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PayPal Amends UA, Won’t Protect Crowdfunding Payments

Planning to use PayPal to buy or sell gift cards or to support a crowdfunding project? You should know that PayPal is updating its User Agreement, and changes encompass buyer and seller protection and dispute resolution.

The amended UA will be effective for all PayPal users on June 25, 2016.

According to PayPal’s summary of changes, “Items equivalent to cash, including gift cards” will no longer be eligible for Seller Protection.

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Likewise, PayPal won’t extend Purchase Protection to buyers for gift cards either – “We’re also clarifying the exclusion for items equivalent to cash to now include stored value items such as gift cards and pre-paid cards.”

Also ineligible for Purchase Protection:

  • Payments on crowdfunding platforms;
  • Anything purchased from or an amount paid to a government agency;
  • Gambling, gaming and/or any other activity with an entry fee and a prize.

PayPal is also making some changes to SECTION 13.2 Eligibility Requirements:

We’re deleting the requirement that user’s pay for the full amount of the item with one payment.

We’re adding that you must respond to PayPal’s request for documentation and other information in a timely manner.

And under SECTION 13.5 Dispute Resolution, PayPal explained: “We’re updating the second bullet of Section 13.5 and are now requiring all buyers to wait at least 7 days to escalate a dispute to a claim regardless of the transaction amount.”

PayPal had made major changes to its User Agreement at the time of the split with eBay last summer, and made additional changes in October, which you can find on the PayPal website.

You can find the most recent announcement of changes taking effect on June 25, 2016, on this page of the PayPal website.

Don’t like the changes? PayPal says you should close your account before June 25th.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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