PayPal Expands Buyer Protection Program for Off-eBay Transactions

PayPal is expanding its buyer protection program for shoppers who use its payment service on merchants' websites effective November 1, 2010. Last year, PayPal began offering purchase protection on merchant sites for select purchases, if the buyer didn't receive the item ("Item Not Received," in eBay-PayPal parlance). Beginning this November, PayPal's buyer protection policy will be expanded to include items received but significantly different from what was described by the merchant ("Significantly Not as Described," or SNAD).

The expanded coverage also applies to marketplaces sites including Etsy, although local pickup isn't covered.

PayPal said the extended significantly-not-as-described coverage would apply to all of the 190 countries it serves except Belgium, Brazil, France, Italy, the Netherlands, Poland and Spain.

The protection is similar to that already offered by PayPal for eBay transactions. Merchants who are unfamiliar with the buyer protection program offered on eBay should review PayPal's Seller Protection program to ensure they follow guidelines that protect them in the event of a claim. PayPal also blogged about how sellers could avoid buyer claims on its corporate blog.

PayPal said it could offer extended protection due to its sophisticated anti-fraud model: "PayPal has processed billions of transactions in the past 11 years. With this technology, PayPal often detects and stops fraudulent activity the moment it occurs and before it ever reaches our customers."

Katherine Hutchison, senior director for global risk management at PayPal, said, "When you use PayPal this holiday shopping season and beyond, you can have peace of mind knowing that we're offering even more protection if something goes wrong."

See reader reaction to PayPal's announcement in Letters to the Editor.

Updated on 9/29/10.