When Buyer Protection Isn't - When You Shouldn't Use PayPal
If you use PayPal to buy on eBay, you get some guarantees. We won't go into that here but rather look at purchases made via PayPal outside of eBay.
You might come across two problems with an order - the goods might not arrive, or they may not be what you ordered.
Outside of eBay, PayPal says it offers protection only for physical goods and only for goods that have not been delivered. However, that protection is suspect.
It's vitally important to note that there is no protection if the goods are "Significantly not as described". More of this in a moment.
Foregone conclusion
If you're unhappy with a purchase and can't get any satisfaction from the seller, you can open a Dispute with the seller via PayPal and escalate this to a Claim if you can't reach a satisfactory agreement.
However, do note that if you are claiming because the seller did not send what you ordered, if you can't reach an agreement via the Dispute system and escalate the Dispute into a Claim, you will get an automatic message from PayPal saying that they cannot support your claim because goods were delivered. It's irrelevant what the goods actually were...
Yes, read that again. In effect, if you order a TV set and the seller sends you a video tape, PayPal will not help because: "Claims for items that are 'Significantly not as described' will not be covered".
So effectively, the only reason to open a Dispute is if the seller is not responding to your contact, and you do so in the vain hope that PayPal's Dispute system will force them to talk to you. However, the seller is safe in the knowledge that whatever happens, PayPal is not going to find against them and reclaim your money.
Non Delivery
Far better if the goods are not delivered at all. Or so you'd think. At least PayPal says it will attempt to recover your money – providing the seller has enough money in their account. And you will still have to prove your case.
If the seller's delivery method requires a signature on delivery this shouldn't be too difficult. If it doesn't, you're on your own. In any event, you're not guaranteed to get a refund.
Testing T&C
PayPal's T&C are on their website but we wanted to clarify Buyer Protection outside of eBay. After no less than eight email exchanges trying to get a definitive statement on the situation, this is the best they could offer:
"PayPal do not guarantee full refund for a non-eBay items filed for non-receipt claim. The refund is in best-effort basis.
"But for not as described claim, PayPal is not able to investigate the case since we are unable to check the pre and post listing of the item."
Apart from the dubious English, you get the drift.
Admission not admitted
Now, in once specific case (The Great Battery Swindle) the seller admitted sending the incorrect item. You'd think that would remove any problems PayPal might have about being "unable to check the pre and post listing of the item." But you'd be wrong. In eight emails, they never explained why, since the obstacle to their objection did not exist, they were unable to intervene.
You should get considerably better protection from a good credit card company who is jointly responsible for the sale along with the vendor. PayPal is not.
Now this is no reason to stop using PayPal. However, our view is that while it's fine for small purchases, think twice before using it for anything of value.
See if the seller has an alternative method of payment. If not, ask yourself why not? (Click here for details of one area you should be very wary about)
There are many alternatives to PayPal so you might want to suggest that sellers offer choices for payment. And if they don't, ask yourself if the risk is worth saving a few pennies.
If you're a seller, you may have an even tougher time if PayPal decides to freeze your account. Unlike a normal bank they are judge jury and, ultimately, keeper of your cash!
And whatever you do, do not link your main bank account to your PayPal Account. Better yet, don't link it to any bank account.
Although PayPal is a very useful way to buy goods over the internet, be aware of what might happen if things don't go according to plan.
