PayPal is making a radical shift in its buyer protection policy in the UK by extending the time a buyer has to open a dispute from 45 days to 6 months, and it will impact eBay buyers and sellers as well. PayPal is also extending protection to buyers of digital goods and intangibles, as we noted in Tuesday’s newsletter.
We initially reported that the forthcoming policy would impact only “intangibles” such as ebooks and MP3s, but PayPal UK spokesperson Rob Skinner confirmed that the 6-month protection period would apply to all transactions – “tangible and intangible,” he said.
The policy takes effect in the UK on June 17th, and a U.S. spokesperson told EcommerceBytes PayPal could consider extending the program to other markets if its customers benefit from the new protections. However, Skinner tweeted on Sunday, “UK only at first” in reference to the new policy, leaving the impression that PayPal is actively planning to expand the program to other markets.
Many sellers are unhappy that buyers will have such an extended period of time to make a claim, believing it could lead to “bad buyers” using their items and then filing a claim and getting their money back – in effect, getting a free product “rental,” so to speak.
Readers reacting to the news were skeptical that eBay and PayPal would apply the policy to all sellers. “I would think many big box retailers on eBay would take issue with this,” one reader wrote and wondered if those large businesses would be exempt. Another skeptical reader wrote, “So let me get this straight… eBay/PayPal believes that a company like Toys R US (who they defend to the hilt) is going to sell a toy, ship it to the buyer, and six months later after a child has played with the toy and broken it, PayPal is going to demand Toys R Us refund the buyer?”
The policy impacts purchases made by UK users of PayPal on whatever site the transaction takes place. That means eBay transactions paid for with PayPal could be covered under the 180-day buyer protection policy: Skinner said that customers would have to opt for PayPal buyer protection rather than eBay’s UK money back guarantee in order to get the extended coverage.
He explained, “The two schemes work in a slightly different way. Time starts to run under eBay’s money back guarantee when a buyer finds out there’s a problem. With PayPal’s buyer protection, time starts to run from the date of the payment. Buyers can’t claim under the two schemes – they have to choose.”
PayPal is emailing UK customers telling them about the changes to the user agreement, giving them the required 60 days’ notice of changes to the user agreement. The update can be found on the PayPal UK website.
We asked Skinner what the impetus was behind the changes. “When PayPal started out in the UK, people used us almost exclusively to buy physical goods. Now, people in Britain regularly use PayPal to buy a wide range of goods, services and intangible goods. So we’re extending UK buyer protection to cover these intangible items. It’s worth adding that sellers will have the chance to show that they have provided the intangible goods and services as described. If so, we will turn down a buyer’s claim.”
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