Many ecommerce merchants allow customers to pay for their products using PayPal, the popular payment service that's owned by eBay. But some of these merchants say PayPal unfairly sides with customers if the customers dispute legitimate purchases. We asked Colin Rule, PayPal's Director of Online Dispute Resolution, about this assertion, and how, exactly, PayPal resolves disputes between ecommerce merchants and their customers.
PeC: If an ecommerce customer pays for a legitimate product using PayPal and then decides he doesn't like it and complains to PayPal, what will PayPal do?
RULE: In cases where the buyer is simply disappointed in the item, we would encourage the buyer to work directly with the seller. PayPal does offer buyer protection, but this protection covers buyers for items that they didn't receive and for items that are significantly not as described. It does not cover cases where the buyer is merely disappointed with the item or where the item did not meet the buyer's expectations.
PeC: What are a merchant's options if a customer asks PayPal to hold payment?
RULE: If a merchant does get a chargeback, a couple pieces of information can be extremely helpful to dispute it. Proof of delivery, such as online tracking offered by both USPS and UPS, can be critical evidence in reversing the chargeback. A copy of the buyer's signature confirming receipt can also be extremely effective. Finally, if a merchant did refund the buyer at any point in time, proof of the refund (and/or the shipment of a replacement item) is important.
PeC: What other options are available to merchants to address disputes?
RULE: Again, we always encourage buyers and sellers to first try to work through disputes together. To help with that, we've launched the dispute resolution center - a step-by-step system designed to facilitate communication between the buyer and the seller in order to get resolution of the issue. Since launching PayPal Dispute Resolution, buyer claims against sellers decreased by 50 percent, and seller losses on PayPal due to chargebacks decreased 20 percent.
If the dialogue with the seller fails to produce a satisfactory result, the buyer can then escalate the dispute into a claim, where our claims specialists gather information from both parties, examine the case and work with both parties to try to fairly and efficiently resolve the claim. In this process, PayPal will ask sellers for documentation that helps us determine that they shipped the item to the buyer and that the item was as described.
PeC: Why should an ecommerce merchant accept payments from PayPal?
RULE: It helps them increase sales and lower costs. PayPal has 141 million accounts worldwide and merchants therefore have access to a large, global base of buyers. At any given time, there is $3 billion stored in PayPal accounts, which turn over every two weeks. Many buyers view the money in their PayPal accounts as discretionary, so they are more willing to spend it, perhaps with an ecommerce merchant.
Wednesday, April 09, 2008 · 06:20 AM
I have used PayPal for about 5 years now & never had a problem. Every dispute, which there have only been 3 or 4 has been won by me. It's not hard to prove your case. You don't need to pay the $30.00 customs fees for UPS for any other service. Just use the customs form (FREE) from the USPS for International orders. It's a US Federal Document that stands up in any court, therefore by law eBay & PayPal are REQUIRED to accept it as proof of shipment. Read the fine print, you only need proof that the item was shipped, not that the item actually reached it's final destination. YOU CANNOT BE HELD RESPONSIBLE FOR ANYTHING THAT GETS CAUGHT UP IN CUSTOMS. And remember, it doesn't get caught up in US Customs, it gets caught up in the Customs Agency of the DESTINATION COUNTRY. It is up to the customer to check with their customs office to find out what the disposition of the package is. It is up to the customer to pay any additional fees that may be associated with the shipment. NOT THE SELLER!
Also, all you need for domestic orders is delivery confirmation. That costs approx 0.75 usd for your package. (0.65 usd for Priority Mail). If you print your postage online, then it's free. You don't need to prove the customer signed for it, you just need to prove that it was shipped to the address it was ordered at. That's all!
However, a very viable alternative is Google Checkout. It works great with absolutely no problems! I now use Google Checkout & PayPal. I left eBay, because they are the main cause of problems & outrageous fees. Anyone looking for an alternative should go to eCrater.com. They allow you to set up a store for FREE, Listings are FREE and PayPal & Google Checkout integrate with it with no problems at all. By the way, Google Checkout is also FREE to sign up for. And I beleive their rate is only 2.0% + 0.20 per transaction. (Not per item).
And no, this is not an ad for any of the aforementioned places, I'm just voicing my experiences with these businesses. I also have stand alone websites that also accept PayPal & Google Checkout & have absolutely no problems with either one of them. Keep in mind, PayPal is out to protect buyers on eBay. When it comes to other sites, they are not as anal retentive. They are not truly unbiased.
-- Chris
Monday, April 14, 2008 · 07:01 PM
The problem is paypal has to comply with all the laws of every state and the regulations set by credit card companies. They have to take a middle of the road approach to everything. This is what hurts the sellers because they have to error on the part of the buyer. Paypal and eBay both give more power to the buyers. For example look at eBays foolish system with the new feedback ratings. They decided that you can be a power seller if you have 4.5 in all the categories. Also, they state that you have to have at least 4.6 or 4.7 to qualify for listing discounts. What a joke. I had 4.7 on shipping charges since they started the program. Soon as they created thre discount policy my shipping charge rating falls to 4.5 thus disqualifying me. Soon buyers will be using negative feedback as blackmail. If a buyer can leave negative a seller should be allowed also. I can go on like all the others that posted above and telling you horror stories. I wish paypal would take a postal receipt as proof of shipping. As a buyer I love paypal, I outsmart them and use my credit card everytime. By using my credit card paypal has to play fair. My credit card company has told paypal where to go a couple of times. Paypal knows that and makes it more difficult to select that method of payment. Also, they don't make as much with me using my credit card. I will never ever get a paypal credit card!!
I like the idea of shipping online with the US Postal service and getting free confirmation. But, I will never use that, because the postal service is also ripping us off. Confirmation should always be free. The system is computerized for Christ sake. Sorry, people its just fun to vent on eBay and Paypal. Hurry up competitors the market is ripe.
Another issue is western union money orders. All of my listing say that is my preferred method of payment. eBay ended a couple of my recent listings sayint that is not a valid form of payment and that even mentioning western uinion will end my auctions. That is a bunch of bull. First, its been a couple of years since I even got a western union payment. I used to love the checks being mailed directly to me from them. eBay don't like western union because they don't make as much money with it. I can understand fraud coming into play but, lets face it, its more their greed than anything else.
Thanks for letting me vent.
-- fedupwiththem
Thursday, August 21, 2008 · 11:47 AM
Well if it makes any sellers feel any better, paypal has caused me to lose money too.
A while back I bid on an item costing $150. but it did not show in the My Ebay as a win. Thinking someting wrong I clicked on it again. I contacted seller who understood the problem. Couldnt reach anyone from ebay nor paypal who understood anything. My bank account was not only overdrawn but monies held from sellers refund too.
The overdrawn fees were such by the time the hold was released it was WAY more than the $150!
Had a similar example happen recently while trying to 'send' $400. & got invoice for same amount - another big screw-up.
And another in April for close to $100.
The paypal customer representatives, usually, are poorly trained and rarely comprehend more than the script they appear to read for almost every response.
Unfortunately - Ive learned to give paypal access to as little financial informration as possible becasue the more they have the more they tamper with leaving the abused with NO RECOURSE - other than licking ther paypal inflicted wounds.
The grass looks geener on the other side;
because the other side has more manure!
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