PayPal Buyer Protection vs PayPal Buyer Complaint Process

Posted on May 4, 2009. Filed under: Paypal | Tags: , , |

Beginning April 8, 2009 buyers who use PayPal for an internet purchase and have a problem with their transaction are being treated very differently now depending on WHERE they purchased the item.  Buyers who use PayPal for their eBay purchase will be covered quite extensively no matter how they funded their purchase.  However, ecommerce buyers who purchase from any other non-eBay venue where third party sellers offer their wares, such as Bonanzle or Etsy, or from any individually-owned (including corporate) websites will have very little consumer  protection unless the payment is funded with a credit card which affords the buyer the opportunity to chargeback their purchase.

Of course, there are a great many implications.  Ecommerce buyers who use PayPal for internet purchases could experience greater fraudulent transactions and poorer customer service on non-eBay venues and ecommerce websites once sellers become aware that SNAD complaints have no real bite.  Buyers may end up trusting the other sites less but, also, as a result these ecommerce buyers may also trust PayPal less as well.  And ecommerce buyers who use PayPal will be less willing to fund their PayPal purchases with anything other than a credit card which, in turn, will increase PayPal’s transaction costs.  The number of chargebacks PayPal experiences will alsmost surely rise as well.

It is understandable why PayPal made the changes.  PayPal provides buyer protection on eBay because eBay can suspend any seller who does not perform to an established set of standards.  And with their Buyer Complaint Policy for non-eBay purchases, rather than Buyer Protection Policy, PayPal is now more in line with other payment processing services who do not provide guarantees or protections for the websites that accept the various payment methods. 

While it makes sense that PayPal would make this change, I think PayPal has failed to inform and educate users.  It is true that PayPal listed this change in their policy updates along with several other pages of policy updates but I don’t think it is nearly enough.  I really think PayPal account holders should have been sent an email explaining this very important change in protection.  Instead, some PayPal users are shocked to learn of the new policy only AFTER they experience a problem with a transaction.   

To help better explain the differences, I have copied / pasted from the PayPal help pages and policy pages the following information about PayPal Buyer Protection and PayPal Buyer Complaint Policy:

Paypal Buyer Protection

PayPal Buyer Protection is a policy that can provide purchase protection for buyers on eBay.  It helps eligible buyers recover funds from eBay sellers who do not deliver the promised goods, or who deliver goods that are significantly not as described in the listing.  Eligible buyers may, at PayPal’s sole discretion, receive a payment from PayPal or have funds recovered from sellers.  The policy applies to transactions on eligible eBay websites and protects payments for most tangible, physical goods that can be shipped.  Payments for intangibles, services, licenses, and other access to digital content are not protected.

Paypal Buyer Complaint Policy

It is PayPal’s process to help you resolve a problem directly with the seller through the PayPal Resolution Center for purchases that are not eligible for PayPal Buyer Protection.

The PayPal Buyer Complaint Policy is similar to PayPal Buyer Protection in that it enables buyers to file Disputes for Items Not Received (INR), or for items that are Significantly Not as Described (SNAD).  By filing a Dispute, you can communicate with the seller and attempt to resolve the problem.  If you are unable to resolve the problem, you may escalate an Item Not Receive (INR) Dispute to a Claim – but you may not escalate a Significantly Not as Described Dispute to a Claim.

Even though you may escalate an Item Not Received Dispute to a Claim, you are not guaranteed recovery. If the Claim is decided in your favor, your recovery is limited to the amounts that PayPal can recover from the seller’s Account.

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8 Responses to “PayPal Buyer Protection vs PayPal Buyer Complaint Process”

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PayPal is NOT on your side for foreign transactions. Their policy is to release funds from their account to the Seller as soon as the Seller provides shipping or tracking numbers. The problem is, is that the shippers also are in bed with the Seller, therefore the shipment is never made and the money is gone!

PayPal should change their policy to NOT distribute funds unless they either have a third party verify all shipping documents or until the product is signed for by the Buyer. Otherwise, just kiss your money goodbye.

On April 23, 2009 I purchased a Sharp LCD 65 inch TV from Mirota-Shop out of Indonesia. Their website is and is located on several search websites. I called PayPal before ordering and they informed me this company had been with them a long time and had many orders filled in the price range of mine, $2,900.00 US, and that they had no complaints. I sent money to PayPal and the seller, Andrea Thenavi, who sent me a link to Buana Cargo (Express) who was supposedly transporting the TV to my home in California. I followed the voyage via Buana’s website and tracking number. When it supposedly arrived in Oceanside, my hometown, after about 7 days travel (which was rather quick) it was listed as delivered. Of course, I did not receive it yet. I emailed the seller and the cargo company and neither would respond, so I filed a complaint with PayPal. After 30 days of dickering with them, they informed me that the seller never responded to any of their email requests and that they ruled in my favor. However, the seller had no money in their account to retract for me. Now my only revenge is to make it known that the Mirota Shop is a scam outfit and PayPal cannot and will not protect the consumer.

Jl. H. Zainul Arifin No. 7, Level 2. Medan, Indonesia 20111
Phone: 011-617-697-9630 , Fax: 617-697-9629 , Hotline: 081-962-8364
Also: 011-62-061-303-94290
Order : Payment :
Andrea Thenavi and Dika Prima

Unwinding Ebay / Paypal

Ebay programmatically suspends user accounts and freezes paypal funds while researching “suspected” issues. Ebay owns 100% of Paypal. Paypal funds are frozen for around 21 days with Paypal and Ebay earning interest on the funds earned by sellers.

Ebay now offers no telephone support for issues.

Ebay business processes and lack of customer support have impacted many customers. A successful class action lawsuit was filed against Paypal in 2003 for frozen funds. A similar class action lawsuit is likely in 2009.

Recommendation: Abandon Ebay and Paypal
Use: Amazon or Google Checkout

I have recently had a SNAD claim refused, and I am outraged given that I have £200 worth of rubbish from a dishonest seller, it did seem possible to raise SNAD to a claim, I have been given no reason why it has been refused, simply a very automated, no reply email saying not found in my favour. I am unlikely to use paypal again.

Have you had a bad experience with paypal ?


Do you have a paypal horror story?

Then we would like to know.

Hello, i have few addresses on my EBay / PayPal account.
Recently i bought 2 items from different Sellers (Seller1 and Seller2).
When i got to the payment page – the system bundled both payments into one transaction…
If you look at attached image “email to” field – you will see that Seller2’s email address is assigned also to Seller1 (!) part of document [this is bug#1].
That means that Seller1 will never receive payment notification – where my selected ship to address is provided.
Seller1 had to request PayPal for my shipping address. PayPal’s software system retrieved incorrect address (my second address) [this is bug #2] and item was shipped there – i discovered all this 2 weeks after item has been sent… Result – item was lost or stolen. The horrible thing is – UPS has proof of delivery!
PayPal rejects my claims – because item was delivered. The Seller has proof of delivery. The case is closed… I lost 248.50 $ and no item…
I called to PayPal and tried to explain that item was shipped to the wrong address – they ignore it…
I opened a case with PayPal technical support team about bug #1, sent them image with highlighted problem – and recieved from them a response (you will laugh):

> To access your question from our support site, click here.
> * Subject*
> Multiple payments in one transaction – email sent to the wrong seller
> * Discussion Thread* * Response (Jeremy B)* 12/16/2009 06:21 AM Hi
> Marina,
> I looked at the emails a few times and had one of my colleagues look at it,
> the emails addresses are the same. Where do you see the discrepancy?

I had to expain them again and again before they understood what is about… Do you think they admitted it??? They said that inside of their software it worked… but surprisingly they escalated it to developers…
PayPal’s software is full of bugs – unacceptable for ecommerce business…
I would be very glad to participate against PayPal.


I have escalated many SNAD to a Claim, what are you talking about?

PayPal’s insistance that Buyers PAY to return goods that are SNAD (even when the Seller is obliged to pay for returns under the Distance Selling Regulations) is simply immoral. Not only that – but they insist on it being a tracked, therefore expensive, method. If goods are sent back UNtracked, and the Seller says that they have not arrived, then PayPal refuses to look at any other evidence that they are probably lying. PayPal have made me physically ILL with stress by giving unfair judgements time after time. Their Customer Service sends curt, intgransigent emails and the phone service, here in the UK, is impossible (and expensive – why no free line like Ebay?) to use. Ebay even told ME to ‘Clarify the Distance Selling Regulations to PayPal’! Why should I? Surely it’s up to Ebay to make sure that PayPal are in line with their ways of working before they force PayPal on us?

After 3 months from winning an Ebay bid for a coin coming from Germany, it never arrived in the USA and seller is unwilling to assist in an international tracking (which only the seller can do per USPS and Deutsche Post regulations). PayPal says that seller has provided them with proof of shipping, although the shipment is still in Germany in the Deutsche Post International Logistics Center. PayPal said that their agreement with Germany does not require any proof of receipt, only proof of shipping, so would not rule in my favor in my claim for reimbursement of an item not received. Nowhere in the PayPal Agreement does it caution sellers that certain international agreements cancel out the Buyers Protection part of the PayPal published Agreement. PayPal will not provide me with any proof of shipping besides the tracking number and I cannot initiate the International Investigation Report to track this item. I have no proof that the shipping address the seller used was correct; even if it contained a transposed number or misspelled word, apparently I am responsible for non-receipt.

In many conversations with PayPal representatives, I have brought to their attention that international purchase exemptions are not listed in their agreement, which many of PayPal’s representatives acknowledge having heard before from buyers in my situation but that management has not changed the terms of the agreement to reflect these kind of international exemptions.

From reading Richard F’s June 19th, 2009 post, this situation has not changed in spite of having been brought to the attention of the PayPal Dispute Resolution Department. Because my seller answered the requests but did not follow through on providing me with any proof of tracking on their end, PayPal decided that the seller fulfilled his obligation by giving PayPal some kind of tracking number.

My seller in Germany goes by the Ebay identification name of “Buzdans” and is someone by the name of [personal info deleted]. I would caution buyers to be aware of the high risk when dealing in international sales as PayPal failed to protect this buyers’ interests for non-receipt.

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