Are Buyers Protected With PayPal?

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Are you really protected when you buy something using PayPal?  I thought the answer was “yes”, but recently learned that it is “yes, if…”.

I have been using PayPal for years to buy stuff and to receive payment for things and have never had a problem, until recently.  When I consider purchasing things from companies outside the US, I would always check to see if they accept PayPal and if they do I wouldn’t worry about whether or not I got my money back if the item was not what they said it was.

I was looking for a specific item from China using Alibaba.com.  I have purchased things from several companies this way and have never had a problem. I have a couple rules that I follow when purchasing from China. First, the company must have been on Alibaba for more than 1 year.  If they pass that test I search the company name to see if there is any negative comments about them.

If there are recent negative remarks I do not buy from them.  If there are not any comments than they might be okay.

The second rule is to pay by PayPal if possible because I thought I would get my money back if I didn’t receive the items I paid for.

I found the items I wanted and the company was in their 2nd year with Alibaba. They also accepted PayPal.  I searched and there was no mention of anything negative about the company so I made the purchase.

When I went to send the payment, PayPal only gave me the option of e-Check which I have never had to use before.  I usually pay with a credit card so I have the extra protection from the credit card company as well.

It took 5 days for the e-check to clear and I then received a package in the mail 3 days later. I opened the package and imagine my surprise when there was make-up worth maybe $1.

It was 2 things of lip gloss and 2 things of green foundation.  I don’t have use for either and can’t resell them because they are mislabeled defects.

I quickly did another search on the company name and found that someone had posted something three days earlier about how they received make-up instead of what they ordered.  They spent a lot more money than I did.

I wasn’t worried because I paid through PayPal and knew I would get my money back from them, or so I thought.

I logged into PayPal and went to the Resolution Center to report a problem. It gave me two choices:

Item Dispute: I did not receive an item I purchased or the item I received is significantly not as described.

Unauthorized transaction: I did not authorize a recent transaction.

I chose Item Dispute.  On the next screen it explained some things:

Reasons for opening a dispute:

  • You paid for your item, but you haven’t received it.
  • You received an item that is significantly different from the seller’s description.

The second one applied to me so I entered the Transaction ID and continued.

It then brought me to a screen and asked me to select box that closely matched my problem.  There were many problems like the item was similar, but not what I ordered or it was a fake, etc. I choose the item was different than as described or something like that.

I then put in my story  and submitted the dispute. Within seconds I received an email saying that the transaction was not covered under PayPal’s buyer protection.

I could not believe it.  I called PayPal to find out what was going on and he person I spoke with explained that they don’t cover purchases outside of eBay because then it comes down to the buyer saying they didn’t receive what they ordered and the seller saying they sent what they ordered.

He said with ebay they can look up the auction item and verify.  Now to me that does not make any sense.  The same thing can happen with ebay and has in fact happened to me.

One of the buyers said they never received the item they purchased. This was the day they would have received it which was really odd.  I didn’t get delivery confirmation so there was no way to track it. All I had was the receipt. Long story short, PayPal believed me because I had over 200 transactions with no complaints, but that was before eBay purchased them.

I did some digging on their story and I found an ebay seller that did not get a tracking number or delivery confirmation.  A buyer complained to PayPal so the seller sent all sorts of information.  The buyer has complained about not receiving the item on numerous auctions and was suspended by eBay. The seller scanned the receipt from the post office and forwarded all the other information to PayPal.

PayPal came back and said sorry, you didn’t have a tracking number so there is no proof they received it.

Do you see what kind of problem a policy like they have can cause.  Scammers, both buyers and sellers, are taking advantage of the system. Long standing verified PayPal users are losing out to brand new accounts, but like the gentleman told me, if PayPal decides to reopen the case and investigate it further I may get some monetary compensation.

If you are a buyer and you want to make sure you purchase is guaranteed this is what you have to do according to the email I received from PayPal:

To qualify for PayPal Buyer Protection:
* Use PayPal to purchase an eligible item on eBay.
* Pay for the full amount of the item with one payment. Items
purchased with multiple payments are not eligible.
* Send the payment to the seller through the Pay Now button or the
eBay invoice.
* Open a dispute within 45 days of the date you sent the payment,
and escalate the dispute into a claim within 20 days of the date you
opened the dispute.
* Keep your PayPal account in good standing.

At that point I thought I was out the money.  PayPal would not allow me to use my credit card for that purchase like they had for all of my other purchases so I did not have the credit card company to turn to.

I called my bank and explained what happened.  They said I could fill out a dispute form and I would get my money back.  I filled it out and will have my money, but for how long?

The lesson of the story is that PayPal is not a safe way to buy goods unless you buy off of eBay.

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