Avoid getting ripped off when paying with Paypal

I have a client that purchased a website for $3800 and he sent the money after the files for the site were transfered but before the domain name was turned over and once the payment went through via paypal the seller stopped responding so he issued a dispute with paypal and waited and waited and waited some more, after about 8 days paypal sent a very simple email saying sorry but because the purchase was for an intangible item that they could do nothing about it. I spent about 3 hours on the phone with paypal today for my client talking to all levels of dispute services and the most they would do is cut the loss in half and refund half the money out of paypals own account. I was unable to get a full refund for him, BUT I did think of a way to avoid this from happening: If the seller is only willing to pay via paypal: you need to make the sale include a tangible item, for example when purchasing a website require the seller to give you a copy of the files on a cd and include a shipping addres when you place the order and then it will be registered as a tangible sale and you will have full chargeback rights if needed. Just be sure to require the seller to ship the cd registered mail so there is a record or non record or recipt. I spoke with the dispute dept at paypal and they said that this is a good idea and had my client done this he would have had a full refund.

Hope this helps

Abbadox

 

great advice.

 

That's a great idea.

 

cool...but would paypal still cover you in case the cd (tangible) was sent but domain (nontangible) wasnt?

 

good question

 

The key to the transaction is to make it a tangible sale, as long as this occurs you retain full chargeback rights. You could even make it so the domain name transfer occurs before you accept recipt of the cd that way you can always refuse the cd and process the chargeback if needed.

 

Thats quite a clever way of doing it, because you could say the cd was worth the price therefore they would have to refund it fully

 

great idea

 

I know a way your client can get his money back anyway........ contact me

 

Actually this doesn't work either I don't think...
If the seller can proove that he shipped the CD to you (ie with UPS tracking number), then I'm pretty sure that PayPal will side with him in the case of a dispute.
A better idea would be to use your CC with PayPal so you could take your case to the credit card company and then they can talk to paypal on your behalf. Much more convincing, and more likely to work IMO.

 

That is why you do not accept recipt of the cd until everything has been transfered to you. The cd is the last and final step to close the deal and if that does not occur then you will get your money back, this has been confirmed with paypal on both levels of cust support. You are correct that you can always dispute the charge with the credit card company also, but I prefer to be able to prove that the deal did not go through instead of just saying so. If the seller cannot prove you recieved the cd (no proof of delivery then you will get your money back 100% of the time, if you just do a online transfer of the files and then try to dispute with the credit card company you may or may not get your money back).

 

Another thing to consider is you could always say the cd does not work, then you would still get a refund. The most important thing is making the sale include a tangible item.

I only posted this information to help someone who wants to buy a website and the seller wants to be paid via paypal instead of escrow. If you want to make sure you can get a refund make the seller send you a back up copy of the files on cd and include that info on your paypal payment along with the shipping address and you should be safe using paypal.

No matter what the seller tells paypal you can always get a refund, you can say it does not work, it has the wrong info, whatever, the point is you did not get the tangible product you paid for.

 

Very interesting thread!

Thanks guys...

 

Why not just use an escrow agency?

The fees are not much more than paypal and you are protected from fraud?

 

No, that will not work. You are obligated to give the seller a chance to make the transaction correct if there is a problem. If you say the CD is bad, he can ship a new one. If you then refuse it, you breech the contract.

It can get complicated. Most would say just don't use paypay for more then $20.00. Use an escrow account instead or a real credit card company.

 

I have spoken with paypal and asked that exact question, if the cd is bad you can ask for another one or a refund (as far as paypal is concerned the cd you are buying might be a one of a kind, or that you are buying the original cd not a copy). Escrow is still the best choice, but some sellers will only take paypal.

 

could use escrow for the domain name and paypal for the rest? but still has problems if your seller and the buyer decides he just wants the domainname

 

Definitely going to try that. Thanks for sharing it with us

 

My recco for any transaction more than $1000 use escrow, and share the payment towards commission.

 

Good thread, thanks for the advice