Know your rights! Use PayPal's Buyer Protection policy to get your money back in the event that a seller has defrauded you.
Let's say you just found an unbelievable deal for a plasma screen TV on eBay and you pay for it with PayPal. But it's been two weeks and still no TV has been delivered, and the seller doesn't respond to any of your emails.
Or you buy a high-end coffee grinder from eBay, pay with PayPal, and it's shipped to you quickly. But when you plug it in, nothing happens. In fact, upon closer inspection, there is nothing inside the grinder at all: it's just a shell with no parts. You get ahold of the seller, but he is uncooperative.
Fortunately, PayPal can help resolve merchandise disputes. The key is to understand the delicate processes and etiquette involved so that your dispute can be handled quickly and painlessly.
PayPal Buyer Protection uses online dispute resolution to address transaction-related disputes between buyers and sellers. For transactions that are eligible for PayPal Buyer Protection (look for the blue and white shield on the eBay listing), buyers can report a problem with a purchase as long as it's tangible merchandise that has been shipped by a courier that uses online package tracking.
There are two kinds of claims you can file as a buyer:
You did not receive a package.
You received a package, but it is not as described (which includes getting an empty box).
PayPal Buyer Protection Fine Print
To file a PayPal Buyer Protection claim, log in to your PaypPal account, click the Resolution Center tab, and read the instructions. When you're ready, click File a Claim and fill in the information as prompted.
The first thing you'll be asked for is the PayPal Transaction ID, a unique 17-digit code that corresponds to the transaction you're disputing. To find the code, click Get PayPal Transaction ID and then wade through your PayPal history until you've found the transaction. Simply click the code in the Transaction ID column, and PayPal will automatically insert it into the claim form.
Each claim opens a case at PayPal and notifies the seller to respond. Once you have filed a claim, click the Resolution Center tab to check the status of your claim.
Before you transact with a seller, make sure you read the merchandise description carefully for details and disclaimers. If the deal seems too good to be true, beware! A brand new iPod for half the price you'd normally pay should raise a big red flag. (You can also buy a plasma screen TV off the back of a truck in a dim alley.) Great deals can be found online, but don't ignore your common sense.
Always contact the seller before filing a claim; sellers appreciate this and might be willing to work things out to avert the claim going on their PayPal record. (If your neighbor's dog is barking all night, try talking to your neighbor before calling animal control about a rabid dog.) A lot of issues can be resolved with simple communication, leaving both the buyer and seller on good terms.
Allow the seller time to ship the merchandise to you. Sellers are required to ship within seven days to qualify for the Seller Protection Policy, that this does not include the time it might take for the courier to deliver the package. International shipments might take longer, due to customs and fundamental shipping delays. Obviously, filing a claim an hour after you pay makes you appear irrational and only angers your seller. An angry seller will be less likely to be reasonable and responsive to your claim.
Finally, be patient. Instead of contacting PayPal in multiple ways at multiple times, allow the claim process to work. Multiple contacts just add clutter to your case and might actually delay it.
Filing a claim does not necessarily mean that you'll get your money back. As with any online dispute resolution forum, both parties involved in the dispute tell their sides of the story and are asked to submit information to substantiate their statements. Most claims are resolved without any intervention from PayPal at all; for instance, you might cancel your claim after receiving a tracking number from the seller.
PayPal uses a variety of checks and balances to vet the buyer's claims. This might include requiring you to fax a letter of inauthenticity from a third-party dealer on claims for counterfeit goods or fax a police report for higher-priced merchandise.
"Not as described" claims are handled on a case-by-case basis because there are millions of items that change hands every day, and it's impossible to generalize about the meaning: a scratch on a priceless violin cannot be compared to a scratch on a Frisbee©.
If it's an eBay item, the original eBay listing is the main decision factor: what exactly did the seller advertise? Only claims for significantly "not as described" merchandise will be granted. (If a shirt is light blue instead of dark blue, you'll probably be denied a refund.)
In almost all cases, a buyer has to return (at her own expense) the significantly not-as-described merchandise to the seller before getting a refund. Buyers do not get to keep both the item and the money.
Although PayPal might find that you're due a refund, PayPal never draws money from a seller's bank account or credit card without the seller's permission (this would be considered an unauthorized transaction and is therefore illegal). PayPal might not be perfect (in some people's opinions), but they're not stupid. For this reason, don't dawdle when it comes to filing Buyer Protection claims.
If a seller's PayPal balance has insufficient funds to complete a refund, the PayPal account balance will become negative as soon as the buyer has been refunded and the acouunt might be limited. See [Hack #5] for more information on what you can do if your account has been limited.
Even if a buyer's claim is denied, there is a record of every claim on the seller's account. Sellers with a high claim rate quickly trigger investigation by PayPal. Fraudulent sellers have been taken to court, convicted, heavily fined, put in jail, and blacklisted. Every now and then, you'll read about these cases in the newspaper.
If you made your purchase on eBay, you can also check out eBay's Security Center to read about ways to protect yourself. In 2003 or earlier, eBay might have paid you under their $200 ($25 processing fee) purchase protection program, but now that eBay and PayPal are one company, there is sufficient coordination such that you'll be directed to the right place to file a claim. If your purchase was paid for with PayPal, eBay will ask you to work with PayPal to get your money back. For other issues, you will find various forms in the Security Center to report sellers asking for additional money after the listing ends, suspended sellers selling under another ID, sellers abusing feedback, and so on. In addition to getting your money back from PayPal, you can alert eBay to problem sellers.