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PayPal Clarifies Resale Policy Taking Effect on July 31

PayPal Clarifies Resale Policy Taking Effect on July 31

PayPal is updating its User Agreement, effective July 31, 2020, which we wrote about on June 19th on the AuctionBytes Blog (“PayPal Makes Major Changes Impacting Sellers“).

We called out a new provision that makes items purchased for resale exempt from protection under PayPal’s Purchase Protection Program, and a seller raised concerns about the policy: “If I buy a lot of jewelry and I keep some and want to resell some, then what?”

A PayPal spokesperson emailed EcommerceBytes with some clarification and noted resellers would still be able to use the Dispute process. He also provided some examples of cases where the new provision wouldn’t apply.

The following is the clarification the PayPal spokesperson provided verbatim:

Specifically, this is regarding the resale policy going into effect July 31, 2020.

The User Agreement update states “We are excluding items intended for resale, including single item transactions or transactions that include multiple items, from reimbursement eligibility under our Purchase Protection Program.”


PayPal Purchase Protection is intended for end-use consumers; therefore, purchases made for the purposes of filling retail inventory or any purchases made with the intent of reselling the item(s) are excluded from PayPal Purchase Protection.

  • The intent of this change is to ensure that the retail consumer continues to avail the PayPal Purchase Protection while the “business entities” buying their inventory and supplies do not abuse the purchase protection when their supplier relationships and agreements go sour.
  • Users who make commercial purchases are still able to use the Dispute phase, and can even resolve Claims with their suppliers who are willing to amicably solve the problem. However, if the dispute is escalated, and PayPal identifies that a Claim is opened on a commercial transaction the claim will be denied.

Scenarios where this exclusion does not apply:

  • The purchases of collectibles which may be resold at a later point to collectors so long as these are not bulk purchases.
  • The purchases completed as an end user and where the buyer may later decide to sell the item due to a wrong size or a change of heart.
  • The trade in used goods and luxury items between consumers.

The new policy goes into effect on July 31, 2020, with additional changes – you can find the notice on the PayPal website.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

One thought on “PayPal Clarifies Resale Policy Taking Effect on July 31”

  1. Have they backed off this policy with the credit card issuers?

    If they denied a claim that I made because they thought that I was going to re-sell the item (a subjective decision in many situations I think), then I would open a recharge request with my credit card company. As far as I know, my CC issuers don’t try and second-guess my motivations in making a purchase.

    Not sure what this achieves other than more re-charge cases to process which are paperwork intensive for all concerned.

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