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Mon Aug 2 2010 23:19:02

PayPal Mulls Expanded Seller Protection for a Price

By: Ina Steiner

Sponsored Link

PayPal is conducting a survey to determine how much sellers would be willing to pay for a new seller protection program. PayPal exposed survey respondents to five variations of the program and asked a series of questions after each.

One plan offered expanded seller protection, covering chargebacks and Item Not Received claims, and might cost sellers between .5% - 2% of the transaction value.

Another plan would give sellers credits every time one of their customers used PayPal that the seller could use towards reversing chargebacks or claims with no documentation. Another plan would allow sellers to choose which transaction to cover.

A fourth plan would offer Shipping Protection when using a PayPal Shipping Partner website to ship an item, while a fifth plan would offer Fraud Protection.

The five plans as outlined in the survey follow below:

1) Expanded Seller Protection - You're covered when things go wrong.
    * Your fraud chargebacks and item not received are covered by PayPal.
    * You are automatically enrolled when you receive payments with PayPal.
    * All you need to do is to provide us with proof of shipping and/or delivery
          o Fraud requires proof of shipping
          o Item not received requires proof of delivery
          o For item not received, if the transaction is greater than $250, then we need proof of signature with the delivery.

If the program was available at this price: 2.00% of the transaction, which statement best describes how likely are you to encourage your customers to pay through PayPal?

If the program was available at this price: 0.50% of the transaction, which statement best describes how likely are you to encourage your customers to pay through PayPal?

2) Seller Protection Credit Enhancement - Be rewarded every time you choose PayPal.
    * Earn credits to reverse chargeback's or claims with no documentation.
    * Whenever your customers use PayPal for bank or credit card, you'll earn credits that you can use if things go wrong, You'll earn a $5 credit for every $1,000 of transaction volume that goes through PayPal.
    * Credits are good for reversing chargebacks on fraud charges, items not received or items that are damaged in shipment.
    * You decide when to apply your accumulated credits.
    * This coverage is good for tangible and intangible goods.
    * Credits can also be used to cover the chargeback fee.
    * Credits have no expiration fee
    * No limit to how many credits you earn or use
    * You can choose to apply credit when claim or chargeback is filed or if you fight the claim or chargeback and lose, you can then apply the credit.
    * You'll receive a credit statement monthly

Assume there are no additional fees for this protection. After reviewing this Seller Protection program how likely are you to enroll in this program?

If the program was available at this price: $40.00 per month, which statement best describes how likely are you to encourage your customers to pay through PayPal?



3) Full Choice Protection - Choose the Protection You Want On Every Transaction
    * You choose what transaction to cover and you are protected
      - Losses from Fraud and Unauthorized Transactions
      - Losses from Item not Received
      - Losses from Damaged in Shipping
    * You'll have 24 hours from the time transaction completes or until you ship or deliver the product (whichever is less) to choose the protection you want
    * You can set preference for automatic coverage: cross-border, international, ASP, etc.
    * You can cover both tangible and intangible items against fraud charges.
    * Documentation for fraud will be based on the type of good:
      - Physical goods require proof of shipping.
      - Digital downloads require server logs
      - Services require a copy of the invoice or contract
    * Items not received or items damaged in shipment coverage will require proof of delivery. If the transaction is greater than $250, then we need proof of signature with the delivery.

4) Shipping Protection Enhancement - You decide what you want to cover on every transaction
    * Use PayPal Shipping Partner Website to ship an item, PayPal will cover fraud charges, items not received or items damaged in shipment on the sales of any tangible items that you choose to cover.
    * This only applies to tangible goods that can be shipped.
    * You can set automatic preferences: domestic regions, cross-border, international, ASP, Fraud Only, etc.
    * Documentation required:
      - No documentation required; we access the shipping information that you created for the transaction

5) Fraud Protection Enhancement - Umbrella coverage for every transaction, 24/7
    * You enroll in this coverage and PayPal will cover you for fraud
    * You can it turn on and off - three times in one month
    * Every transaction both tangible and intangible is covered against fraud charges.
    * Documentation will be required based on the type of good:
      - Physical goods require proof of shipping.
      - Digital downloads require server logs (proof of delivery)
      -Services require an invoice or contract




Comments (79) | Permalink

Readers Comments

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: Gary Overton
Web Site

Mon Aug 2 23:29:01 2010

I would not be interested in any of these programs if there was a charge.
I have never had many PayPal claims. Most of my sales are small so there is probably not as much incentive for me as there would be for a seller who sells higher priced items.
Would like the credit system but would not be willing to pay a fee to get it.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: Marvin

Mon Aug 2 23:31:43 2010

Wow, after all of the buyer fraud that PayPal and ebay have supported, they now want to charge sellers for protection. Seems more like extortion than anything else :(.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: another side of the coin

Tue Aug 3 00:04:19 2010

"And all they got from Paulie was protection from other guys looking to rip them off. And that's what it's all about. If anyone complained twice they got hit so bad, believe me, they never complained again. We ran everything. We paid off cops. We paid off lawyers. We paid off judges."

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: It's the sellers, stupid

Tue Aug 3 00:29:04 2010

So, Paypal shakes down sellers, offering them protection from... Paypal.

Cute... real cute.

Ebay is like the pesky school kid that can't keep his paws to himself, just daring you to give him a beat down.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: fallonthalia
Web Site

Tue Aug 3 00:49:03 2010

Ah, the light goes on! So this is what eBay and Paypal have been up to. Letting buyers rip off sellers, and now wanting to offer sellers protection at a price. If they actually put this into place, I think a lot of sellers would leave Paypal.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: pete

Tue Aug 3 00:59:19 2010

Typical eBay INC ..pay a fee for payment (that should have built in fraud protection)then pay more fees to protect you sale monies.
This makes me so angry we are ripped off by Paypal claims for fraudulent non-delivery claims and chargebacks almost weekly..our crime...we send registered mail NOT FedEx etc
Paypal and eBay are basically a cartel..the bozos who should be policing them are in their pockets

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: RicRoe

Tue Aug 3 01:13:00 2010

At every opportunity, eBay/PayPal encourages buyers to file claims against sellers, and offers these buyer protections at no charge.

It is typical of eBay/PayPal methodology to turn around and hit sellers with a fee and in return for that fee offer protection from the very attacks eBay/PayPal encourages.

In addition, as of 8/10, PayPal will be holding the fixed fee portion of transactions which they demand be refunded under their extortion Buyer Protection policy.

Will there ever be an end to eBay's attempts to monetize the extortion schemes they concoct?

Given the fact that eBay/PayPal encourages buyers to commit fraud upon sellers and condones those fraudulent transactions under the guise of Buyer Protection, the concept of charging sellers for protection from these fraudulent transactions has Rico fraud law suit written all over it.

This is yet another despicable tactic that has become synonymous with the eBay/PayPal brands.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: Marvin This user has validated their user name.

Tue Aug 3 05:38:20 2010

A protection racket. What are they going to do? Once you pay them ''protection'' money they stop hounding your buyers to file complaints against you?

Does anyone honestly believe paypal would do anything other than take your money then impose impossible to meet requirements so they never have to pay off?

ebay, paypal, every politician and public servant that takes their money should be prosecuted.  

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: me

Tue Aug 3 06:24:42 2010

What part of this is not pure fraud?

With all the various secrets like DSRs,  hidden bidders ID and the fact anyone can register and/or even buy as many accounts as they please...
It's just all so obviously wrong it defies explanation.

I'm overwhelmed by disgust and laughter simultaneously. You just can't make this stuff up.

Who is going to be the first to make a scathing parodie video portraying them as goons, mobsters or cartel leaders? Or another version of their home page in the same vein? Static images/posters. Please!
Ought to make it a contest.

We may not be able to change their policies or the laws, but I bet we can make the entire world laugh at them while we get the real message and the TRUTH of matters across, plain as day, in an easy to understand, memorable and entertaining format.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: me again

Tue Aug 3 06:33:33 2010

A little off-topic but people might like to search and read recent articles about a company called yelp.com.

It is relevant due to the fact that they are PP alumni. You'll get an idea of things.

I'll get you started:

Yelp.com Stands Accused of Acting Like a "Modern-Day Mafia"
Thursday, Apr 22 2010

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

This user has validated their user name. by: Philip Cohen

Tue Aug 3 07:16:05 2010

Draft Media Release re PayPal

“It is with very great sadness that eBay’s Chief Headless Turkey, John Donahoe (aka “Peter Principle”—among many other derogatory terms), announces the probable demise of eBay’s most ugly daughter, PayPal. PayPal is about to be stricken by particularly virulent strains of Visa+CyberSource and Mastercard Open Platform, aggravated by PayPal’s insurmountable lack of direct financial institutions participation and a great deal of PayPal merchant dissatisfaction, particularly with respect to PayPal’s grossly unfair, “all responsibility avoiding” UA, totally primitive risk management processes, and grossly unprofessional, buyer-biased, fraud-facilitating, transactions mediation.

“PayPal’s health may therefore be expected to deteriorate and, if ultimately not completely incapacitated, will most likely be eventually confined to its mandatory offering on what little there will be by then left of the Donahoe-devastated eBay marketplaces. There is no cure for this condition, and the “eBafia Don” is particularly saddened by the inevitable presumption that it is unlikely that PayPal, will be able to continue to underpin eBay’s sagging bottom line in the future.”

In Australia, unlike all other payments processors, PayPal has declined to sign up to the payments processors’ “Code of Conduct”. The clear message therefrom is “users beware”!

Indeed, all those payments processors that do not have the direct underlying support of the financial institutions ultimately involved and who “know” the entities involved in any transaction, as does have the likes of Visa and Mastercard, all have the same—insurmountable—deficiencies that PayPal has, and those financial institutions-backed payments processors will eventually eat them all alive.

The fact is, had the original developers of the “bankcard” concept ever behaved the way PayPal behaves, credit/debit cards would never have gotten off the ground, and we would still be paying for all our purchases with pieces of paper and little metal discs.

I accept that from a buyer’s point of view PayPal is very convenient, and PayPal still has some momentum. But, when the banks-supported online payments systems offered by the likes of Visa/Mastercard get their acts together and offer similar convenience, PayPal’s momentum will ultimately dissipate as the obvious benefits of the banks-supported systems gather their own momentum. It’s only a matter of time. …

A detailed examination of and prognosis for PayPal, (including a further link to the “PayPal Horror Tour”) at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6504554


eBay/PayPal/Donahoe:
Dead Men Walking

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: Dman

Tue Aug 3 09:13:40 2010

So basically at this time Paypal can not recognized fraud (even blatant) when its right on the end of their nose, but if I slip them some greenbacks, that’s when the magic starts and fraud can be discovered and routed out by some act of divine intervention.

I really dislike the idea of paying for what they should have been doing all along, Seller protections should be built into their system.

Wise up Ebay/Paypal, your actions have already forced my hand into moving transactions off Ebay (fee avoidance) , listing on other sites ( BS avoidance) and encouraging Bank Wire transfers for my biggest buyers (fee avoidance and piece of mind).  I already do tens of thousands of dollars of business, without any of your services, with customers I met through Ebay, do you really need to keep encouraging me to pull more people out of your income stream.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: Who's Scamming Whom

Tue Aug 3 10:21:19 2010

Hello, local Shopkeepers! We're from the PayPal Correctional Facility and we're releasing criminals onto the streets of your fair town. We believe that in general, people are ''good''... but if you'd like us to protect you from the criminals we've just released, please enroll for protection. It will cost just 5% of every sale. This may seem like a lot, but can you really AFFORD to be without it?

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: stryker

Tue Aug 3 10:49:25 2010


Maybe i missed it, but what about the infamous SNAD,

 the wonderful fraud enabler that exists nowhere except on ebay,

As long as ebay/paypal have this SNAD policy it will be impossible for honest sellers to have any security whasoever when listing hi $$ items.

I am not going to bother to comment on paypals new plans to charge for the same basic fraud protections that all CC providers have had in place for decades,  as part of the service they provide for the fees they charge




PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

This user has validated their user name. by: Ed Gadfly

Tue Aug 3 11:02:36 2010

eBay/PayPal is modeling their ecommerce off the old SUNOCO gas pumps. You could adjust the octane value of the gasoline. Now, you can adjust the level of PROTECTION you want - one star to 5 star protection.

Nice little complicated procedure there as well. I'm sure there won't be glitches in THIS system. So when you do have a problem with a ''glitch'' or lack of protection, what do you do - call PayPal?!?

So is the PayPal Protection (TM) an UNREGULATED INSURANCE plan or an UNREGULATED FINANCIAL scheme? If you or I ran a little business like this the Feds would be on us in NO TIME.

Wow... they charge you to list, they charge to ''have a store'', they charge to convert your money, they charge IF your item sells, they charge to start auctions early, they charge for pictures... and now they charge for protection.

Maybe eBay can charge for boxes!

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: summer in the city

Tue Aug 3 11:09:53 2010



Say what you will about JD, but he has changed the face of ecommerce. Just think of all the sites that would not exist today if JD hadn't wrecked ebay:

Bonanzle
Atomic Mall
GoAntiques
Ruby Lane
Etsy
Artfire
Ecrater
And many, many more...

Amazon has grown exponentially because of Donahoe. So has Craigslist. And when the payment platforms mentioned in Philip's post go live, they'll get a boost too, as sellers drop Paypal like a giant booger.

So, instead of contant bashing for his Destructive Immolation of ebay,  maybe JD should receive an award for growing ecommerce....presented by Jeff Bezos, of course.

What do you suppose that award should look like?


PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: Paypal needs Business Ethics

Tue Aug 3 11:18:03 2010

We pay credit card processing fee to expect certain degree of protection.  Use Amazon Payment, they will cover you all without any extra fee, including unauthorized transactions. Paypal always stabbed me in the back when it comes to Seller Protection, by using "Unauthorized Transaction" clause.  How come these crooks act exactly the same as wall street bankers scamming your money?  
1.9-3.5% transaction fee is charge to cover the cost of "fraud" That is what most other merchant credit card service providers do. Paypal and eBay are run by bunch of scam artist to cheat their customers by changing fine prints on their agreement.  IF YOU CANNOT PROVIDE PROTECTION AGAINST FRAUD, INCLUDING UNAUTHORIZED TRANSACTION, WHERE PAYPAL REFUSE TO COVER IT UNDER CURRENT SELLER PROTECTION POLICY, DON'T CLAIM YOURSELF AS PAYMENT SERVICE PROVIDER.  ONCE THE PAYMENT WAS APPROVED, IT IS PAYPAL'S RESPONSIBILITY NO MATTER WHAT HAPPENS, AS LONG AS WE PROVIDE DELIVERY PROOF.    

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

This user has validated their user name. by: Stockmiser

Tue Aug 3 11:19:26 2010

Paypal can offer whatever "added value" services they want.

What worries me is how this would affect the "basic" service.

I've only suffered 2 charge-backs in 10+ years. Other than those 2, I've won every PP other filing (maybe 6), including some whoppers ($500+).

Would this mean that PP could start allowing bogus buyer claims because I haven't upgraded my seller protection?

This is what concerns me. A convenient excuse to provide less protection for those that refuse to pay the higher fees. Since they control 100% of the buyer credit data, they control all of the information required to detect fraud. So would this mean that they would somehow use better due diligence for those "protected" than those not protected? And if so..couldn't it be argued that they should be using that due diligence for everyone and anything else borders on negligence?

Or....

Will there be no additional security - just more "coverage". Then they are masking an insurance policy as a "service". This is also on shaky legal grounds since they are not in the insurance business.

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

This user has validated their user name. by: Stockmiser

Tue Aug 3 11:22:44 2010

What worries me is how this would affect the "basic" service.

I've only suffered 2 charge-backs in 10+ years. Other than those 2, I've won every PP other filing (maybe 6), including some whoppers ($500+).

Would this mean that PP could start allowing bogus buyer claims because I haven't upgraded my seller protection?

This is what concerns me. A convenient excuse to provide less protection for those that refuse to pay the higher fees. Since they control 100% of the buyer credit data, they control all of the information required to detect fraud. So would this mean that they would somehow use better due diligence for those "protected" than those not protected? And if so..couldn't it be argued that they should be using that due diligence for everyone and anything else borders on negligence?

Or....

Will there be no additional security - just more "coverage". Then they are masking an insurance policy as a "service". This is also on shaky legal grounds since they are not in the insurance business.

I see RICO in their future....

PayPal Mulls Expanded Seller Protection for a Price   PayPal Mulls Expanded Seller Protection for a Price

by: 195956

Tue Aug 3 11:45:46 2010

Not only is this completely preposterous, but it is more-less an admission that they don't have a handle on the fraud.
The more people who leave or quit using ebay and pp the more out-of-control the schemes will become. How many of these things have we all seen now, one right after another? Each getting more bizarre... People may wake up one day to find their pp, bank accounts drained, and/or CC accs maxed out with fake charges or chargebacks, due to a 'glitch'.
What's to stop them?

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