Provide an Honest Service? Beware Selling it With Paypal!

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I’ve been scammed a couple times on eBay.  Ultimately, I cancelled my eBay sellers account and haven’t sold anything there in years.  I continued to use Paypal for its convenience, despite the heavy fees.  I wrongly assumed this paid for their service in the event of a dispute.  I was very, very wrong.  Paypal’s own community clearly demonstrates the thousands of scams, many seemingly perpetrated with Paypal’s defacto support.

If you provide any service to a buyer, be wary of using Paypal to accept payments, especially using automatic renewals with their pre-approved payments system.   This system is nothing more than a way for buyers to use your services for free.  As I discovered recently, Paypal doesn’t even adhere to its own User Agreement for disputes of this type.  A dishonest buyer can claim any or all of their previous subscription payments were “unauthorized”.  They simply say the seller took the funds from their account without their knowledge (which isn’t even possible in general), or someone hacked their account, or whatever.

The worst part is that Paypal doesn’t let the seller provide any proof to the contrary or investigate at all.  I had proof in my recent case.  Their Resolution Center says it gives you an option to upload files and comments when you Respond to the case, but in my case, it only gave me options to refund or ship.  They refuse to accept such information by email or phone support.  Their email support is dismal, anyway.  The representatives apparently cannot read or understand English, and can only respond to you with generic pre-made responses.

In my case, the dispute was for a transaction that didn’t qualify for a dispute according to Paypal’s own terms.  I was finally able to call and get a fax number where I sent my response, twice.  They ignored it.  At the end of the response period, they sent me an email claiming I had failed to respond in the given time.  One minute later, they sent another email saying they had completed their “investigation” and deducted the funds from my account.

Fortunately, it was a trivial amount.  In fact, I had already refunded one of the two disputed preapproved payments as a one-time exception to the clearly stated no-refund policy.  I was going to refund the other one too, just for goodwill.   Perhaps the buyer didn’t notice that they had chosen the automatically renewing option.  Maybe they didn’t see the renewal email notices or forgot to cancel it.  Maybe they were just a basic thief and wanted to use a paid service for free.  It doesn’t really matter when you are the seller and have honestly provided your service for a fee.

But Paypal’s involvement (or lack thereof) was a good lesson in all of this.  Even for transactions over 6 months old, they will freeze your funds and not allow you to provide evidence.  If you are accepting a large sum for a service, BE VERY WARY OF PAYPAL.  There are plenty of other reputable payment systems today.  Based on my experience, if it’s not a tangible item, Paypal will apparently automatically refund your fairly earned money, even if it means ignoring their own User Agreement.

I will no longer pay the big Paypal fees on larger sums.  I am curtailing my use of Paypal to avoid any sales on non-tangible items like services, if at all possible.  I suppose it’s pretty safe to use Paypal as a buyer if you are cautious, especially on items that qualify for buyer protection.  That is my opinion based on recent experience, anyway.  Let the seller beware!

3 Comments

  1. CPSDarren May 20, 2015
  2. CPSDarren February 6, 2015
  3. Maggie December 14, 2014