Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Apr 30 2015 11:09:10

New PayPal Buyer Protection Policy Will Impact Sellers

By: Ina Steiner

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PayPal is extending its buyer protection to cover intangible goods, including digital goods and services. Like many payment services, PayPal currently offers protection only for purchases of physical goods, so it's a very big move. However, keep in mind that some marketplaces - including eBay, does not allow the sale of digital goods (except in the classified ad format).

In PayPal's announcement this morning, it said beginning July 1, 2015, "if you pay for a service or digital product using PayPal and it is significantly different from how it was described, or you pay for one of these items and it is not delivered, PayPal will ensure that the money is credited back to your account."

PayPal said services include such things as hotel stays (presumably that includes purchases of airline tickets or services such as Uber).

But it's the digital goods part of the policy that will have sellers most interested. A PayPal spokesperson told us sellers will benefit because shoppers will have increased confidence. And in cases where there is no proof that the seller or buyer are at fault, PayPal will cover the cost of the purchase, she said.

How will PayPal determine if digital item is not as described?

"We will use a variety of methods to determine if a digital item is not as described," she said. "Since intangible products include everything from services such as hotel stays, to digital goods such as digital games - the type of evidence that is required will vary by the type of item purchased. Sellers can always reach out to our customer service team with any questions."

We asked PayPal if eBay did begin allowing the sale of digital goods in the future (beyond the classified ad format listings), would PayPal Protection cover those transactions? And, we asked, was there any reason eBay wouldn't start allowing the sale of digital goods after the breakup since it knows PayPal would protect them?

"While we cannot speak to eBay's future plans, we can confirm that we will cover any digital goods purchases made with PayPal at any merchant including eBay," the PayPal spokesperson said.

PayPal announced another extension to its Buyer Protection policy in the fall that had sellers of tangible goods upset.

Will this latest policy impact you? If so, how, and what digital goods or services do you sell, and where? And how will you protect yourself from any false customer claims?




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Readers Comments

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by: ajeweler This user has validated their user name.

Thu Apr 30 14:07:56 2015

and the beatings from johnny ho begin......the sellers will have to pay again, its not bad enough he wrecked e bay now paypal? the beatings will start.
so let us see someone buys thru ebay, they can return for any reason at all. if this fails now they will have paypal back up for 6 months down the road, digital goods included, so the software sellers now will be having to refund money after a newer product is updated, hence creating yet more theft. only at your friendly freebay now at your friendly preypal led by the ho.
question is this ever going to stop?

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This user has validated their user name. by: Anonymous Annie

Thu Apr 30 14:22:07 2015

Oh good lord. Is anyone surprised? (I'm not.) This is a scammer's dream! An e-shoplifter's paradise.

Given enough time, PP will always come up with something new to exceed our worst expectations.

What's next? A 365 day refund guarantee? A lifetime refund guarantee? A double-your-money-back guarantee? (Stay tuned. Watch this space.)

It seems obvious to me that PP is having much difficulty in excelling on its own merits and value, so instead, it offers ''value'' at the EXPENSE and RISK of the sellers who accept PP as a payment source.

Ugh! Disgusting!

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by: ajeweler This user has validated their user name.

Thu Apr 30 14:32:47 2015

@Anonymous Annie
I think you said it all! these two market places are going to wreck ecommerce they both think they cannot be replaced and sellers have no other options, as most companies learn what goes up can also fall down.

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by: pace306 This user has validated their user name.

Thu Apr 30 17:18:00 2015

There is absolutely ZERO details in that announcement - what am I missing (beyond the OBVIOUS theft from sellers issue)?

Use Paypal for a hotel stay but dont like the maid service - is that SNAD - is it covered?

Rent a car from Hertz but it gets worse gas milage then claimed is that SNAD?

Rent a Netflix or Redbox movie but your wife has seen it already - is THAT snad?

What DIGITAL service are they protecting? Can you imagine being Adobe and selling a $1500 Photoshop suite, paying with Paypal and then having the buyer want to RETURN (not possible) or claim "its too complicated so I dont want it anymore"? senario.

If this is a JD thing - like we all think it is .... boy are they in for TROUBLE!

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This user has validated their user name. by: iheartjacksparrow

Thu Apr 30 17:25:40 2015

In the words of The Joker: "And here... we... go!"

Another move to ruin small sellers. A buyer claims their game, song or whatever was SNAD, and the buyer gets to keep the download and get all their money back! What a plan! No one has to pay for anyting anymore! Man, I wish I didn't have a conscience because I'd been rolling in free stuff!

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by: gizmo This user has validated their user name.

Thu Apr 30 18:19:03 2015

I sell on ecrater , & have dropped PP as well as ebay. Want nothing to do with either crooked company. Ecrater has many payment methods. I dont need , or accept paypal. Im free , Im free alas.

Perminate Link for New PayPal Buyer Protection Policy Will Impact Sellers   New PayPal Buyer Protection Policy Will Impact Sellers

by: Volvo351 This user has validated their user name.

Thu Apr 30 19:35:29 2015

Another policy change, another screw job for sellers.  No one's surprised.

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by: aim04744 This user has validated their user name.

Thu Apr 30 22:00:31 2015

I just love the spin they always put on it. This stupid policy is actually good for you sellers! Yea right.  

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This user has validated their user name. by: Ric

Thu Apr 30 23:06:54 2015

PayPal has been fortunate with regard to companies who accept their payment system.

This announce is the harbinger of the disasters to come for PayPal.

Corporations will not stand for being told by a payment processor that the customer does not believe they received the service they paid for.

One by one c0ompanies who currently accept PayPal will receive one of these unrealistic buyer claims, and will choose to drop PayPal as a payment option after PayPal claws back payments in order to avoid being ripped off in the future.

Just like eBay, the horses will have left the barn before PayPal realizes their new policy will result in many companies dropping them as a payment option.

Memo to investors: Your starry eyed anticipation PayPal becoming a stand alone company just lost a lot of it's luster since companies will begin to migrate away from accepting PayPal in order to avoid being a victim of this latest scam.


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This user has validated their user name. by: Bill

Fri May 1 01:11:53 2015

Ric is absolutely correct. Any big corporation will drop PayPal in a heartbeat.  

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This user has validated their user name. by: Rexford

Fri May 1 07:29:15 2015

Annie and Ric could not have said it better.  To HE** with any of these companies who push the risk and expense on to sellers with these ludicrous policies.

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by: ignatz This user has validated their user name.

Fri May 1 09:06:53 2015

"PayPal said services include such things as hotel stays"

So if you stay at a hotel that neglected to "describe" the roaches and mold included with the room, can you claim SNAD and get a refund from PayPal?  This might be interesting!

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by: pace306 This user has validated their user name.

Fri May 1 10:36:04 2015

"if you pay for a service or digital product using PayPal and it is significantly different from how it was described, or you pay for one of these items and it is not delivered"

Ok - I buy a download or pay for registering my program (ala Norton) via Paypal and either A) my internet goes down/transfer gets broken or garbled OR B) I download and pay for Norton and get a virus after "they didnt protect my PC as promised" ..

Are THOSE covered? Who's shrink wrap license take presidence and whos is "more enforceable"?

Id loose sleep at night using Paypal for these kinds of things. Any company using them for these kinds of things is foolish.

eBay is enough of a thief - this is just "baby brother" trying to muscle in on the theft routine.

If you can - stay away from either or BOTH of these companies - its loose/loose!

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by: I Must be Crazy This user has validated their user name.

Fri May 1 11:40:58 2015

Paypal wants to play with the big boys. That's fine but they will need to play fair. If there are policies that merchants deem unfair, then Paypal will not be an option for payment. Pure and simple, merchants have options and they will not be interested in doing business at a disadvantage. Unlike Ebay sellers, these merchants cannot be forced to accept Paypal. The multiyear exclusivity agreement with Ebay will be the only way they stay afloat.  

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by: ConnecticutGal This user has validated their user name.

Fri May 1 14:09:20 2015

Paypal:  the largest lending library in the world!

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by: Tiffee Jasso This user has validated their user name.

Mon May 4 01:42:54 2015

I think I will have pay Norton with something besides Paypal next year when I renew. Norton will be the first to drop a defective site.  

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by: VintageLady This user has validated their user name.

Mon May 4 10:38:15 2015

Oh, boy! I am not affected because Paypal lost my business with the ''1 million years money back guarantee'' a few months back. And I am sure a large percentage of people/Sellers offering Paypal made suitable alternate arrangements and bid farewell to Paypal then.
Another large chunk of the remaining users of Paypal will abandon the ship now.
Paypal will soon be a ghost town (hopefully!) with plenty of Buyers...

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by: comet This user has validated their user name.

Tue May 5 01:05:28 2015

As far as a hotel refund goes--I purchased a hotel reservation thru a site that instead of booking me into Springfield MASS I was booked into a hotel in Springfield MISSOURI---not even close!  I had used my PP debit card and when the sites Help line was ADAMANT that they were NOT going to refund me and give me the PROPER hotel destination (they suggested I change my plans and GO to MISSOURI from NY for the weekend--um---)  I called PP who quickly grasped the signifigence of the MASS/MISS mix up and CREDITED my account.

Now--I am NO Paypal fan but for this sort of thing--not "I had to wait 5 minutes at the check in desk and I want compensation"--I can see offering some sort of case by case review and possibly a refund.  But--not for every paltry "reason"  every time some one picks up the phone.  

I don't know too much about digital media but this is not Kosher===they are looking to once again take a leaf from the Whores playbook and SCREW SELLERS.  



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