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Paypal 101 for Buyers & Sellers

post #1 of 4
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Paypal for Buyers

This tutorial is for a Paypal dispute filed by the buyer. eBay disputes and credit card charge backs are not the same.

First, make sure that you have given the seller ample time to contact you before filing a dispute. If you cannot contact them by e-mail use eBay’s contact information page to try calling the seller to explain the problem. However don’t wait to long. In most cases you have a 45 day period in which you can file a dispute. Also make sure your dispute is valid. Just because the jeans are the wrong size doesn’t mean you should file a Paypal dispute saying they are fake. Buyers with invalid disputes will often end up wasting their time if they go up against a knowledgeable seller.

Also don't threaten the seller with a dispute. Don't even let the seller know the dispute is coming. Often times sellers who don't sell often on ebay will drain their paypal accounts and there will be no money left in them to pay your claim when you win. I will assume that you at least know how to begin filing a dispute if you are reading this.

Lets discuss, the "Filing a Buyer Claim." Here most of the other information is self explanatory. They ask for any additional information. Make sure to file in the exact problem. Lets say I purchased a fake pair of jeans. I would say:

Quote:
“The Diesel jeans I received from the seller are fakes. I have been wearing this brand since 2000 and I know how to tell the difference between real and fake. This pair doesn’t have the micro stitching on the tag. I also took this pair to an authorized retailer and they agreed that it is a fake.”
Personally I would say I took the item to an expert in the field prior to being asked by Paypal that you need to due so. Do this even if you have not done so because it can scare the seller into giving you a refund.

Go to the next page Filing A Buyer Claim. On this multiple choice page some of the answers are wrong. Picking a wrong answer will automatically close your Paypal dispute. Make sure you pick the one most relevant to your claim. In this case “Imitation” is the best.

Next pick the amount of refund you want. You should pick a full refund. A partial refund can be a good argument point for the seller that you are just interested in getting a discount for your item and may result in your dispute being closed.

At this point you should already have a chance to win the dispute. Most sellers will cave in because of a few reasons. 1. Paypal puts a hold on the money in their account and they want access to it. 2. They are scared that you will win anyways so they just want to get it over with.

Some important information to remember is that the seller has 10 days to respond to the claim. Keep in mind holidays etc that might have the seller too busy to respond to the claim and file at this time. No response and you will win automatically. If the seller does respond and refuses then you will be asked to provide more information. This is usually in the form of an expert in the field of that item saying it is fake, damaged etc. It requires a written letter on their company’s letterhead. Paypal will review this. As long as all your information lines up and says exactly what the original claim was you will win.

If after all this you don’t win which is unlikely then there is still a way to get your money back. Paypal! Call them up and find the nicest friendliest representative you can. Tell this person the case in a nice calm voice. If you are lucky Paypal will give you a partial or full refund of your item. If you don’t get the right person on the phone the first time hang up and call again. Sooner or later you will.


Paypal for Sellers

First thing I am going to tell you is its basically impossible to win a Paypal dispute against a buyer if:

1. You don’t have a qualified Verified Business or Premier Account
2. You ship to an unconfirmed address
3. You ship with out tracking
4. You ship without signature receipt on items $250 or greater

You don’t follow these 4 steps and you have no chance what so ever-consider your item and money history! Maybe you get away with it for 1 or even 100 sales but it only takes 1 charge back from a buyer of a $200 item to teach you a valuable lesson. I had almost 800 sales before a buyer using a stolen credit card ripped me off. It was only $30 but sometimes I am selling comics for a few grand! Just imagine getting ripped off for $1000. THAT’S GOTTA SUCK!!!

#1 Rule of Paypal is drain all the money you don’t need in there. If you leave your money sitting around and Paypal flags your account for some reason your entire account can be frozen. People have lost a lot of money this way. It has wreaked peoples businesses and lives. Make sure you take your money out on a regular basis!

Go to Paypal right now and setup your account to a business or premier account. Its simple to do and I believe is mandatory to accept money from ebay with a Paypal account.

Next go to the My Accounts - Profile – Selling Preferences - Payment Receiving Preferences. Select the option Block payments from U.S. users who DO NOT provide a Confirmed Address. This deals with all the U.S. buyers who don’t have a confirmed address. In fact it will even walk them through confirming their address. Which any honest buyer will do. From this point you can also block all international payments too. This is because both Canadian and English buyers can confirm their accounts. I do let other international buyers know that I don’t accept Paypal from unconfirmed addresses in my auctions. If they are honest buyers its not a problem for them to get a money order, cashiers check or do a wire transfer. If they do a wire transfer make sure you find out from your bank how much it will cost and include that in the total amount due.

All the major shippers offer tracking and signature confirmation. Also I would recommend insurance. I have mandatory insurance for anything over $50. That’s simply because that’s about the point when it is to much for me to lose.

So you followed all those steps and now a buyer files a dispute against you. You now have to respond to Paypal with in a period of time. The seller has 10 days to respond to the buyers dispute. If you DO NOT respond you lose automatically.

You have 3 options agree, resolve and disagree. Unless you are at fault choose disagree. If you are at fault you shouldn’t be trying to win a dispute against the buyer because I can guarantee you have no chance of winning against any buyer who know how to win a dispute. Paypal always sides with the buyer as long as the buyer gives them information proving their claim.

You have the option to give the buyer a partial refund at this point. Do not do this. There are a lot of buyers who are con-artists. They file disputes just to get a partial refund on items. Basically they have no problem with the item they just want to save more money and find it easy since many sellers will just cave into a partial refund just to get Paypal to release the hold they place on their money

Now you need to provide Paypal with details of your transaction including tracking, signature confirmation and anything else. Anything info you can provide to disagree with the buyers claim is helpful right now. Photos of an item that is undamaged, certificates of authentication anything that you think will be in your favor. If you can’t provide the details you lose.

At this point a Paypal Dispute Resolution Specialist is assigned to your case. The specialist will request information in the from the buyer. Usually this involves a expert in the field of whatever item the dispute is about. If the buyer can’t provide the information with in 10 days (well I think its 10 days but I am not in a dispute at the moment so I can’t say 100%) then you will win the dispute.

As long as the buyer provides information backing up their claim chances are you will lose. So if you sold them a fake pair of jeans or a comic book that is in Very Fine condition that you said was in Mint then you are screwed you have no chance to win unless the buyer gives up. Which if the buyer is anything like me and pinches all his pennies you are totally screwed!

If the buyer wins they must now ship the item back to you in the condition received. At this point you should have some photos of your item ready just in case they try to pull a fast one. Like swapping your comic that was in great condition for one that is all tore up or a fake pair of jeans for your real ones. If this happens immediately contact Paypal. Take photos of the new item and get ready for a huge drama.

Now I know maybe this didn’t help you much as a seller because you are now thinking its impossible to win. Well no its not. The way a seller wins disputes is not by trying to fight the buyer after the fact. Sellers win through prevention. If you follow all the steps listed above and are selling quality items you don’t have anything to worry about in the first place. Except those occasional crazy buyers who want to try and tell you the item I received is a different color then you described. Ask them what color it is and they might say something like no color or metal.

Kindly posted & created by HF member: treasurehoard

_________________________________________________




Paypal is a wonderful thing. However many people have gotten burned by using this payment tool. Here are a few points that I have learned:

1. Do not use paypal to pay for large orders.
Paypal usually seems to work well for purchasing a single pair of jeans on eBay. (Often the sellers will not accept escrow.com or CC directly) However for a $5,000 lot of clothing it is a horrible idea to use it. For example read this: Wholesale411 - goWholesale

2. Drain your paypal account.
It is not recommended keeping money in your paypal account. If a person sends you money with a stolen card your account could be frozen and the funds in your account will not be able to be removed until the situation is resolved (this could take a while)

3. Charge back with my Credit Card
This is the way that I have personally lost money before. I was under the impression that I could do a charge back with my credit card. Paypal informed me that my account would be frozen if I did that. I have heard that many people have had their accounts frozen and even money taken from their bank accounts when they initiated charge backs from their CC.

More information and resources can be found on the site:
PayPalSucks.com is where you will learn about the PayPal Class Action Lawsuit, Abuse, Fraud & evil behind the PayPal system!

Kindly posted & created by HF Programmer: Dave

_____________________________________________


A few other helpful FYI's, regarding doing business with PayPal

1. You should really keep 2 bank accounts. One registered with PayPal, the other not. Move your funds to the first from PayPal, then move those funds to the other bank account. (They can both be at the same bank, only register one of them with PayPal.) That way your money is not at risk.

2. Do not use PayPal for large purchases. Not only does it trigger their fraud detection software, but of course if one of those is bad, you lose a lot of money. (The trigger value was $2500, as of 2002. It might have changed up or down, I don't know the current trigger value.)

3. Be extremely careful with international sales.
If you have any doubt at all, ask them to send cash or money order by courier. Believe it or not, but this method of payment is common for Europeans. Legitimate buyers will not bulk at this requirement, at least on the first sale. Con artists will never respond.

4. If you use PayPal you must be able to prove your sources. PayPal has often requested copies of invoices from your vendors.

Be sure to understand, ALL the information you give to PayPal is not for your benefit. PayPal collects that information to protect it's interests, and it's interests alone. PayPal will never act to protect you.

If you have any credit problems, you probably want to bypass PayPal. They are known to close accounts with "bad credit" on their reports. This varies from person to person, but it's definitely something to consider. PayPal does not run a credit report on every sign up. And this is how people get into trouble. Initially people use Paypal and all is fine. As the business grows, so do the transaction amounts. At some point (It's believed to be about $2000/month or customer complaints) they will run a credit report (also might do a background criminal check also.) and that's when the account gets frozen. Think about how this could effect your business before signing up with paypal.

If you do more than $500/month in sales, you might do better with a real merchant account. The one big advantage of a real merchant account (aside from looking better to the customer) is that in cases of charge backs, you (the merchant) has some real rights and can contest the charge back with "reasonable" evidence. PayPal has very often disregarded it's own ToS. The banks that handle the charge backs are more knowledgeable and reliable when it comes to charge backs and will not honor those obviously fraudulent. (That's not the case with PayPal.)

Be sure to read the former employees articles for more information:
Welcome to NoPayPal, where you will learn the evil behind their system!
Welcome to NoPayPal, where you will learn the evil behind their system!
Welcome to NoPayPal, where you will learn the evil behind their system!

Kindly posted & created by HF member: truthhurts
post #2 of 4
nice good stuff!
post #3 of 4
Thanks! Not enough forums put enough emphasis on this!
post #4 of 4
Good info.
Thanks a lot.
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