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L$ Tilia purchases charged as PayPal Cash Advance


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Investigating some service charges on my credit card, my bank informed me that Tilia purcchases of L$ were charged to PayPal as a cash advance. This doesn't seem correct. It's a purchase of virtual goods. Has anyone else run into this? Is this an issue of how Tilia codes the transaction? Or is it something in the PayPal black box? 

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I had a problem with PayPal once, my annual SL came up and I showed nothing coming out of PayPal. I called LL and they said they got paid. I called PayPal and it turns out they took the money from my bank account and not from the more than ample funds in my PayPal account. It was a new(?) setting that I had not seen where PayPal hits you bank account before taking funds from your PayPal account, my PayPal account was years old at that point and this had never happened before.

When I told PayPal not to do that they just said, okay, and it has not happened again. It sounds like a way to keep as much money in PayPal as possible.

 

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2 hours ago, Teagan Tobias said:

 

 It was a new(?) setting that I had not seen where PayPal hits you bank account before taking funds from your PayPal account, my PayPal account was years old at that point and this had never happened before.

 

Noting it likely wasn't a NEW setting at Paypal as it has been that way (in the US anyway) for years and years.  There is a place in the backend of Paypal where you tell it where the money should come from. Sounds like you are set now though. 

 

The paying LL turning into a cash advance seems very wrong so interested to hear how that turns out.   

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Thanks, Lilith. 

The answer PayPal gave me was "We do not have control as how this is being charged. To avoid incurring fees when making a cash advance purchase, you may want to use a different payment method, such as your bank account or different card."

The answer from the bank is "Well, it's a cash advance. $10 fee. [For $11USD purchase of L$]" They insist I need to talk to the vendor.

So it's time to find Tilia Pay support contacts and see who they blame. 

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1 hour ago, Melancholy said:

Thanks, Lilith. 

The answer PayPal gave me was "We do not have control as how this is being charged. To avoid incurring fees when making a cash advance purchase, you may want to use a different payment method, such as your bank account or different card."

The answer from the bank is "Well, it's a cash advance. $10 fee. [For $11USD purchase of L$]" They insist I need to talk to the vendor.

So it's time to find Tilia Pay support contacts and see who they blame. 

Are you in the US? If not, what country?  :D

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My PayPal is set up to use the PayPal balance and then pull from by bank account, so I've never dealt with a credit card for this.  However, I did just check a recent L$ purchase transaction and even though it says 'Entertainment' in the upper right of the details, it shows the Category as 'Money Transfers':

 

image.png.7e718e74d052e8e9e9cc4dff2aed3cac.png

I went and pulled the transaction details for an L$ purchase from last August and it shows the same thing.    I checked a transaction from early 2018 and it is the same.   Given that, I wouldn't be highly surprised to see a credit card Cash Advance fee associated with it - if I used a credit card, that is.

 

Edited by LittleMe Jewell
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2 hours ago, LittleMe Jewell said:

My PayPal is set up to use the PayPal balance and then pull from by bank account, so I've never dealt with a credit card for this.  However, I did just check a recent L$ purchase transaction and even though it says 'Entertainment' in the upper right of the details, it shows the Category as 'Money Transfers':

 

image.png.7e718e74d052e8e9e9cc4dff2aed3cac.png

I went and pulled the transaction details for an L$ purchase from last August and it shows the same thing.    I checked a transaction from early 2018 and it is the same.   Given that, I wouldn't be highly surprised to see a credit card Cash Advance fee associated with it - if I used a credit card, that is.

 

Mine has always gone to my credit card (we are talking decades) and I have never had any additional charges. I am in the US though and that might be the difference.  Going back to see if the OP said where they were from. If so, I missed that. 

 

 

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41 minutes ago, Chic Aeon said:

Mine has always gone to my credit card (we are talking decades) and I have never had any additional charges. I am in the US though and that might be the difference.  Going back to see if the OP said where they were from. If so, I missed that. 

I'm in the US. Life interceded and prevented my continuing to chase this down today. Hopefully I can get on it tomorrow, because I'd like to get to the bottom of it. 

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8 hours ago, Melancholy said:

Thanks, Lilith. 

The answer PayPal gave me was "We do not have control as how this is being charged. To avoid incurring fees when making a cash advance purchase, you may want to use a different payment method, such as your bank account or different card."

The answer from the bank is "Well, it's a cash advance. $10 fee. [For $11USD purchase of L$]" They insist I need to talk to the vendor.

So it's time to find Tilia Pay support contacts and see who they blame. 

It does sort of sound like maybe Tilia is sending the transaction to PayPal coded differently than it used to be.  I find numerous articles saying that PayPal transactions are treated like retail transactions and won't incur cash advance fees.  PayPal says mostly the same on their own help page, though they do have a statement similar to what you were told by PayPal.

https://www.paypal.com/us/smarthelp/article/do-i-get-charged-a-cash-advance-fee-when-i-use-my-credit-or-debit-card-to-make-a-payment-faq499

image.png.62c1a5572c2f78ecd6b6ad624b5b1799.png

 

So it sounds like, the transaction is coming in to PayPal as a 'cash advance purchase'.

I'd definitely start drilling Tilia support.

 

 

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17 minutes ago, Solar Legion said:

That would beg the question as to why the transaction is not being handled as such an advance for everyone.

Well perhaps it is a NEW change and there are not that many folks paying via Paypal (lots use their USD balance)  AND they may not have paid attention to their statements.  All that comes into play.

 

We need to hear from someone (in the US) who paid via Paypal RECENTLY and did not get charged that extra fee.    I warned a friend about this who was thinking of renewing premium (not sure if that will happen with the changes).  I don't personally know anyone to ask.  

 

So chime in here folks; we do want to know. 

 

Perhaps @Grumpity Linden can tell us what is going on here with the OP and if there are any real changes.  

 

Thanks Grumpity. 

Edited by Chic Aeon
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That's just it, Chic - in my case I have not used anything but PayPal or the attached PayPal Debit card for years now.

Unless this is an unannounced change that is being tested or some such ....

As a clarification: When my Second Life charges are made, I do not have any money in my PayPal balance. The PayPal Debit card is set to draw funds from my Bank if none are in my Balance. For billing PayPal directly (meaning not using their card as the payment method) my Backup source is set as my Bank's Debit Card.

It is that last one that has me curious: For anyone who is having this filed as a Cash Advance or similar, are you directly billing your PayPal account and do you have the Backup method in your PayPal set to your Bank itself instead of your Bank issued Debit Card?

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9 minutes ago, Solar Legion said:

That's just it, Chic - in my case I have not used anything but PayPal or the attached PayPal Debit card for years now.

Unless this is an unannounced change that is being tested or some such ....

As a clarification: When my Second Life charges are made, I do not have any money in my PayPal balance. The PayPal Debit card is set to draw funds from my Bank if none are in my Balance. For billing PayPal directly (meaning not using their card as the payment method) my Backup source is set as my Bank's Debit Card.

It is that last one that has me curious: For anyone who is having this filed as a Cash Advance or similar, are you directly billing your PayPal account and do you have the Backup method in your PayPal set to your Bank itself instead of your Bank issued Debit Card?

Well we don't know exactly how @Melancholy has her Paypal account  set up.  Mine ALWAYS uses my Amazon credit card. I often have money in my Paypal balance but I have never had anything taken out of that  or charged to my bank balance. It always uses my credit card (not a debit card).    

It could very well be that this is a  NEW thing and something not announced or if announced, not heralded loudly enough for people to realize :D. We will just have to wait and see.   It seems unlikely that Paypal would just decide arbitrarily to make changes. Although maybe reading the most recent Paypal TOS would explain some things. A thought, but not something I want to do.  LOL>  

 

When it all becomes clear, I will report to the masses as this could be fairly important for some folks. I would certainly not be happy to have an extra and unwarranted charge from Paypal.  

Edited by Chic Aeon
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42 minutes ago, Solar Legion said:

That would beg the question as to why the transaction is not being handled as such an advance for everyone.

Which is a real issue. As a general rule, you can't buy money with a credit card. That's considered a cash advance. Whether or not Linden dollars are "money" for that purpose is complicated.  Most of the major US banks do not allow buying Bitcoin with a credit card. That may have filtered down to Linden Dollars. Linden Dollars can be bought, sold and transferred, and which gives them some of the characteristics of a currency.

This is complicated and much discussed in the cryptocurrency community. It's a big issue for "initial coin offerings". Banks may just take the safe position that, if you can cash it out and transfer it, buying it is treated as a cash advance.

 

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28 minutes ago, animats said:

Which is a real issue. As a general rule, you can't buy money with a credit card. That's considered a cash advance. Whether or not Linden dollars are "money" for that purpose is complicated.  Most of the major US banks do not allow buying Bitcoin with a credit card. That may have filtered down to Linden Dollars. Linden Dollars can be bought, sold and transferred, and which gives them some of the characteristics of a currency.

This is complicated and much discussed in the cryptocurrency community. It's a big issue for "initial coin offerings". Banks may just take the safe position that, if you can cash it out and transfer it, buying it is treated as a cash advance.

 

Linden Dollars are not a convertible currency - you are buying game tokens.  So this is not covered by the same exclusions as Bitcoin etc.

Edited by Charlotte Bartlett
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23 minutes ago, Charlotte Bartlett said:

Linden Dollars are not a convertible currency - you are buying game tokens.  So this is not covered by the same exclusions as Bitcoin etc.

While Linden Dollars are certainly --according to the TOS -- a "game currency" they are certainly convertible for anyone willing to go through the steps to process their USD balance to Paypal.   If linden dollars weren't "convertible" we wouldn't have the creators we have now.   So maybe I am misunderstanding your comment?   None of this is new. The CHARGE is apparently new.    

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45 minutes ago, Chic Aeon said:

While Linden Dollars are certainly --according to the TOS -- a "game currency" they are certainly convertible for anyone willing to go through the steps to process their USD balance to Paypal.   If linden dollars weren't "convertible" we wouldn't have the creators we have now.   So maybe I am misunderstanding your comment?   None of this is new. The CHARGE is apparently new.    

True, but that  doesn’t meet the definition of a convertible currency (Tilia make sure they stay on the right side of that particular regulation as a MSB). You are simply trading your tokens with other players for USD.  

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2 hours ago, Solar Legion said:

That's just it, Chic - in my case I have not used anything but PayPal or the attached PayPal Debit card for years now.

Unless this is an unannounced change that is being tested or some such ....

As a clarification: When my Second Life charges are made, I do not have any money in my PayPal balance. The PayPal Debit card is set to draw funds from my Bank if none are in my Balance. For billing PayPal directly (meaning not using their card as the payment method) my Backup source is set as my Bank's Debit Card.

It is that last one that has me curious: For anyone who is having this filed as a Cash Advance or similar, are you directly billing your PayPal account and do you have the Backup method in your PayPal set to your Bank itself instead of your Bank issued Debit Card?

It sounds like the Debit card is drawing money from your bank account -- like a checking/savings account.  That is not the same thing as taking a cash advance out against an actual credit card.  Banks don't charge cash advance fees for using the debit card, though sometimes they charge a transaction fee.  Credit card companies not only charge a cash advance fee, but also typically charge a higher interest rate on the associated charge.  Debit cards and credit cards are the difference here.

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Well then the next time I use my actual Credit Card (Cap One) to buy Linden Dollars i'll have to pay attention - it's been a good, long while.

Honestly just putting my own experience and some information out there. Something like this really ought to have been announced by either Linden Lab/Tilia or by the credit card company (since PayPal only seems to be an intermediary).

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