posted on May 31, 2000 08:54:43 AM new
I worked at a major credit card company for years and I was in fact a trainer for the dispute area. The fact is this, What did I buy from paypal? Cash. Was the cash sent where I wanted it to go? Yes. But I did not get my stuff? You got the cash from paypal and as such they have made good. No chargeback sorry. You cannot chargeback your cash to the store you cashed your check at if the person you gave it to did not give you your item. The bottom line her is paypal is great and gives all of us buyer and seller a great fast way to transfer money. Read feedback and be smart and you will be fine. We all know that sometimes things go wrong. Thats life. I use paypal and I have never had a problem.
[ edited by winonme on May 31, 2000 09:05 AM ]
posted on May 31, 2000 09:55:42 AM newI worked at a major credit card company for years and I was in fact a trainer for the dispute area. The fact is this, What did I buy from paypal? Cash.
In the story described, you did not get cash. In fact, just to be very clear, you got nothing.
posted on May 31, 2000 12:21:09 PM new
"...why this question is relevant in context?"
I'm trying to argue that PayPal doesn't 'stick it to scammed buyers' any more than the other options listed, if you feel different please tell me which is the safest of the 4 and why.
posted on May 31, 2000 12:47:11 PM new
I think SG raises a very interesting question here. My credit card agreement states that I can dispute a charge if an item I order is not received or it's defective, etc.
The question is: What happens when the credit card company approaches Paypal and says: "We're taking back these funds because the purchaser did not get their widget."
To which Paypal says: "They didn't buy the widget from us, they bought cash, they bought a transaction which we completed, so therefore the dispute is bogus."
Will the credit card company come back to the customer and say, "Sorry Charlie, you bought cash/a transaction and got what you paid for. Dispute denied." Or will they reverse it.
I think it's something that remains to be seen when it actually happens.
What any of that has to do with which is the best method for paying for an auction I have no idea.
According to a few posts here, one by the kramerfamily I believe, your credit card company gets the money back from paypal, but then paypal locks YOU out of your account (actually they call it freezing) until they settle the dispute.
It will of course vary somewhat from one card issuer to the next, but in my experience card issuers are unlikely to go to the level of detail of analyzing a User Agreement to decide whether the buyer purchased a widget or purchased funds for a widget. Either the merchant provides some type of evidence that the buyer did receive the widget and/or didn't return the widget, or the card issuer will reverse the charge.
The fact that PayPal's Terms of Use refer to several options they may take to recover charged back funds suggests strongly that they realize most card issuers will agree to return the funds to the buyer.
posted on May 31, 2000 02:22:16 PM newTo which Paypal says: "They didn't buy the widget from us, they bought cash, they bought a transaction which we completed, so therefore the dispute is bogus."
What if a random crook said that?
If it were that easy, every mail order merchant in the country would be set up to never sell anything but "cash which you can spend over in our cash-only store".
The point is, it flat doesn't matter what PayPal says to the credit card company. The credit card company will give buyer's money back. By federal law the credit card company will give buyer's money back.
This isn't the question at all. The question involves what PayPal does next.
posted on May 31, 2000 09:15:54 PM new
I've been watching this thread with great interest! The fact is, folks, that by registering with PayPal, you give them free access to your money (from your PayPal account, your credit card, or even your bank account!).
As I said in my posting of 5/21 ("PayPal problems? Try THIS one--":
"The moral of the story? I guess it would be to trust no one with access to your credit card account, especially a company promising to provide a "free" service."
When PayPal tells you to contact your credit card card company to seek a refund, and then steals your money when you do just that, there's something verrrrrrry wrong with the way they do business.....
posted on June 1, 2000 04:31:01 AM new
Ok, Here is what would go on if you bought a car off ebay and you used Paypal to pay for it and did not get it. You call your credit card company and say I did not get it. You fill out the information they need and they do whats called a chargeback reason code 90. When Paypal gets it the would send back information that you did not buy car from them you bought a money transfer. Your creditcard company would then send it to you and say no dice. Now understand one thing. The best place to use your credit card is online, you lose a lot of your chargeback rights in a face to face transaction. To the question what would I use. Paypal, reason is this is fast and odds are if I am smart I will be fine. If it was a high dollar amount like over $500.00 I would not do it unless they had good feedback. Be smart and never worry about your card on the net. P.S. A credit card company does not call transactions over the net fraud very often. It is very very rare that they will. Fraud is only when the card is given in a face to face transaction. Oh and the question about you could always say you never got it and never have to pay from a online store. Thats true. People did it all the time but that does not make it right. Thats makes you no better than the people you all say do not send you the stuff you buy. ALWAYS USE VISA!
[ edited by winonme on Jun 1, 2000 04:38 AM ]
[ edited by winonme on Jun 1, 2000 09:04 AM ]
posted on June 1, 2000 12:04:34 PM newWhen Paypal gets it the would send back information that you did not buy car from them you bought a money transfer. Your creditcard company would then send it to you and say no dice.
This is simply incorrect.
What really does happen is slightly more complicated, but the net result has zero chance that the buyer won't get the money back.
Seller does not define what buyer bought in such a circumstance, and even if seller produced evidence that buyer knew exactly what was going on and agreed to whatever seller says, when buyer receives nothing, buyer by law is entitled to an elimination of the charge.
Conceptual analysis cannot support a claim that buyer received something when buyer received nothing.
posted on June 1, 2000 05:49:06 PM newI'm trying to argue that PayPal doesn't 'stick it to scammed buyers' any more than the other options listed
I don't believe that the other options you described have much protection from being scammed.
Payment by credit card has such protection, by federal law. That's better for the buyer.
Near as we can tell however, PayPal will punish one for using such protection and collect the money back if they can. That seems bad for the buyer.
So if you're arguing that buyer having choice between a PayPal fight or being scammed is better than just being scammed, I'll agree that you're correct. Was that your point?
posted on June 1, 2000 06:31:59 PM new
"Payment by credit card has such protection, by federal law. That's better for the buyer"
That's a broad statement, can you be more specific? My credit cards both have a disclaimer on the statement page.
*If you have a problem with the quality of goods or services that you purchased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may not have to pay the remaining ammount due on the goods or services. You have this protection only when the purchase price was more than $50 and the purchase was made in your home state or within 100 miles of your mailing address(if we own or operate the merchant, or if we mailed you the advertisement for the property or services, all purchases are covered regardless of amount or location of purchased*
I've got more than one credit card and they all make the same disclaimer on them. Is there a federal law that comes into play if I purchase a $10.00 item on eBay that doesn't come or meet my expectation?
Credit cards are great, just ask my wife, but they don't cure cancer, and you can still lose money with them.
PayPal offers me the ability to purchase an item quickly that normally would have required a money order or a cashier's check, I'm a bit lazy at times, so it really hits the spot. I don't understand how a 737 works, yet I'll gotten in one every week for years and trusted it with my life. PayPal isn't going to break me if it folds, and in the meantime it's damn convienient, and I take a bit of consolation that about 2 million other people have used the system. If I'm way out of bounds using such a system then I've got a lot of company, so I'll be okay if somewhere down the road I hear an "I told you so".
posted on June 1, 2000 07:37:25 PM new"Payment by credit card has such protection, by federal law. That's better for the buyer"
That's a broad statement, can you be more specific?
How much more specific can one get?
Ok, if you prefer, "On all transactions which do not involve the physical presentation of the buyer's card, this protection is absolute. It cannot be compromised by anything the charging merchant says or does. It is not mitigated by a $50 deductible"
Secondarily, that $50 deductible and/or physical location stuff has not ever been enforced in my experience, and recently I've read that it is being formally dropped by most credit card agreements. To repeat the primary statement, none of this has ever bound buyers whose cards are not physically presented to the charging merchant.
There's a reason why credit card companies never enforced that kind of stuff: they just take the money back from the merchant. They don't lose at all, beyond the not insignificant hassle of processing the chargeback.
posted on June 1, 2000 10:35:52 PM new"Payment by credit card has such protection, by federal law. That's better for the buyer"
That's a broad statement, can you be more specific?
Title 15 of the United States Code
Section 1666
This section involves "Correction of billing errors" and defines "billing errors" to include (among other things): "(3) A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction."
Note also the following excerpt from this section, which is very important to this discussion:
"In the case of a billing error where the obligor alleges that the creditor's billing statement reflects goods not delivered to the obligor or his designee in accordance with the agreement made at the time of the transaction, a creditor may not construe such amount to be correctly shown unless he determines that such goods were actually delivered, mailed, or otherwise sent to the obligor and provides the obligor with a statement of such determination."
Note that it says unless ... such goods were actually delivered, mailed, or otherwise sent [u]to the obligor[/u].
By Federal Law, the credit issuer doesn't have the option of saying "sorry, you didn't really buy a widget, you just bought money to pay for a widget". Since the obligor alleges the charge to reflect "goods not delivered", the only way the credit issuer is allowed to not correct the billing error is by showing that "such goods were actually delivered, mailed, or otherwise sent to the obligor".
posted on June 2, 2000 01:04:05 AM new
I agree that PayPal is not charging your credit card for the auction item, they are charging your card for MONEY to be placed in your PayPal account (without normal credit card "cash advance" fees, by the way), which you direct them to put into SOMEONE ELSE'S account for WHATEVER PURPOSE you so choose. You can send your mother money for her birthday, pay off a personal debt, or buy something from another PayPal user (including online auction transactions as well as transactions originating on small business websites, "classifieds" and "wanted" boards). All PayPal has done is get the money into your account through your credit card charge (or bank account).
I also agree that the vast majority of people will expect the charge to be removed from their credit card statement if the item purchased never arrives or is otherwise unsatisfactory, and they can't get the seller to refund their money.
You better believe that the heavy investors behind PayPal and X.com were FULLY AWARE of the federal and state CREDIT CARD LAWS in effect when they started their services. But it may be necessary for a new federal law to be written to address just such issues.
The analogy to BidPay is a good one, and I can't really see a difference between the two. Both charge your credit card and "send" (whether money order or account transfers) someone the amount of money that you direct them to pay. Neither has any control over what the recipient of your funds DOES for you in return, they're just making it easier for you to pay them.
I agree with winonme except for one HUGE difference. If I bought a car on ebay (or anything else over about $200), I would NOT use PayPal (or a check, money order, cashier's check, traveler's check, cash, BidPay, PayPlace or E-Count) REGARDLESS of the seller's feedback, unless I had a personal trust in them from previous purchases. I would use I-Escrow or have it shipped COD (or pay when picking it up, in the case of a car), so that the seller couldn't have my money until I was satisfied with the purchase.
There are many, many more dishonest sellers (not just "scammers" who never deliver goods at all) on the auctions than you realize. People who lie about size, grade, age, quality, model number, composition and content, condition/flaws/damage/repairs, missing parts, etc. are selling in EVERY category on EVERY large auction.
posted on June 2, 2000 06:15:35 AM newI agree that PayPal is not charging your credit card for the auction item, they are charging your card for MONEY to be placed in your PayPal account (without normal credit card "cash advance" fees, by the way), which you direct them to put into SOMEONE ELSE'S account for WHATEVER PURPOSE you so choose. You can send your mother money for her birthday, pay off a personal debt, or buy something from another PayPal user
This is just flat out wrong.
There is no way to Add Funds to your account with a credit card. Click on the Add Funds link under your account and you'll see that it requires either an Electronic Funds Transfer or a Personal Check.
The only thing you can do with a credit card is to beam money to a specific account.
You better believe that the heavy investors behind PayPal and X.com were FULLY AWARE of the federal and state CREDIT CARD LAWS in effect when they started their services.
I think so too. Which is why instead of simply saying "no chargebacks" and leaving it at that (knowing they couldn't enforce that or rely on it to protect themselves or their incredibly low profit-margin from chargebacks), they also put in place several potential recourses they may take when people do (validly and legally, in my opinion) charge back purchases.
Pure and simple, PayPal is allowing buyers to pay sellers with credit cards. This is fundamentally no different than the merchant account your bank will set up for you, except your bank doesn't try to tell your customers "Sorry, you didn't buy a widget, you bought funds from us that were used to pay the seller for the widget."
posted on June 3, 2000 06:05:24 PM new
"But near as I can see, they've stayed at least a ten foot pole away from this topic"
I don't blame them, they have their terms in B&W. Debating policy doesn't seem fruitful and I'd be disappointed in PayPal if they tried.
I've come around to your thinking though, I tell the sellers "No thanks, let me pay for a money order and mail it to you, sg52 has convinced me I was doing things the wrong way before".
You can claim a victory, you've converted me from nasty old PayPal and I'm back in lines to purchase money orders.
posted on June 4, 2000 11:54:24 AM newuaru I've never suggested that anyone avoid PayPal.
I've observed that PayPal seems to be sticking it to scammed buyers.
I've suggested that if this business model becomes common that laws may change to protect buyers from such business practice.
I've implied that scammed buyers should consider a class action lawsuit.
I've tried to keep the discussion focussed on what is wrong rather than irrelevant sidetracks. Whether PayPal is or is not better than some alternative is one only such sidetrack.
uaru can you explain to us your association with PayPal?
It seems fair: I sg52 have absolutely no association with PayPal, Billpoint, or any other competitive service. I do have a normal credit card merchant account, but do not accept eBay payment through that merchant account.
posted on June 4, 2000 03:36:24 PM new
sg52, when I first looked into paypal I decided that it sounded great for me as a seller, and in some cases possibly as a buyer or to transfer funds to other friends or family BUT that does not mean that I agree that PayPal sticks it to scammed buyers. I hope no one gets scammed by sellers using paypal but if they do how can anyone expect paypal to be at fault because of it. Just because a charge charge may have been used to fund their paypal account?
Maybe they received payments from other paypal users and never registered a credit card. Those kind of users could get scammed also.
If I am making a purchase that I want to be able to prove I sent funds for, I use a personal check as I will have my copy back of the signed and cashed check. If it is a bigger purchase I would use a credit card or not buy it online. If it was a high feedback seller and a low amount, I would use paypal just like in the past I may have used a money order to speed up shipment. That is me, yet bidders send me large money orders and even cash in the mail so like I said, I love paypal as a seller and I hope it continues to be accepted and free.
Anyone that is worried about being able to charge back AFTER beaming money to someone Should NOT use paypal IMO.
posted on June 4, 2000 04:40:21 PM newJust because a charge charge may have been used to fund their paypal account?
I guess you missed it back in the thread, kimbo. PayPal will not allow that. The only thing you can do with a credit card charge is buy something.
Maybe they received payments from other paypal users and never registered a credit card. Those kind of users could get scammed also.
Those aren't the users under discussion; by definition such buyers couldn't dispute the PayPal charge on their card, because PayPal didn't charge their card. They have no expectation of the protection offered by federal law to credit card users.
The discussion regards buyers whose credit cards are charged by PayPal but receive nothing in return for that charge.
posted on June 4, 2000 05:34:32 PM new
"uaru can you explain to us your association with PayPal?"
I have an account with them, I also have an account with x.com. I don't work for them in anyway other than endorse their service based on my personal experiences.
I'd love to debate the matter with you but I've lost complete interest in it. It seems to have become a play on words and I've surrendered to disputing you your views on the service.
For me I find it an excellent alternative to sending a money order or personal check without a charge, at the speed of light, and with the same protections, but that's just me.
posted on June 5, 2000 09:30:35 AM new
Ok.last time and this is what happens, I KNOW! I HAVE BEEN DOING IT FOR THE LAST 2 YEARS! You have chargeback rights under chargeback reasoncode 54 claim or defense but it is very week and very rare that you win. You have rights now under 53 that help a lot more. The bottom line on all of this is Paypal did do its job as it paid the peron you wanted paid. End of dispute as far as the credit card company goes. This is a fact and is true to the bone. Like it or not this is the way it is. You could not chargeback Paypal and win if you told your credit card company the truth. Call and ask them. Ask them if you could do chargeback reason code 90 on paypal if you do not get your stuff from a third party. Answer is no. Sorry. Paypal is a faster money order. THE END
posted on June 5, 2000 10:42:10 AM newThe bottom line on all of this is Paypal did do its job as it paid the peron you wanted paid. End of dispute as far as the credit card company goes. This is a fact and is true to the bone. Like it or not this is the way it is.
Wow, that sure sounds convincing.
However, that doesn't explain, if credit card companies won't charge back these purchases, why PayPal reserves the right to recover chargedback funds from their users and to lock them out of their accounts.
It doesn't explain why users have posted to say that they were locked out when they successfully charged back a PayPal purchase.
It doesn't explain why a PayPal representative said they will lock out users who charge back purchases.
And, lastly, it contradicts the section of the United States Code (posted previously) that says credit card users are entitled to charge back purchases when they do not receive merchandise, unless the card issuer can show that they did receive the merchandise.
posted on June 5, 2000 03:46:33 PM newAsk them if you could do chargeback reason code 90 on paypal if you do not get your stuff from a third party.
Better idea: don't ask them anything. Just say you didn't get your stuff.
The idea that such a claim is weak is inconsistent with both federal law and credit card company practice.
I've got a plan, winonme. You're convinced of your position. I'm convinced of mine. How about we each put up $1000. We'll do a test. I'll submit a nothing receved dispute against PayPal (say $25). If I get my money back, I get your $1000. If PayPal wins, you get my $1000. In either case, I'll give PayPal back their chargeback+$50 extra.
Ok?
sg52, looking forward to being on the winning side of a chargeback for a change.
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