What’s up with PayPal and eBay? Or, Beware eBay Gift Certificate Redemption Policies

Can somebody explain to me what I’m missing here?

Daughter is always finding something she wants on eBay that she can’t get elsewhere, so last year when her thoughtful uncle asked for a birthday present idea, I was ready: an eBay gift certificate.

It seemed  simple and straightforward enough. Wrong.

First, since Daughter didn’t have an eBay account of her own, we used mine. But when we tried  entering the redemption number for the $25.00 certificate  at checkout, because the email to which the certificate was sent (Daughter’s) didn’t match the eBay account holder’s (mine), it was rejected.

So we set Daughter up with an eBay account. No sweat.

Then she wanted something that cost more than $25.00. I tried to pay the difference from my PayPal, but that wouldn’t work. The Paypal had to be in her name. So I set up a PayPal account with her name and email, and from my PayPal sent her $35. Total purchase price including shipping and handling was $54, so that means that there would be $6.00 more in Paypal than required.

No luck. Now PayPal wants a credit or debit card account information, and to use the eBay gift certificate, a PayPal account is required. Daughter doesn’t have a credit card.

Yes, I tried Customer Service at both sites. PayPal never responded. Ebay did, but didn’t address the problem, and when I took up their offer to contact them again if I had additional problems, I received no response.

Okay, so let’s try something else.

This time Daughter chooses a pair of stockings which, including shipping and handling, comes to about $5.00.

Remember, she has her own eBay account, an eBay certificate worth $25, her own PayPal account, and a PayPal balance of $35.

In other words, between the two of them, eBay and PayPal have $60 of her money, so they ought to let her use $5 of it without a hassle.

Wrong again.

PayPal still wants credit or debit info for “verification purposes.”

Okay, I give up. I gave PayPal the credit card info for an account we keep solely for internet purchases since last year we had to deactivate our ordinary credit card twice due to information leakages, likely on the internet.

Bingo! Daughter got to spend $5 of her money!

Now here’s the curious part: The credit card info that proved her ticket to success wasn’t, of course, for a card in her name. So what, I wonder, was PayPal able to verify by grabbing hold of that info it didn’t need?

You may say I should have looked into eBay’s policies before thinking a gift certificate was such a great idea.

Here’s what eBay says:

To use a gift certificate, gift card, or coupon for a purchase:

  • The seller needs to accept PayPal as a payment method.
  • You need to use PayPal to purchase the item within 10 days of the end of the listing.

You can use more than one gift certificate or gift card per purchase. However, you can use only one coupon per purchase.

Redeeming a gift certificate, gift card, or coupon

To redeem a gift certificate, gift card, or coupon, you’ll need to log into your PayPal account when you purchase the item. If you don’t have one, you’ll be given an opportunity to sign up.

Looking at the PayPal site’s Help Center, under Using PayPal with eBay: Gift Certificates, we find this:

  • Question: Why do I need to add a credit card or bank account in order to use my gift certificate?
  • Answer: For security purposes, you may be required to add a credit card or bank account to your PayPal account before you can redeem your gift certificate.

I’ve two problems with this answer.

  • In the context of my situation, how was PayPal or I made more secure by PayPal demanding personal financial information to release money I and my brother had given to them? Why do corporations, governments, etc. etc. think that those two words, “security purposes” justify all?
  • Why say “you may be required to add a credit card or bank account” when the truth is you will be required? Remember, there was $55 more than needed to cover the purchase available in the PayPal/eBay account. Tell me, if this situation didn’t fall into the category of no credit card or bank account required, what would?

Something stinks here.


33 thoughts on “What’s up with PayPal and eBay? Or, Beware eBay Gift Certificate Redemption Policies”

  1. eBay has a monopoly. So nickle and dimeing customers out of small gift card balances, by using funds from a larger gift card instead of the card you’re trying to use up, is just another shitty practice we are powerless to change. FUCK eBay!

  2. I got a $500 ebay gift card as a gift, setup a paypal (did everything they asked to verify, cc, etc), then setup an ebay account just so I could spend it. Right on the front they have deals shown, one of which was a $100 Sears gift card for only $85, and I happen to like tools (go figure). So I got it. Im not sure if they dont like people buying gift cards, but now they wont let me get ANYTHING else with the remaining money. Its been two weeks, and anytime I go to checkout paypal, paypal credit (and ebay gift card as paypal is required) are grayed out. Do they realize that when you have an ebay gift card, thats YOUR money? I have no alerts on either account, it just wont let me check out. They treat everyone like criminals for using their sites as intended!

  3. After all I’ve read about this, I will never use eBay gift card or a certificate to buy anything. I will use my good old credit card, and if something goes south, I would just open a dispute with the credit card, affectionately known as a chargeback. You get your money back, end of story. Don’t even try to file anything with PayPal; go straight to your credit card. ‘Nuff said.

  4. Just bought a $400 card to order something off ebay. I have an ebay account and PayPal with bank and cards linked. I get the card isn’t working problem. I’ll keep trying and let you know. I’m all in for the action lawsuit

  5. sorry for the bad spellin havent finished my coffee,ebay needs to get there crap together or start losing buisness.

  6. I tried to make a purchase using bill me later and debit thru pay pal.ebay pay pal an bill later are the same.bill later wants to bait you in so you can make full purchase with them so with luck you will not pay in 6 months time, then you pay excessive charges in intrest.If you use bill later buy small items you can pay off quickly.Ive used ebay alot over the years and used to have good experirnces.they are not like yhey used to be.

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  10. Every time I’ve had a problem with eBay, they tell me to call PayPal. i call PayPal and guess what, they say call eBay. Been on this merry-go-round so many times both buying and selling that I’m ready to call it all quits and go entirely with Amazon!

  11. you just had to set up the pay pal account. then choose paypall as your payment option, then enter in the 13 digit code on the back into the redeem cupouns/ giftcards spot. It took me almost an hour to figure this out.

  12. Everyone, I believe it is time to get a lawyer involved. I work in a law office and will be inquiring about the issues. I myself have been doing business on eBay both as a seller and a buyer. I have loaded many Gift Cards in my PayPal account, and now keep getting a message that they cannot be used for the items. This has been going on for over a month. I have had to load GreenDot funds. eBay/PayPal obviously benefits more when you use new funds to pay for your items, instead of the Gift Cards which are actually Payables in their books and thereby, does not add anymore to their funds but instead takes monies from eBay/PayPal accounts for the debts they owe on those cards that they were paid for in advance. Does it make sense? I am a forensic accountant and I believe there is serious anomalies going on.

  13. I have an ebay gift card worth 25$ but when i try to pay with it, it says i have entered the code incorrectly but the card only has 9 numbers instead of 13. What can i do?

  14. I am having problems with Ebay too! I bought a giftcard, but I have no bank account, nor credit card! I just have my giftcard, why do i need the others?!? how can i redeem it if i have no credit card? I dont want to sign my parents up for pay pal! I just want to get rid of this stupid gift card! I bought something without even realizing that you need a credit card on file to even pay for it! Im so fusterated i just want to give my giftcard to the vender and tell them to ship it to me! beyond fusterating that something so easy must be so difficult! advice?

  15. I don’t know, Sandi and Anonymous. I doubt if it is possible when you consider that department stores will leave a balance of a few cents on an almost-used up gift card rather than hand over the pennies. I hope someone who knows for sure checks in; the problem is if they know how to get around these obstacles, they aren’t likely to read this post! So annoying!

  16. How do I get Pay Pal to send me the unspent money on my E Bay gift card?
    I tried to get a refund. Again they wanted a credit card to send my own money.

  17. Ah, whenever I dust off my anger at Paypal requiring a bank account “for verification” after $10000 and years worth of purchases…. I can always find others STILL PISSED at them for other reasons! I found this blog looking to see if Ebay Gift cards might be a way around Paypal. No such luck I see.

    I even have a final chapter… where I finally gave in and opened a Credit Union account just for Paypal. Put in a small amount of cash and NEVER let payment default to pulling from that account, until one fateful day when I thought I’d lower the balance. Well the Paypal debit attempt caused a “$5 minimum balance trigger” on the Credit Union account which caused the CU to not clear the paypal debit…and charge me $25 for the “overdraft”.

    In frustration I went up and closed the account. I figured Paypal would default to clearing the outstanding charge through my AMEX (on file with them for YEARS). Oh no, of course not ….they tried the bank AGAIN. Well thankfully there was no overdraft because the account was closed. BUT sure enough…Paypal “un-verified” my account !!!! Ok so let’s see…suddently after 10+ years, an AMEX on file, AND a bank account….I am “a security risk”.

    Yeah right, what I am is a risk to costing Paypal the 3% AMEX charges as well as the “no-bull-business” manner that AMEX defends it’s customers in disputes. Paypal wants your bank account…that’s the bottom line. No matter what they say this is for otherwise…it’s just a smoke screen.

    I’ve ceased using Ebay but admit that there are things I want from time to time. Many sellers are willing to arrange other payments and sell “off Ebay”. Sure that requires you have some trust in who you are dealing with because you won’t have the Ebay/Paypal protections. Truth be told…if the Ebayer doesn’t have a spanking clean 99% or better reputation you’re likely to end up with some “gotcha” at some point in time over your years of using EBay. Good Buyers & Sellers don’t need Ebay or Paypal. I’ve even put a $20 bill in an envelope and sent it to a guy in a Craigslist transaction half way across the country.


  18. Sandi — Thanks for writing. I’ve wondered if things might have gotten better in the past two years, but it seems not. What I’m waiting to see now is if GreenDot is going to prove a scam as well. I bought a card which I thought I could use to add money to a Paypal account, but instead discovered there are two nearly identically named cards, and the one I had bought was a sort of debit card I could use to get cash at a handful of ATMs for no additional fee. The card I had bought had to be registered online; then I was to receive the real one in the mail.It never came. So now I have cancelled the card and am supposed to get a refund — minus an unstated service fee (on top of course of the $4.95 I paid to be able to get a way to put $50 in Paypal without using online banking). Frankly, I’ll be surprised if I get a refund. Stay tuned.

  19. I had done business with Ebay over the years and didn’t have any problems. Then I started buying Ebay gift cards to make my purchases. I usually get an error message, try repeatedly to pay and end up putting it on my credit card. Could it be that Ebay sells the cards directly or to retailers and then does not want to redeem them so they can keep the money and force you to use another means of payment, like a bank that takes your deposits and then won’t let you make a withdrawal. When PayPal asked for my bank account info, I refused. No way. If this is all a scam, maybe it should be reported to the Federal Trade Commission. I don’t have these problems with Amazon. Once you load gift cards into the system, it tells you your balance, accepts payment and sends merchandise.

  20. I have an ebay account and the gift card works fine except that certain sellers use a payment method called Channel Advisor. This payment method won’t accept ebay gift cards, which is misleading because any time you try to “contact the seller” about an item ebay has “automatic answers” put in place to help answer “simple questions” so you don’t have to harass the buyer. However these automatic answers are…automatic and don’t take into account whether or not 3rd party payment methods work. So they will tell you a certain item can be used with a gift card when it actually can’t. Stay away from Channel Advisor sellers if you only have a gift card. Its really a shame because Channel Advisor is a charity organization…

  21. eBay and Paypal are a scam. It used to be legit but now they let Hong Kong sellers run rampant on the site knowing what they’re selling are knockoffs that may not work. eBay won’t remove them because they make millions of profit on them. It’s all BUYER BEWARE. So you enlist due diligence and buy from a seller with 100% positive feedback only to find out when you’re scammed later, that it was all phony feedback, made to install confidence. I reported a known Hong Kong scammer to eBay, over a year and a half ago. He’s STILL on there and I still have the PS3 controller knock off that doesn’t work. eBay told me they would refund my money if I sent it back to the seller. I to ld them, he’ll just sell it to someone else then and rip them off! It was also going to be the same amount for me to ship it back to him that I paid for the item. I refused, therefore no money back. Amazon is far more on the up and up. It’s a professional business. eBay and Paypal are like shopping on the wrong side of the tracks. And this is coming from someone who had an eBay business a few years ago. It was fine for awhile but then buyers were turning out to be phony too. What a headache! History will show that once you involve the human race, whatever it is, will eventually wind up FUBAR.

  22. I also received an Ebay gift card and can not use it. it is absolutely useless to me because I do not have a bank account. when I tried to set my credit card up to my paypal for the “security purposes” it was declined because the card is already linked to my husbands account. so now I have a $50 Ebay gift card that I can not use. thanks Ebay!

  23. This is probably the stupidest system I have ever seen. I still cant get it to work. I cant select paypal at checkout (second option) BECAUSE IT ISNT THERE

  24. I haven’t had any problems with Paypal or Ebay except for the scamming people that USE their services. I actually got scammed by an Ebay seller (Wolverine24 for anyone who reads this and may think about buying from him) and Paypal just gave me a full refund after only a few days. Although they usually make you wait at least 10-15 days, I’ve still never had a problem with them “scamming” me.

  25. Jay — if I understand you correctly, my mistake was assuming that the security purposes for which the card number was wanted related somehow to the customer’s security, not PayPal’s.

    Your interpretation makes more sense, if we are to see PayPal’s request as comparable to a hotel’s asking for a credit card, even if you already paid for the room when making the reservation through Orbitz, Expedia, etc. The hotel’s purpose is to cover itself in case the guest damages the room, orders room service & charges it to the room, etc. Then I assume the hotel passes those charges along to the guest. Fair enough.

    But in PayPal’s case, if their purpose is comparable to the hotel’s, does that mean if the PayPal balance doesn’t cover the purchase the credit card is charged? That’s fine too, if that is said up front, rather than just alluding to “security purposes.”

    Still, I don’t see why PayPal doesn’t allow the option that if the account balance doesn’t cover the purchase price, PayPal simply denies the purchase: transaction fails, make other arrangements. I believe that is how it originally worked, and thus when I tried to set up an account for my daughter to be able to use her gift certificate, I had a “New Coke,” moment, if you are old enough to remember when Coca-cola decided to change its formula and introduced a new coke that everyone hated.

  26. I still use PayPal. But they did not need to confirm anything. They just wanted a credit card number in case anything went wrong they could withdraw the money and not get stuck with money out of their pockets. PayPal is like a credit card company, they loan out the money for purchases but then immediately withdraw the money from your account/bank/credit card/etc. They just wanted a card on file in case anything went wrong, ’nuff said.

  27. I use to sell and buy on ebay. I fist give up as a seller and shortly after as a buyer. Now I spend my $500+ in monthly internet purchases on amazon, buy.com jr.com and so on mostly amazon. And giving amazon gift cards is way so easy to and hassle free. I will stay away from eBya. People always said ebay is full of scammers. Well thats true but it come from within the company ebay itself is a scam. ebay was a great place before it acquired paypal after the crocks from pp made their way to ebay all hell brake lose.

  28. They’re ‘crooks’. We can’t ever expect things to be fair or right. I’ve had few problems so far, but would never expect them to help me if things go wrong.

    Touch wood.

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