posted on June 6, 2000 09:59:52 AM new
Maybe the old thread had too inflammatory a title for PayPal to answer.
So here's a new one, trying to be purely factual, in an offering for PayPal to explain what they really do.
The hypothetical facts:
1. Buyer buys something on eBay.
2. Buyer pays for item, using PayPal and
a credit card.
3. Nothing comes. Seller turns out to have been a scammer.
4. Buyer disputes the charge on credit card, excercising rights granted by federal law; credit card company refunds buyer's payment.
Now, according to some reports, PayPal both will and has
-locked buyer's PayPal account
-taken any money which may have been in buyer's account to satisfy the disputed charge
-taken money directly from buyer's bank account, should buyer have allowed that (for other purposes, or imagining that money would only be deposited, never removed).
So PayPal, can you explain what you actually do under these circumstances?
posted on June 8, 2000 11:12:27 AM new
sg52, I'm not sure if I can help, but if you will tell me what part of this you don't understand I'll try.
"12. If you are a Sender, you agree that all payments initiated by you in which charges are made to your credit card are final and not reversible. You agree that you will not charge back any amounts previously charged to your credit card by Confinity. If you charge back a credit card charge for a payment initiated by you, you agree that Confinity may recover the amount of the charge-back by either reducing your PayPal™ account balance or re-charging your credit card for the amount of the charge-back. "
This is part of the agreement, it seems to have you confused, and I'll give my level best effort to explain it in simpler terms if you wish. Should you come across an auction that has terms like "No Refund, this gadget is being sold as is" and it confuses you I'll try and explain what that means.
Be warned. I won't debate you on whether or not you feel PayPal has a right to issue these terms, nor will I debate the right of a seller to include "No REFUNDS" in their listings.
I'm new here, but I am a bit baffled at the tone of some of the responses this poster has received.
In any event, the right to dispute and/or chargeback a credit card charge is governed by Federal law. I don't see how X.com/Confinity/Paypal (whatever name they are using currently) can issue a "policy" that overrides Federal law.
If the ability to chargeback is granted to all consumers, I fail to understand how such a policy could be legally inforced. I can, however, understand the nightmare Paypal could have if they were charged back every time someone wasn't happy with an auction purchase and wanted their money back.
To the original poster, your question is very good and I am very interested in the answer and legal ramifications. I also wonder why Paypal has not reponded to you, but have heard terrible things about x.com customer service.. so this may be normal for them.
posted on June 13, 2000 06:46:48 AM new
PayPal is not an escrow service, and cannot protect buyers from auction sellers with illegal or unsavory business practices. PayPal is here to help make your financial transactions as quick and as easy as possible. However, we cannot reverse any transactions in the event that goods are not received as ordered. In the event that you would like a refund on an auction payment, you may contact the seller directly or pursue whatever resources your auction site makes available. If you have any questions on this please feel free to call us at 800-836-1859 or email us at [email protected].
Thanks,
Brian
PayPal.com/X.com
posted on June 13, 2000 11:46:18 AM new
I'll be very clear.
The question does not regard whether PayPal is an escrow service.
The question does not regard whether PayPal protects the buyer from scams.
The question regards whether PayPal punishes those who exercise their federal right to reverse a credit card charge when nothing is received in return for that charge.
posted on June 15, 2000 10:33:45 AM new
PayPal is not violating the law regarding chargebacks by not allowing them. Your credit card payment is made to PayPal, not to the seller. So, if you initiate a chargeback you are taking the money away from PayPal, not from the seller. Therefore, as PayPal has performed the service that you requested (sending the money to the person that you indicated) there is no claim to validate a chargeback. Your problem lies with the seller, not with PayPal.
PayPal does take fraud very seriously and will investigate any reports of fraud. We want to make online payment safe and simple. If you have any questions about our policy with chargebacks please read our terms of use located on our website at www.paypal.com
Sincerely,
Aric
PayPal Customer Service
PayPal - A Free Service of X.com
posted on June 15, 2000 01:21:40 PM newWhat do you do?
How about this.
If you explain what you do, I think we'll agree that it is totally fair for you to add an explanation of why you think it is fair to do that.
I mean, if you ask people to waive their rights under the law, and they agree but subsequently retract such agreement, that may be grounds for punishment, depenging on the punishment. How bad is it?
posted on June 15, 2000 02:59:19 PM newsg52: I've been following this thread and at first I thought I knew what you were asking, but now it seems like there are 2 ways to interpret your question. I'll give you 2 scenarios and you tell us which one you mean. If neither is right, then I'm really confused.
Let's say you won a $200 auction from Mr.Ebay (hopefully a ficticious name) and your PayPal account is empty.
1)PayPal charges your credit card for $200. They beam it to Mr.Ebay's PayPal account. Mr.Ebay fails to send you your winnings.
2)PayPal charges your credit card for $200, and either it doesn't show up in your PayPal account or it is beamed to the wrong account thru no fault of your own.
My interpretation of the rules would be that in scenario #1, you're out of luck. Your credit card transaction is with PayPal and not with Mr.Ebay. So, if PayPal beamed your $200 to Mr.Ebay they've fulfilled their end of the deal and you have no right to a chargeback. I believe that I read in the FAQs that if you chargeback a PayPal transaction, they'll charge your card again and if you chargeback a second time, they'll close your account.
In scenario #2, you'd certainly seem to have a right to a chargeback since PayPal didn't beam the money to Mr.Ebay. I have no idea what happens here if you do a chargeback.
posted on June 15, 2000 04:51:57 PM new1)PayPal charges your credit card for $200. They beam it to Mr.Ebay's PayPal account. Mr.Ebay fails to send you your winnings.
This is the scenario under discussion.
Understand, buyer does have a federally guaranteed right to get the charge reversed.
PayPal clearly requires buyer to waive that right as a condition of obtaining the account. That's not in question (although the legal force of such an agreement may be questioned).
The question regards what PayPal does when buyer actually reverses the charge.
posted on June 15, 2000 05:18:01 PM new
sg52, "The question regards what PayPal does when buyer actually reverses the charge"
Forgive me if this answer gives you a sense of 'deja vu' because the question gives me a sense of 'deja vu'.
"12. If you are a Sender, you agree that all payments initiated by you in which charges are made to your credit card are final and not reversible. You agree that you will not charge back any amounts previously charged to your credit card by Confinity. If you charge back a credit card charge for a payment initiated by you, you agree that Confinity may recover the amount of the charge-back by either reducing your PayPal™ account balance or re-charging your credit card for the amount of the charge-back. "
You can find more answers on PayPal's terms and conditions, or FAQs.
posted on June 15, 2000 05:31:59 PM newForgive me if this answer gives you a sense of 'deja vu'
uaru I observe two things.
1. Your response does not answer the question of what PayPal does (we all know what they threaten to do, the question regards what they actually do do).
2. You apparently make no claim to speak for PayPal, so by not-so-tough logic, you couldn't answer what PayPal does.
posted on June 15, 2000 11:02:10 PM new
It should be clear by now that PayPal reps are not interested in answering sg52's question, but are only going to repeat their mantra about how you aren't buying a "thing" when you pay for an auction via PayPal, you're buying cash.
If that's so, then why does PayPal bill their charges as regular purchases, instead of cash advances?
The answer is that if they did so, the PayPal buyers would be charged cash advance fees from their credit card company, and buyers wouldn't like that very much.
If, as the PayPal reps claim, buyers have no rights to chargebacks since PayPal provided their "service" (cash transferred to someone else in exchange for credit card payment), then why do they need to punish buyers who do charge back? Why not simply dispute the charge, giving the credit card company the same explanation they keep giving here?
Here's my explanation: Because the credit card company would immediately reject that argument, since PayPal charged the buyer for a purchase, not a cash advance.
If this is true, then PayPal will never dispute a chargeback, because doing so would expose to the credit card company that they are improperly not identifying their charges as cash advances, thereby preventing the credit card company from collecting the additional fees normally due on those cash advances.
Instead, PayPal will (as their reps have said in the past) contact the buyer directly, attempt to talk the buyer into retracting the chargeback claim, and if they refuse lock the account and if possible recover the charges from the buyer's PayPal balance.
I feel you have given the best explanation yet for why PayPal will not allow chargebacks. I have gone through the "paying via PayPal , seller sends nothing, total loss of money scenario" twice now. It's only a matter of time until enough buyers get scammed, realize that for the "buyer" paying via PayPal is the same as electronically sending cash and become hesitant in using PayPal like me.
Here is a link to the problem I had:
http://remarq.ebay.com/ebay/transcript.asp?g=discuss%2Eebay%2Epayment%2Ebillpoint&tn=4494&sh=03c41fe44d7b36c3&idx=-1
Due to your posting I know understand why PayPal may be reluctant to fix the Buyer-Total Loss potential issue.
Dan
posted on June 17, 2000 02:22:37 PM new
danreller, "It's only a matter of time until enough buyers get scammed, realize that for the "buyer" paying via PayPal is the same as electronically sending cash"
I'm one buyer that can't figure how PayPal is the same as cash. I keep thinking I've got proof of payment, that is legally acceptable as evidence of payment, the same as if I had sent a money order or personal check. If someone could point out the error in my thinking I'd appreciate it.
This is a question of pneumonics. A PayPal transaction equates to cash in that once the transaction is made, the buyer has no recourse if the seller doesn't send the goods. PayPal will not allow chargebacks. The charge on the credit card statement states PayPal made the charge. If you do initiate a dispute, PayPal will take the disputed amount from any amount you may have in your "spendable" account and then "cut you off" or discontinue your account. They have it arranged where they assure they will get their money.
With a Money Order the Postal Service, bank or whatever issuer will help you.
With a personal check it is more difficult, but perhaps local, state, federal or other authorities can be alerted. The chances of getting your money back will be near zero, unless the amount warrants the man hour input into the investigation.
With PayPal the buyer cannot do anything. Yes PayPal definitely has the electronic trail, but they state it is not their place to get involved with the "non-transaction". They state they are not an escrow service and only transfer funds. There is question whether these transfers are purchases or cash advances and PayPal has avoided answering this dilemma.
So to me paying via PayPal is just like paying cash. Once you complete a PayPal transaction, that’s it - for the buyer. It ends there and is all up to the Buyer and Seller to work it out. PayPal will not help.
I suppose if the amount you desire to get back is worth it to you, you don’t mind never being able to use PayPal again, you want to go through and pay for a legal battle with PayPal… you could start a legal process with them, but I haven’t heard of anyone that has – yet.
posted on June 17, 2000 06:32:05 PM new
"With a Money Order the Postal Service, bank or whatever issuer will help you."
I've seen the form for filing a claim for mail fraud, 3 pages, you check out how you paid, cash, check, electronic payment, telephone bill payment, etc. Is this the form of help I'll get from the Postal Service if I have a problem? Do I have special privileges if I paid with a USPS Money Order and my item doesn't arrive? As for my bank I wasn't aware I could approach them if I paid for an item via a cashier's check or personal check, I thought I had to go to the authorities if I had a problem.
I'm not being difficult I just don't see how you equate PayPal transactions the same as cash since I have a record of payment that can be used as legal evidence.
posted on June 18, 2000 12:30:07 PM newPayPal will not allow chargebacks.
To be more concise, PayPal (apparently) punishes those who request and receive a chargeback.
PayPal's permission is not required for a buyer chargeback when the payment was for something not received, although the punishment may be awesome indeed.
I suppose it's like a mother who won't allow her daughter to marry someone of a different religion, under threat of estrangement.
This is how it works. In order to process credit cards as a merchant, you must agree to the "chargeback" clauses.
If a buyer does not receive the merchandise they can dispute the charges with their credit card company. (also applies if card is stolen)
The Credit Card company ( Visa, Mastercard, etc.) will then deduct the money from the deposit made into PayPals account.
PayPal will then attempt to recover the money from the buyer that disputed the charge by their agreement to pull the money out of incoming funds or dip into their bank account.
If PayPal is unable to recover the money from the buyer using these methods, they will then attempt to either place bogus charges against the sellers credit card or withdraw the money from the sellers bank account.
According to my interpretation of the fine print in their user agreement, this is how it would work. And according to the same agreement, this is what they will do if the credit card used to pay for an item that you shipped was stolen. You eat the loss, not them.
The difficulty with this is that it works both ways. If a customer decides to screw the seller, he can dispute the charges because he never received the $500 item, close his PayPal account, and since buyers have no reason to give their bank account number to PayPal, PayPal will then "steal" the money from the seller's bank account or future payments, thus helping criminals commit their crimes much more efficiently.
So how does one protect themselves ? First and foremost, does the seller accept credit cards directly ? We do, but still receive many PayPal payments. Dumb. Call us toll-free and pay by credit card and I am on the hook and my business is at stake. Wire the money through Western Union, it is fast, it is cheap, and it is guarenteed. Wire the money through MoneyGram. Send a personal check, you may have to wait a few days extra with some sellers, but they have to reveal their identity to cash your check.
How does a seller protect themselves ? Never ever give them your bank account number and never give them your credit card number. Have a check mailed for each transaction and you are guarenteed to get paid. And if you are still unsure, explain in your TOS that you ship upon receipt of check from PayPal. (which is technically when you are paid, not when the email arrives)
And in closing, a little food for thought..
If PayPal went bankrupt today, all of the money paid in would go to the investors and creditors, not to the sellers that had already shipped their merchandise.
