Profiteering during pandemic, what an enterprise
Sounds like the new version of AliCapone.
tl;dr Figured I’d add my experience to this as it hasn’t been fun thus far. Fair warning for anyone about to buy something from AE through PayPal. If you do, at least don’t split the transactions up just to save $1 and get charged $10 in fees from your credit card company because the charge was billed as a cash advance. Ugh.
Rest of the story:
I bought several items on 11/11, split into three orders so I could use some AE coupons. Big mistake, as all three transactions were charged as CASH ADVANCE and Chase gave me a $10 fee for each one of them ($30 total) and adding insult to injury, a 24.xx% interest accrual from the moment of transaction.
PayPal customer service has been of no help, refusing to address my concern about the TYPE of charge (cash advance vs. purchase) and would only repeatedly say “we do not charge any fees”. I told the rep (via chat) that the fee was not my concern but the type of transaction. They just didn’t seem to get it and kept repeating that the fee wasn’t their problem. So I told them that (as advised by Chase) that the only option would be to dispute the charge, and the PP rep said to go ahead.
AliExpress Help Chat through the robo-rep “Eva” was a similar experience. They make it very difficult to tell when they switch you from the robot to a human. All of the responses were canned, but later on some were edited just enough to make me believe someone was really reading the messages and customizing a template response. In any case they also said that cash advance is an issue with the credit card company and not AliExpress. I really can’t be sure if they understood the problem at all.
So back on the phone with Chase, thankfully I got a human in about 5 minutes hold time. This rep was very understanding and transferred me to the Dispute department, 10 mins on hold there and the rep agreed to submit disputes for all charges. PayPal now has 30 days to respond if I understand the procedure correctly.
I can’t imagine making any more purchases at AE because of this. Thankfully some sellers will allow you to circumvent the payment system and pay via PayPal directly to the merchant. 
Thank you for sharing your experiences with this situation. I am glad we BLF folks come together and share all of this. What a horrible system for us to deal with just because we want to give someone our money.
It appears that Aliexpress was designed to work with Alipay predominantly, paypal doesn’t seem like a hassle-free option.
IMO the issue is with paypal and aliexpress/alipay, they are informing the cc issuer that they are charging the card for a cash transaction.
Apparently this problem is widespread:
https://www.reddit.com/r/Aliexpress/comments/jhympw/cash_advance_fee/
what a mess.
Darn, it looks like this problem is systemic rather than a bank-specific anomaly.
I expect any future purchases I make on AE will be with PayPal, but not until they announce a fix.
I don’t think AE is to blame here, but it seems that it’s now cool to blame the chinese for everything so everybody is trashing Ali without knowing the facts.
I am a programmer and in the past I’ve used Paypal’s Api and there was no control from my part over the actual payment process. My app only asked paypal for the amount and they handled the rest. So my guess is that your issue is either Paypal, or at your card issuer/bank. Last time I used Paypal was just months ago and I had no such problems except their large fees, so it’s most likely the bank. You say their rep was understanding - that’s actually not a good sign. I think they are well aware of everything
It’s a US-specific “anomaly”. Probably another one of the China-USA economic war consequences, that ordinary people pay.
I’m sorry, what? When did I blame “the chinese” for anything at all, much less everything?
Again, I didn’t trash AliExpress at all. I was pretty clear that I reported what had happened in my particular case. Please re-read my whole posting.
I quite literally have no idea who is at fault here: AliExpress, PayPal, Chase, or the merchant(s) themselves. I highly doubt it is Chase’s problem and I also highly doubt it is the individual merchants problems. Therefore it must be with either PP or AE, both of which have abysmal customer service.
Apologies if I read too much into your apparent accusations, but when you said I “blamed the chinese for everything” that irked me significantly.
Maybe my post above sounded like I am bashing AE. If that came across like that, I am sorry. But these kind of issues are things AE should have tested across the board before onboarding a third-party payment provider. We the customers shouldn’t be the ones discussing this on so many forums.
Sorry but that is how all these posts look like. Everybody is rushing to accuse AE for stealing their money, when in fact - doing something like that doesn’t even make sense in the first place. The only parties who would benefit for such charges are further down the line, most likely banks.
This appears to be something like shadow-banning on the Internet. They target purchases from China, add extra fees and taxes to them, you get angry but still not sure at who, so you ask everywhere what’s going on. Bank politely tells you they don’t know but they`ll cancel the payment. AE’s shitty customers service tells you nothing, probably because they really don’t know, or just because it’s shitty - so you think AE is to blame and stop buying. Someone is happy about that, can you guess who?
In the EU, from the next year all purchases from China will get taxed, don’t remember exactly how much but it will be at least a flat rate for small packages, so basically it won’t profitable anymore to buy cheap stuff from China for the ordinary consumer. All this just to save the middle men who bring that cheap stuff from China in containers and sell it to you for 100x+ the price.
Instead of encouraging production of own goods, so that the consumer has a choice, and reduce middle men as much as possible to cut down prices… they are trying to destroy the newly formed consumer-chinese producer relationship to save the middle men.
Aliexpress is a huge international company, they have a management team sitting in California that should be on top of this. I understand that the in the world of payments lots of players may change elements. By now, there is no way Aliexpress does not know about this.
Instead of warning people of potential charges through pp, they are encouraging you to pay with paypal:
This is what I saw moments ago. they are offering a cash discount if you pay with PP.
What if you pay directly with the CC, and not through Paypal? Do you still get that extra costs added? If yes, then at least you know that bank has something to do with it.
I have purchased goods for more than 200 $ so far, including in the last weeks. various debit and credit cards, through alipay - NO FEES.
only when you pay through paypal. and that is across the world, there are customer complaints from the US to Australia on this. huge topics on reddit, paypal forums, etc
Therefore I believe this is a technical issue, where the transaction is coded as cash advance through paypal to your CC issuer. But I don’t know who is doing it.
In the links provided earlier by 2A, you’ll see that this situation is affecting more than just Chase. My understanding is that banks in general do not have any control over how the transaction is presented to them.
You doubted that anyone besides banks would benefit. Here’s a scenario: what if AliExpress is classifying the PayPal transactions as cash advances to avoid paying credit card service fees? It would seem there is a lot of benefit for a merchant / payment processor to intentionally miscategorize transactions in an effort to circumvent the service fees involved with accepting credit cards, especially when the majority of the customers have zero recourse to say otherwise. You can bet that if I went to WalMart, bought a pack of chewing gum, and saw a cash advance appear on my card, I’d be right back in the store asking if the cashier pressed the wrong button on the card reading machine.
I made three AE purchases on 11/11. On 11/12 I bought LEDs from rngwn and on 11/13 I bought C01s from Sofirn’s webshop (not AE store). The same PayPal account and credit card were used in all cases. Only the AE charges appear as cash advance. Whatever conspiracy might be happening, this problem doesn’t appear to be with my credit card company.
Yeah, many “technical issues” at Paypal. I remember a year ago when they had a “technical issue” that prevented you to withdraw your money with a “standard” option, instead of the more expensive/faster option. Basically they added the same ID to both select options And because browsers process form inputs sequentially the more expensive option was always selected regardless of which one was clicked. And the funny thing is that even if you edited the HTML in the Web dev console and changed the option manually, at the next step they throw some system error if you selected the standard option. This persisted for like 2 months, after which they raised the fees to the “standard” option at the same level, so it became obsolete.
I received a resolution from my credit card company (Chase Sapphire) today. My dispute was denied by Chase themselves, but they waived the 3x $10 fees. I don't think PayPal even got to see the dispute notification. The charges remain as cash advances and interest continues to accrue until I make a payment to cover the balance.
The reason Chase gave to deny my dispute was that AliExpress by way of AliPay is classified as a financial institution transaction and therefore gets lumped in the same category as MoneyGram and Western Union - and it doesn't matter that I purchased merchandise. The key here seems to be that PayPal is paying AliPay (not AliExpress), so that becomes a financial institution transaction. There was no way for me to know this given the information provided on the sales / invoice screens during the transaction - only if I had heeded the warnings of others on this very forum and elsewhere.
I also found that there is no way to disable a cash advance on my credit card, although I was able to reduce the cash advance limit to the minimum allowable. There is also no way to require a PIN to make a cash advance purchase like you would have to do with a debit card. This seems like a glaring security problem, but...Live and learn, I guess.
Thank you for feeding that back to us! I can’t believe that in the year 2020 a normal customer has to go through these kind of things.
All of this must have happened when they switched something on their end during their IPO preparation, I think. A very long time ago I did pay with a US issued credit card through paypal (on aliexpress) and there were no fees at all.
All in all, super annoying situation for every customer in the world.
Why you dont just use credit or debit card as USA customers. I have hundred orders from AE with VISA card and no issues so far. Also AE protection system is reliable as PayPal protection so I can’t see any reason to use PayPal which charge you more every time. If I want to pay with PayPal first problem is with there currency exchange rate. If I use their currency converter they will charge me more compared to my bank.
I don’t see the difference between PP or CC paying Alipay? Aren’t they both going to see it as a cash advance if that is where the problem lies?
Some people probably don’t feel comfortable putting high value credit cards into a payment system that is based in another country. Not blaming anyone or a Chinese company here. But all the cards I use on Alipay/Aliexpress are either debit or pre-pay debit cards that I always keep on 0$ (I top them up before I buy something).
I unfortunately don’t feel comfortable putting my Amex Platinum on there, I don’t know why. Maybe it is the very high $ limit or because American Express is marketing their products as “premium” to us. If something happens on my one-use Revolut, I won’t care. But a 20K $ Amex is a different story.
So the way it is setup right now is that purchases through a credit card through Paypal to Alipay is coded as a cash advance. Not when you pay directly with a credit card at Alipay. At least that is how I understand it from various threads I combed through.
Alipay is a financial services company, not an e-commerce store. If you use your paypal account and a credit card as a funding source, it is like you’d be paying neteller, or any other e-money transfer service. It is like walking to an ATM and get cash with your credit card (don’t do that).
Cash advance fees have many reasons, one being you could “manufacture spend” with it and gain loyalty/rewards points on a card without actually buying a good or service.
My understanding is the same as 2A just explained. Using a credit card directly with AliExpress results in a normal purchase on your card. No problem. Using a credit card with PayPal to pay for an AliExpress purchase, which results in PP making a payment to AliPay, results in a cash advance because you end up paying a financial institution - and all of this is not obvious to the customer at all until they check their credit card statement.
I used PayPal for this transaction for a couple of reasons: 1. AliExpress gave me a coupon to pay with PayPal (!!!) and 2. I’ve used PP to pay various web merchants many times without issue, so I had everything in place already and just did what I was comfortable with.
I just got a $10.00 cash advance fee (plus a .50/cent interest fee on that) on my card. And an additional .50/cents. It burns me up to learn it AFTER the fact. Had they put it up as I was ordering, I’d be more understanding. As it is, I’m done with AliExpress until I’m sure they won’t cheat me -that’s what that BS is, I was ripped off. I don’t care who has my money, they have no right to it and I want it back.
EDIT: Turns out that I got screwed by Venmo. A pizza shop was only doing Venmo/Takeout pay and order in advance. The 10 charge hit 5 days after the pizza putchase and there was no reference to why it was charged. Arguing with my CC company got me nowhere but they did put a “no more cash advances allowed” on the card.