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Y'all,
PayPal has made some changes to the way it handles buyer complaints (now
called "disputes") if you don't receive the item you've paid for. There are a
couple of "gotchas" in the procedure now... I've been trying to sort it all out
and here's what I've concluded. If I've got it wrong, someone please chime in
and correct me:
1) PayPal now handles buyer complaints ("disputes) in a two-tiered system
now that eBay owns PayPal. The details are at: https://www.paypal.com/us/cgi-bin/webscr?cmd=p/gen/ua/policy_buyer_complaint
As far as I can tell, this is the way it now works:
A) If the item showed in its auction description
the blue PayPal logo that said it was eligible for the "Free PayPal Buyer
Protection" then your complaint will be handled according to the PayPal Buyer
Protection Plan, which has a LIMIT of $1,000 USD on the amount it will try to
get back for you. There is no processing fee for this, but if you paid more than
$1,000 you're only going to get a maximum of $1,000 back -- UNLESS you funded
your payment with a Credit Card (which is what I now recommend doing for
payments over $1,000). Details on the PayPal Buyer Protection Plan are at:
B) If the eBay item did NOT show in its auction
description that it was eligible for the "Free PayPal Buyer Protection" then
your complaint will be handled according to eBay's "Standard Purchase
Protection Plan" which has a LIMIT of only $200 USD on the amount they will try
to get back for you -- and they will CHARGE YOU a $25 "processing fee" no matter
what amount you originally paid(!) So if you paid $45 for the item, you're only
going to get a lousy $20 bucks back. This is a total rip-off, but is now what
you get stuck with if the eBay item description did not
originally carry the seal that it was eligible for "Free PayPal
Buyer Protection" (it seems a lot of eBay items are eligible for PayPal
Buyer Protection, but not all of them). Details on the pitiful eBay Purchase
Protection Plan are at:
2) The bottom line is that for PayPal payments over $1,000 USD you
should use a credit card to fund the PayPal payment rather than paying with
the cash balance in your PayPal account or with an "Instant Transfer" from your
bank account or "e-check".
Otherwise, the maximum you can recover is $1,000 USD. Non-eBay items are
also covered up to $1,000 -- as far as I can tell. If anyone knows differently
please let us know. But, if for some reason an eBay item was NOT
listed as eligible for "Free PayPal Buyer Protection" then the maximum amount
you can get back is $200 and you will pay a processing fee of $25 -- not
matter what amount you originally paid(!). So, I would not even bid on an eBay
item if the description didn't carry the "PayPal Buyer Protection" seal.
So, for payments over $1,000, funding the PayPal payment with a credit card
is the only truly safe way to go, even though it means you'll end up paying some
credit card interest until you can get the money to your credit card company.
It also means that instead of filing a claim with PayPal that you can
dispute the charge directly with your credit card company -- which usually gives
you much longer to file a claim and doesn't have a limit on the dollar amount
you can get back. PayPal says that most credit card companies limit the time you
can file a dispute to 60 days, but it will vary from card to card, so you should
check into that with your own credit card issuer.
The final "gotcha" -- PayPal now tries to fund payments from your cash
balance first. So, if you want to fund the payment with a credit card instead,
you have to do this:
You can choose your credit card as your funding source when you get to the
last step after you have clicked on the SEND MONEY tab. When you get to the
confirm page, click the More Funding Options link.
THE GOTCHA: If there is enough cash money in your PayPal balance to cover the payment, their system will NOT let you use your credit card as a funding option for that payment. So, you may have to transfer some cash out of your PayPal balance first before making a payment funded with your credit card. What a pain. This is why I suggest people have two separate PayPal accounts, one for receiving payments and one for sending them. Make the sending account a "personal account" so you don't have to pay any transaction fees to put money into it. All of this is a pain, but surely worth it for the safety if you're going
to be paying more than $1,000 for something. Of course, this sort of hassle is
precisely the reason a lot of buyers will only bid on items from
well-established sellers that they know they can rely on.
In spite of all this, it is still better than the bad old days when you
just sent a seller a check or money order and prayed.
-- JR
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