn!