Terrible Customer Service and Amazing Customer Service All In The Same Morning

I use a terrific app called FreshBooks (affiliate link) for my company’s project time-tracking and invoicing. I’ve been using it since 2007 (which is around 30 years in web-years, right?) and in my mind they are the best in the business.

My clients receive their invoices via email and are able to pay them online through the merchant provider of my choice which is currently PayPal. I get charged the regular PayPal rate of 2.9% + $.30 per transaction for credit card payments. In addition, FreshBooks has a really nice option that utilizes PayPal “Business Payments” for clients in the USA. If clients pay their invoice online with a PayPal eCheck (i.e. direct from a bank account) or PayPal balance, I only get charged $.50 for that transaction. For example, on a $3000 invoice, I get charged $.50 instead of $87.30. That’s a huge savings for me. It takes a bit longer for Business Payments to clear but the savings is worth it.

Well, this morning a recent “Business Payment” cleared my account and I logged into PayPal to transfer the money to my bank account. To my surprise, the payment was showing a fee of $80.05 (2.9% + $.30 of a $2750 invoice), not the usual $.50. I took a deep breath and started the process of contacting PayPal customer service and getting this thing resolved.

Here was the process of dealing with PayPal:

1) Filled out PayPal web form letting them know that I was incorrectly charged a percentage instead of the flat fee.

2) Ten minutes later I received a generic email outlining PayPal’s fee structure. At the end of the email it said “If these do not answer your question, please reply to this email with as much information as possible.” I then had to re-type the issue I was having in the email reply.

3) Another ten minutes later I received another email response from Trevor at PayPal: “I apologize for any confusion. Anytime you are sent money in return for goods or services there are fees applied to the transaction. In this case your client sent you a payment via eCheck and the $80.05 was the fee for this transaction.” However, I have successfully received many eCheck Business Payments and been charged only $.50. This email had a phone number on it so I called it.

4) After being on hold for at least 20 minutes, I was finally able to talk to a PayPal representative. After several minutes of explaining the issue, getting put on hold a few times, and then sensing her confusion as to why I was ever charged only $.50 per transaction in the first place, she transferred me to her manager.

5) The PayPal manager got on the phone, I again explained my situation, and the final response was basically this: FreshBooks was doing something “illegal”, PayPal finally caught on to the them, and the $.50 per eCheck transaction Business Payments was a thing of the past. He asked if I’d like to submit a complaint against FreshBooks. I said no since this was all hard for me to believe. FreshBooks has always been on top of the game when it comes to this stuff. I thanked him for the time, hung up the phone, and decided to call FreshBooks to at least let them know that the Business Payment option on invoices was no longer valid and they should remove it.

Here were my steps in dealing with FreshBooks:

1) I called their 1-800 number and was immediately greeted by Joele, one of their “support rockstars.” I started to explain the situation and the PayPal manager’s response, but she didn’t even need to hear the whole story. She mentioned that PayPal had done this to a few other FreshBooks customers recently and assured me that PayPal Business Payments through FreshBooks were completely legit. She said she’d call her contact person at PayPal and then call me back. I hung up the phone.

2) A few minutes later Joele called me back and informed me that PayPal had refunded the $80.05 fee. There was nothing that I needed to do other than to give her a call at her direct extension if this ever happened again. I thanked her, hung up the phone, and my love affair with FreshBooks was still burning strong.

A few observations about this experience:

  • I am now testing out the FreshBooks Stripe integration for credit card payments as an alternative to PayPal. Their fees are pretty much identical and I’d prefer to use a service with better customer support.
  • I will continue to enable PayPal Business Payments for clients to send eChecks if they prefer. However, if this ever happens again I will call FreshBooks (not PayPal) to get it resolved and will then disable the Business Payments altogether. PayPal will no longer be used for any sort of payment processing in my business.
  • I am amazed that I was able to call FreshBooks, have the phone answered immediately, and the first person I talked to was the one who was able to fix the problem. She didn’t give me any sort of run-around or transfer me to a manager. She respected my time and fixed the problem herself.
  • The fact that nobody at PayPal had ever heard of Business Payments was mind-boggling. They acted like I had pulled a fast one on them with my previous $.50 eCheck fees.

I’m posting this not as a “throw PayPal under the bus” blog post – I’m really not even mad at them (I had low expectations to begin with) – but merely as an observation of how varied customer support experiences can be. The difference was night and day.

Major thanks to Joele and FreshBooks. I was already a loyal customer and will continue to be one after this experience.


    1. Dave Yankowiak

      Thanks, Mark. You guys have been consistently wonderful even through all the growth you’ve experienced in the past five years.

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