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AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Thu Jan 5 2012 09:16:06

Why Would PayPal Tell Buyers to Destroy Their Purchases?

By: Ina Steiner
Sponsored Link
There's nothing that aggravates sellers more than learning that PayPal has instructed their buyer to destroy an item they've sold them, and it can be heart-breaking when it happens to a rare, antique or collectible item.

So when a blog published a letter from a seller that claimed PayPal had instructed her buyer to destroy a one-of-a-kind violin, I received a stream of emails about the case.

It's not just antiques and collectibles dealers who encounter this problem. Sellers of designer fashion and popular electronics are also at risk.

PayPal says it's illegal to return counterfeit items to sellers. The problem is that once the item ends up in the graveyard, sellers cannot validate its authenticity.  

You can read the details of the violin saga in today's Newsflash article. What do you think of the policy? And if you've got a similar story to share, let us know!



Comments (58) | Permalink
Readers Comments

Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
This user has validated their user name. by: Anonymous Annie
       
Thu Jan 5 09:52:35 2012
I'm confused about something... when a suspected item has been destroyed, who pays the refund? ~ PayPal? Or the seller?

If a genuine item is destroyed, the seller loses.

If the seller unknowingly purchased a fake from his distributor, then he should file a police report, but he can't... BECAUSE THE EVIDENCE HAS BEEN DESTROYED!!... and the seller loses.

What kind of proof does PayPal rely upon to determine if something is fake?

Will PayPal rely on the word of a buyer who simply states ''I'm an expert and I say it's fake''? Or does PP need something a little more substantive?

PP's policy and procedure is so lax and full of holes that it could easily be a way for dishonest sellers to ruin the reputation and deplete the stock of a competitor? ~ Just buy up their stock, claim it's fake, show some photos of the ''destroyed'' items (or just submit a signed statement) get your money back. Competitor now has no items to sell, competitor has now lost the wholesale cost of the items AND the profit, and the dishonest seller has one less competitor.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: OhForPetesSake
       
Thu Jan 5 09:52:50 2012
I find it really hard to believe any part of the story with the exception the violin probably was a fake.

If it wasn't a fake then the seller should have been able to prove it was real.

If not then it should have been destroyed as to return it to the original seller would just mean it would just have more than likely been relisted again.

If you are selling something that expensive and claiming it is real you should be able to prove it. If you can't then don't make the claim and don't sell it as real.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: pete
       
Thu Jan 5 10:06:18 2012
Paypal is just as eBay completely pathetic, their idiotic policies serve no real purpose but to basically see the seller ripped off or scammed

This case is the tip of the iceberg, countless designer items have been supposedly destroyed by eBay’s oh so honest buyers, its about time eBay INC were made accountable for all their stupid policys etc
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
This user has validated their user name. by: Anonymous Annie
       
Thu Jan 5 10:15:37 2012
Just to be clear... if PayPal is giving the buyer of the ''counterfeit'' item a refund OUT OF PAYPAL'S POCKET... and the original seller gets to ALSO keep their money, then I've got no problem with it.

Personally, I think it's a sloppy way to do business... and it serves as a flashing neon light that invites fraud... but if PP believes that those types of courtesy-refunds are good for their image, then I'll just take them at their word.

Also, there's a difference between ''counterfeit'' and ''reproduction''. Counterfeits are intended to deceive, reproductions are not. Is PP's policy nuanced enough to cover those types of situations?
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: pace306
       
Thu Jan 5 11:07:36 2012
I need to agree with Annie! The entire process is flawed from top to bottom!

1) who verifies that items are fake?
2) if the item is destroyed  then no police report can be properly filed.
3) Who do you believe?

I was accused by a certain headphone company that I was selling fakes. They Vero'd me untill I shelled out money for an attorney. Even when presented with an invoice from thier own distributor - who verified it was thier merchandise and that it had come directly from the company - they still continued to deny the items were real!

They stopped VEROing me (under threat of law suit) but refused to retract the violations on my account.

In eBayland, customers can say ANYTHING. No one in foriegn countries recieve goods if they are shipped first class, everything they receive is dirty, broken and used, everything is fake and sellers pay for it all.

Until theres a proven way to determine ''real or fake'' in FREEbayland  its backwards, the seller will loose, the item destroyed so no proof can be given - thats how it goes!
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
This user has validated their user name. by: elpereles
       
Thu Jan 5 11:13:21 2012
It is ironic! eBay wants sellers to open their minds to sell worldwide, but their policies aren't helpful.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: Steve Magruder
       Web Site
Thu Jan 5 11:26:47 2012
"No one in foriegn countries recieve goods if they are shipped first class, everything they receive is dirty, broken and used, everything is fake and sellers pay for it all."

I sell a lot of items to buyers in other countries, and not once has this scenario been true.  And I ship easily breakable vinyl records.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
This user has validated their user name. by: permacrisis
       
Thu Jan 5 12:10:14 2012
Tasked with destroying the violin in question, I'd gladly do it- on one condition:

So long as I were allowed to SMASH IT over an ebay executive's head!

You see, the logic works (wonderfully) like this...

If its a flimsy fake, as Paypal alleges (and they would know, since they are a Fake Bank), it will simply come apart painlessly around the targets' head. No harm done.

But if they are wrong, and it is truly an instrument of fine craftmanship and sturdy construction, the job will require MANY MULTIPLE BLOWS over and over. I dare say that many on this site would GlADLY step forward to volunteer for the job, depite its many risks!

After all, no one here really wants to hurt a fine antiq- ...er, ebay executive.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: Bob@eBay12K
       
Thu Jan 5 12:29:46 2012
1.  The fact that PP may reimburse from its 'own pocket' only means their 'fees' will increase for all of us.  While I am a PP customer, I am not ok with that stance as a matter of default policy.

2.  There are claims out there that this 'story' is a hoax based on it's source and potential for PP competitors desiring to discredit based on bad publicity.  I'd like those claims countered by someone (Ina? etc.) demonstrably validating the veracity of the posting if possible.  And even if invalid (in this case), the fact it is even possible (and there are certainly others similar out there already) - should THAT not warrant some attention to address anyway?

3.  PP stands behind their policy declaration that it is 'illegal to ship counterfeit goods' being justification for their ordered destruction.  But this is based only on allegation - they don't even bother to provide the seller with the basis for their 'judgments' - not in this case - not ever!  

An allegation that the seller in this case had noted wasn't viable based on 3rd party validation incidentally.

Now either PP should provide demonstrable proof of such allegations before being allowed to order such destruction, be it a bootleg CD, sweatshop LV handbag, or demonstrably antique work of art musical instrument, or should be legally denied ability to.  

Because if it is only an allegation upon which they will be allowed to act (to compel refund on return), then only an 'alleged' counterfeit is not an 'illegal' item restricted from being return shipped.  They have no basis for this justification regardless of it being an 'agreed UA clause'.    

What happened to due process in this country?  Are business entities exempt from constitution based law, just because they declare themselves to be?

4.  Has anybody addressed the potential for this 'buyer' to have already had a similar 'counterfeit' in hand and destroyed that item to replace a genuine article received?  Bad enough that PP will define benefit of doubt to the buyer by default - eBay does this too.

But these occurances happen because eBay (and PP) have taken the stance that they are NOT in position to judge - thus they make no judgement but rather apply 'policy' unconditionally.  The problem is - that policy also establishes a judgement by default - AND results in assessed violation as if the 'unjudged' allegation were judged as fact!  How is this justified?

Now if these behemouth entities do not wish to pass judgement, that's great.  Get out of the business.  Or establish due process to PROVE factual basis behind such allegations prior to judgement.  One or the other.

And if it's 'too hard' or 'too costly' - then get OUT of the business of allowing ANY potentially controversial item sale.  Don't really see THAT happening though - that would REALLY be cutting into profitibility in a way that even JD couldn't find a way to spin.

Then again, he's likely to have his hands full over the coming weeks what with yet another of his executive staff jumping ship.  Perhaps that's a good thing though - might keep him from 'innovating' anything else for a while.  

What a mess.  

Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: mr obvious
       
Thu Jan 5 12:46:55 2012
In this case, the funds came from the seller: "  I am now out a violin that made it through WWII as well as $2500.

maybe when the big fullfillment wharehouses open up, all the fakes will be in one place, someone can burn or bulldoze them down and save a lot of future grief.

The 'proof' of destruction part is funny too. I can see it now... youtube filling up with 'break the fakes' videos, all sponsored by paypal (users) wheeee!
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: oldparr
       
Thu Jan 5 12:50:57 2012
Logitech does that as well, asking costumers to take a picture of the item they claim broken to take a picture of it under water and then send a new one, instead of pay the shipping back. I really do not see anything wrong with it. What do you expect paypal to do if the buyer claim that the violin is fake? Send an specialist to Canada do analyze it? Ignore the buyer, assuming all sellers are saints? We know there are some very bad sellers out there, as well bad buyers.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: Tired of eBay's Bullsh*t This user has validated their user name.
       
Thu Jan 5 12:53:34 2012
It had to happen ... Paypal's stupid destroy+refund policy would eventually cause the destruction of an antique item.

I do not know if this story is true (but I would bet it is true) -- but, even if not, this sort of PR catastrophe is bound to come home to Paypal's roost.

As of noon on Jan 5, Google News lists 29 articles, and not exactly just blogs...


A VIOLIN has been bashed to pieces, its maker's label clearly exposed. What sadist would commit such a wanton act and send a photo to the previous owner documenting the deed? ... The violin fiasco may prompt PayPal to reconsider its policies for vintage items where the buyer's intent to mislead cannot be proven.
- The Economist


PayPal makes eBay customer destroy $2500 violin, seller left empty handed...
- CBS News


PayPal Smashed Some Lady’s Antique Violin, and Can Smash Yours Too. Buying and selling stuff online can be stressful, since you're always guarding against getting ripped off. Luckily, intermediaries like PayPal are in place to mediate disputes. Which apparently means having your antique violin smashed open to see if it's fake, then not compensating you in any way.
- Gizmodo


And on and on.

I sell antiques, and while I certainly knew previously of Paypal's policy, I (wrongly) assumed it was only invoked for the fake handbag crowd.

But now, I am considering dropping Paypal altogether (from my Ruby Lane store), and closing my eBay store (since eBay it is effectively Paypal-only).

Paypal deserves all the bad PR coming its way on this one. Years of egregious policies towards sellers warrant that.

I cannot imagine anyone siding with Paypal on this one. Their stupidity has finally caught up with them and they've nowhere to hide from public embarrassment on this one.

- Tired of eBay's Bullsh*t
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: Tired of eBay's Bullsh*t This user has validated their user name.
       
Thu Jan 5 13:17:56 2012
@ oldparr, "What do you expect paypal to do if the buyer claim that the violin is fake? Send an specialist to Canada do analyze it?"

ummmm ... How about requiring the buyer to RETURN THE ITEM TO THE SELLER.

Consider...

1. A vintage or antique violin cannot be a "fake", not in the way most people use that word. Plenty of violins made in the last 300 years probably have a label that reads "Strad", and some of those are rare prized instruments worth many tens of thousands of dollars.

2. For Paypal to instruct a buyer to destroy ANY item is wrong, if based solely on the buyers SNAD claim.

3. Even if an item is SNAD, the seller is entitled to that item back, with sellers covering shipping both ways, and with the seller issuing a full refund. Be it a Roseville vase or a pre-WWII violin, the seller should be able to enjoy it on the shelf, or enjoy playing it.

4. It is OUTRAGEOUS that Paypal would order the destruction of anything without compensating the seller. It violates every principle of due process.

5. When the DOJ and State Attorneys General get done with the huge banking mess of 2001-2008, I sincerely hope that they will make at least a 2% effort to rein in Paypal.

6. On the PBS Newhour last night was a piece on the newly-formed CFPB. One point made was this: That a great many practices of Payday Lenders etc etc would never happen at a bank. Why? Because federal regulators would not permit it, whereas prior to CFPB federal regulators had no jurisdiction outside of traditional banks.

PAYPAL IS MORE LIKE A PAYDAY-LENDER than a bank (as Paypal has said many times, it is not a bank).

Hopefully Richard Codray at CFPB will see it this way too.

Paypal is long overdue for some government oversight.

- Tired of eBay's Bullsh*t
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
This user has validated their user name. by: Anonymous Annie
       
Thu Jan 5 13:26:11 2012
oldparr writes: ''Logitech does that as well, asking costumers to take a picture of the item they claim broken to take a picture of it under water and then send a new one, instead of pay the shipping back.''

Sorry, Oldpar... That analogy is poorly suited to this situation. A defective electronic item (that's worth less than the cost of return shipping) cannot be compared to a valuable antique item that is merely alleged to be fake.

-- ''I really do not see anything wrong with it.''

Intelligent and rational people disagree with you.

-- ''What do you expect paypal to do if the buyer claim that the violin is fake?''

I would expect them to mediate the situation with a ''no-fault'' approach so that ALL PARTIES, both the buyer and the seller, are made whole again (or as close as possible, not including the shipping charges.)

-- ''Send an specialist to Canada do analyze it?''

A ridiculous suggestion... next!

-- ''Ignore the buyer, assuming all sellers are saints?''

No one has suggested such a thing (except you)... next!

-- ''We know there are some very bad sellers out there, as well bad buyers.''

You appear to be suggesting that the two things are mutually exclusive... you appear to be implying that it's impossible that a good-seller *and* a good-buyer could simply have a disagreement or misunderstanding.

Frankly, that's a rather simplistic way to look at these types of situations. The world isn't always black or white with clear-cut lines between the colors. There are varying shades of gray as well... that blend into each other. When faced with one of these situations, PP's black-or-white policy isn't a good fit.

It's difficult for me to determine if you actually believe the arguments you're making, or if you're just throwing out the most absurd and provocative statements you can think of for the sheer entertainment value of it.

In any case... whatever your reason may be, I think you should know that such efforts demonstrate that you're arguing from a position of weakness... and that your efforts only serve to illustrate the absurdity of PP's policies and actions... and your arguments serve to reinforce what everyone else knows to be true.

And for that, we thank you.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: Tired of eBay's Bullsh*t This user has validated their user name.
       
Thu Jan 5 13:36:39 2012
ok folks, let's see if we can get Paypal on the radar screen of the CFPB.

Have you been treated unfairly by Paypal?

Why not TELL YOUR STORY to the CFPB, you can do that here:

https://help.consumerfinance.gov/app/tellyourstory
>
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: John
       
Thu Jan 5 13:38:49 2012
Not saying this was the case but even some old antique violins have Strat stickers on the inside.

Doesn't mean their fake or counterfeit violins. Strat is the mark of excellence to this day.

I can see where a buyer could take advantage of a seller saying it was not a Strat and therefore fake....PP would go along with that I think
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: Tired of eBay's Bullsh*t This user has validated their user name.
       
Thu Jan 5 13:42:20 2012
PS...

Dear Erica, who this original story is attributed to -- Please, please tell your story to the CFPB.

https://help.consumerfinance.gov/app/tellyourstory
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
This user has validated their user name. by: TheCheapSkirt
       Web Site
Thu Jan 5 13:44:40 2012
So this is the new solution?

PayPal's previous solution was to ask buyers to send counterfeit items to Dallas, where A LIQUIDATOR RESOLD THEM.

I kid you not.
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: John
       
Thu Jan 5 14:17:43 2012
This is just another reason for sellers to hate Ebay/Paypal

When will the madness stop?
Why Would PayPal Tell Buyers to Destroy Their Purchases?   Why Would PayPal Tell Buyers to Destroy Their Purchases?
by: anyone out there yet
       
Thu Jan 5 15:16:32 2012
If the violin wasn't a fake then why didn't the seller have proof it was real.

Or did she just assume it was real and didn't think she needed proof.

No proof then destroy it. That makes one less piece of junk making the rounds of ebay.

But you would think you would have some documentation it is real if you are selling it for thousands.

If it smells like a scam it probably is.
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