It's easy to say that PayPal sucks, but the problem is really not PayPal. I worked in the software end of the credit card business for over five years, mostly on front-end payment processing systems, and have filed a patent claim on an innovation in dispute processing, so this is an area I know quite well.
In the beginning PayPal was really just a simple escrow service for funds. As they started to get a large share of online payments the credit card issuers (who are very powerful, given that 90% of the market of over 1.5 billion credit cards is in the hands of about six banks) began to lobby to bring PayPal under the same regulatory umbrella the issuers have to deal with, namely all the regulations that stem from the Truth in Lending Act and the Fair Credit Reporting Act. As a result of those acts consumers gained a tremendous amount of leverage in credit card transactions. Disputes are approximately a $4 billion a year problem for issuing banks now, and they wanted PayPal to have to deal with the same thing, from a competitive point of view. In response to the costs of this problem issuers have pushed most of the financial responsibility down to the merchant (the same is true for fraud risk, btw).
In a PayPal transaction in which you are the seller, you effectively are the merchant in a card transaction, as far as PayPal is concerned. What this means is that, 90% of the time, you're going to get the shaft in a dispute, just as merchants do on the card side. Most credit card disputes stem from misunderstandings. The _vast_ majority stem from illegible or cryptic merchant descriptions on credit card statements. People see something that bears no relation to the merchant they thought they purchased from, and dispute it. Sometimes the dispute process results in understanding being reached, but more often the merchant just has to eat it. Usually the merchant doesn't even get a chance to argue the point before the money is debited from their account. The money is gone first, and then they have to argue to get it back. So from that perspective you're one up on them.
And then there are people who understand all this and game the system. Your buyer may be one, or may not. It doesn't really matter. There is no way that PayPal could resolve this without pissing off one party or the other. In as much as most of their business is now between professional sellers and consumer buyers, they will allow the law to nudge them in the direction of favoring the buyer, just as the credit card companies do. Anyone using an escrow service to transfer value should understand how they work, and should expect to lose control if a dispute arises. If the 'escrow' service is PayPal or a credit card issuer, and you are the seller, expect to lose.
It's not like there is a better alternative, assuming you can't just drive over to the purchaser's house and shake hands. You're putting the responsibility for signing off on the deal into the hands of an impersonal third party. If _anything_ smells wrong what they are going to do is default to bailing on the whole thing and sending each party their value back. There is really nothing else they can do. If they had to intervene and play Judge Judy to find out where the truth lies (and in fact they do to some extent) - if in other words they had the responsibility of a justice system - then either they would go away or be too expensive, and you'd be back to mailing money orders.
In the beginning PayPal was really just a simple escrow service for funds. As they started to get a large share of online payments the credit card issuers (who are very powerful, given that 90% of the market of over 1.5 billion credit cards is in the hands of about six banks) began to lobby to bring PayPal under the same regulatory umbrella the issuers have to deal with, namely all the regulations that stem from the Truth in Lending Act and the Fair Credit Reporting Act. As a result of those acts consumers gained a tremendous amount of leverage in credit card transactions. Disputes are approximately a $4 billion a year problem for issuing banks now, and they wanted PayPal to have to deal with the same thing, from a competitive point of view. In response to the costs of this problem issuers have pushed most of the financial responsibility down to the merchant (the same is true for fraud risk, btw).
In a PayPal transaction in which you are the seller, you effectively are the merchant in a card transaction, as far as PayPal is concerned. What this means is that, 90% of the time, you're going to get the shaft in a dispute, just as merchants do on the card side. Most credit card disputes stem from misunderstandings. The _vast_ majority stem from illegible or cryptic merchant descriptions on credit card statements. People see something that bears no relation to the merchant they thought they purchased from, and dispute it. Sometimes the dispute process results in understanding being reached, but more often the merchant just has to eat it. Usually the merchant doesn't even get a chance to argue the point before the money is debited from their account. The money is gone first, and then they have to argue to get it back. So from that perspective you're one up on them.
And then there are people who understand all this and game the system. Your buyer may be one, or may not. It doesn't really matter. There is no way that PayPal could resolve this without pissing off one party or the other. In as much as most of their business is now between professional sellers and consumer buyers, they will allow the law to nudge them in the direction of favoring the buyer, just as the credit card companies do. Anyone using an escrow service to transfer value should understand how they work, and should expect to lose control if a dispute arises. If the 'escrow' service is PayPal or a credit card issuer, and you are the seller, expect to lose.
It's not like there is a better alternative, assuming you can't just drive over to the purchaser's house and shake hands. You're putting the responsibility for signing off on the deal into the hands of an impersonal third party. If _anything_ smells wrong what they are going to do is default to bailing on the whole thing and sending each party their value back. There is really nothing else they can do. If they had to intervene and play Judge Judy to find out where the truth lies (and in fact they do to some extent) - if in other words they had the responsibility of a justice system - then either they would go away or be too expensive, and you'd be back to mailing money orders.
Just replying to last.
Even if Paypal refunded him his money, there sre still things you can do. If you send by FedEx or UPS, you get an automatic $100 insurance. the FedEx or UPS rep would contact that person and schedule an appointment to view the package. Most likely the user either threw it away or sent the item back to you in your own packing which means you are out of luck.
You can use this to your advantage though as you can always file small claims like someone else says. If someone did this to me, I think it would be worth a day's vacation to get back at the prick. A judge only weighs the evidence and whomever he believes more will get the dispute resolved in their favor. Since you have before and after pics along with absolutely no proof of a damaged package on his end, he would almost have to rule in our favor. In his house, the eBay feedback and closure of account would matter as would the fact he took so long to dispute. (12 days to see a product is damaged?)
If he does find in your favor, you can collect, and if he believes the other party, then you have a court document saying that a judge believes that the package arrived damaged. if you used the USPS and the judge finds in your favor, then speak with the USPS about filing mail fraud charges. They take that stuff very seriously.
Of course, you may be happy with the $50 credit, so just ignore everything I have said.
Even if Paypal refunded him his money, there sre still things you can do. If you send by FedEx or UPS, you get an automatic $100 insurance. the FedEx or UPS rep would contact that person and schedule an appointment to view the package. Most likely the user either threw it away or sent the item back to you in your own packing which means you are out of luck.
You can use this to your advantage though as you can always file small claims like someone else says. If someone did this to me, I think it would be worth a day's vacation to get back at the prick. A judge only weighs the evidence and whomever he believes more will get the dispute resolved in their favor. Since you have before and after pics along with absolutely no proof of a damaged package on his end, he would almost have to rule in our favor. In his house, the eBay feedback and closure of account would matter as would the fact he took so long to dispute. (12 days to see a product is damaged?)
If he does find in your favor, you can collect, and if he believes the other party, then you have a court document saying that a judge believes that the package arrived damaged. if you used the USPS and the judge finds in your favor, then speak with the USPS about filing mail fraud charges. They take that stuff very seriously.
Of course, you may be happy with the $50 credit, so just ignore everything I have said.
It's perfectly legal to use such a clause in the UK - as long as it is not a retail sale.
Private sales between individuals, and business deals between companies/traders are not covered by the Sale of Goods Act 1979 which contains the clauses regarding fitness for purpose.
Retailers are obliged to ensure that the products they say are fit for the purpose for which they are intended, and that they are of satisfactory quality and durability. E.g. if you buy a £2k plasma TV from a retailer - it comes with a 1 year warranty, and you decline the 5yr extended warranty. The TV breaks down after 18 months. The retailer is legally obliged to repair or replace the TV, on the basis that a £2k plasma TV that only lasts 18 months is not of satisfactory durability.
For private and business transactions, all that is really required is that the description is accurate. So if you advertise a 2nd hand CPU privately on ebay, you can say 'sold as is' - the catch is that if the CPU is dead - then unless your description says that it is dead, then it is inaccurate. If you weren't sure that the CPU worked, then you'd need to state that in the description.
This is common in trade auctions, e.g. for used cars, where it is normal practice for items to be sold 'as is'. It's up to the buyer to check the item description and/or inspect the item for themselves.
This is why I prefer to trade with folks on AT.
You could always start a new ebay account, win an auction of his, and pull the same scam (not recommended, but an idea).
You could always start a new ebay account, win an auction of his, and pull the same scam (not recommended, but an idea).
Hulk
Golden Member
---------------------------------
Thanks for taking the time and effort to post
all this info. I found it very informative.
Golden Member
---------------------------------
Thanks for taking the time and effort to post
all this info. I found it very informative.
I agree PayPal sucks. But here is a story on what happen to my sis-in-law a week ago.
She sold a Nintendo Wii on Ebay. The buyer bought it from her. Paid for it with Paypal. She sent my sis-in-law several emails asking when she would deliver the Wii right after the auction ended. She replied next business day since the auction ended on the weekends.
Well she sent the package USPS Priority with insurance(nice on her part even though the buyer refuse to pay for insurance) and signature comfirmation. The buyer sent her several emails over the next 2 days asking why her package has not shown up- keep in mind priority mail can take 2-3 days(not guranteed) to deliver.
Well the buyer receives her Wii on the 3rd day and files a complaint with PayPal saying she had gotten mail fraud. PayPal sides with the buyer and puts a hold on the funds and starts an investigation. My sis in law had photos, the original sales receipt, USPS shipping recipt with 7.5lbs for package weight. The buyer claimed she had recieved a Wii box filled with rice and it weighed 10bls. WTF...I was at the store when my sis-in-law bought the Wii- she actually bought four. She kept one and sold the other 3 on Ebay. She had sold the first 2 without any problems and received good feedback from her buyers. But it just so happens that on her last one this buyer trys to cheat her. It was maybe because my sis-in-law never sold anything before this and the buyer thought she could take her for a quick one.
Well the buyer sends my sis in law emails threatening to get the police involved and demanded a refund. My sis in law tells her to get the police involve because then she will not only be lying to Ebay and PayPal but to the authorities also. The buyer never responds and never filed a police report which PayPal requires in the case of mail fraud. So case was closed and my sis in law received her money. The buyer then emails my sis in law and tells her not to leave her bad feedback because she already has one strike and didn't want her account to get shutdown. HAHAHA.
I checked over the buyer's feedback and she had perfect feedback(60+) but her last feeback was for the purchase of a Wii at or about the same time that she had bought the other Wii from my sis in law. She paid for this Wii and left good feedback to the seller. So in conclusion she was buying two Wii's- one she would pay for and the other she would try to scam the seller. I asked my self why would anyone pay over $350 each for two Wii's within 2-3days when one is enough at that price. Unless their whole intention was to buy one and get one free. Appearantly Ebay and PayPal didn't realize this.
Well I'm also a seller on Ebay and so far have never experience anything like this but it was good to know how Ebay handles this kind of stuff. I have since added this buyer to my banned ID list on Ebay.
She sold a Nintendo Wii on Ebay. The buyer bought it from her. Paid for it with Paypal. She sent my sis-in-law several emails asking when she would deliver the Wii right after the auction ended. She replied next business day since the auction ended on the weekends.
Well she sent the package USPS Priority with insurance(nice on her part even though the buyer refuse to pay for insurance) and signature comfirmation. The buyer sent her several emails over the next 2 days asking why her package has not shown up- keep in mind priority mail can take 2-3 days(not guranteed) to deliver.
Well the buyer receives her Wii on the 3rd day and files a complaint with PayPal saying she had gotten mail fraud. PayPal sides with the buyer and puts a hold on the funds and starts an investigation. My sis in law had photos, the original sales receipt, USPS shipping recipt with 7.5lbs for package weight. The buyer claimed she had recieved a Wii box filled with rice and it weighed 10bls. WTF...I was at the store when my sis-in-law bought the Wii- she actually bought four. She kept one and sold the other 3 on Ebay. She had sold the first 2 without any problems and received good feedback from her buyers. But it just so happens that on her last one this buyer trys to cheat her. It was maybe because my sis-in-law never sold anything before this and the buyer thought she could take her for a quick one.
Well the buyer sends my sis in law emails threatening to get the police involved and demanded a refund. My sis in law tells her to get the police involve because then she will not only be lying to Ebay and PayPal but to the authorities also. The buyer never responds and never filed a police report which PayPal requires in the case of mail fraud. So case was closed and my sis in law received her money. The buyer then emails my sis in law and tells her not to leave her bad feedback because she already has one strike and didn't want her account to get shutdown. HAHAHA.
I checked over the buyer's feedback and she had perfect feedback(60+) but her last feeback was for the purchase of a Wii at or about the same time that she had bought the other Wii from my sis in law. She paid for this Wii and left good feedback to the seller. So in conclusion she was buying two Wii's- one she would pay for and the other she would try to scam the seller. I asked my self why would anyone pay over $350 each for two Wii's within 2-3days when one is enough at that price. Unless their whole intention was to buy one and get one free. Appearantly Ebay and PayPal didn't realize this.
Well I'm also a seller on Ebay and so far have never experience anything like this but it was good to know how Ebay handles this kind of stuff. I have since added this buyer to my banned ID list on Ebay.
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