PayPal Buyer Protection vs PayPal Buyer Complaint Process
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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