$$$ Paypal Loophole SELLERS BEWARE!!! $$$

No matter how clear you are in your Ebay auction terms, if the Buyer chooses not to protect their purchase with USPS Delivery Confirmation, USPS Insurance, or USPS Signature Confirmation, they are entitled to a COMPLETE (s/h too!) refund with Paypal (FROM YOUR POCKET) by simply filing a Paypal claim of "Non-Receipt" because you shipped without these services, regardless of the paper-trail you can provide!  You could provide receipt proof showing their zipcode for the destination, emails that state they have recieved the items and so much more and it doesn't mean ZILCH to Paypal if you did not include a tracking number (UPS/FED EX/DHL) or USPS Delivery Confirmation. 

• LOOHOLE #1 ~ Proof of delivery and Insurance
• LOOPHOLE #2 ~ Paypal Buyer Chargeback Scam
• LOOPHOLE #3 ~ The Appeal
• LOOPHOLE #4 ~ Suspended Users
  
  If you do not know about them and you run across one of these, you just might say or do, or not know what to say or do, or when to... and lose your hard earned money!!
  
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LOOPHOOLE #1 - proof of "Delivery" and "Insurance"

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I recently discovered this the hard way.  I can prove shipping with a dated USPS receipt which clearly shows the Buyer's zip code as the destination.  I can prove that the package was picked up by the Mail Carrier and checked into the Post Office for delivery with the initialed USPS Carrier Pickup receipt.  I can even go a step further by filing a FORM 1510 with USPS which provides a package trace and that it isn't waiting at some post office along the way waiting to be claimed or was damaged somehow that prevents it from being returned or sent along to the buyer. 

Regardless, because of Paypal's narrow views, the buyer can end up with the item, a complete refund FROM YOU and possibly even a refund from USPS as well!  (And no, insurance coverage will not prevent a forced refund EVEN IF the BUYER declines to follow through on an Insurance Claim.)

How to avoid the "loophole"..

Add USPS Delivery Confirmation or (UPS/FedEx - a tracking number)......If you print your postage online either through Ebay or USPS.com - USPS Delivery Confirmation is included for free (*automatically) when shipping with USPS Priority.  If you ship with USPS First Class or USPS Parcel Post and print the postage online, you will get USPS Delivery Confirmation added on automatically but at a discounted rate (instead of the normal .50cents) - I believe it runs around .14cents.

But wait! USPS Delivery Confirmation isn't enough to protect you...
Just because USPS insurance is purchased, the buyer could still be entitled to a Paypal refund from YOU because USPS SIGNATURE CONFIRMATION wasn't purchased!! 

Same reasons - EVEN IF USPS DELIVERY CONFIRMATION is included!

Paypal Rule:  ITEMS OVER $250... If your total is over $250 to be protected by Paypal, in addition to adding USPS Insurance Coverage and USPS Delivery Confirmation, you MUST ship with USPS Signature Confirmation as well!  (Pass these fees on to the buyer - in print - simply stating this coverage is REQUIRED by Paypal.)

These loopholes has Ebay and USPS on my side, but still PAYPAL granted a refund to a scamming buyer!  Perhaps my costly education could protect other SELLERS! 

You can add these charges into your s/h price and make the BUYER pay for them.  Just state that Paypal Requires that items over $100 have USPS Delivery Confirmation/Insurance and Signature Confirmation and that these charges have been added to reflect this.  Most buyers are very understanding and apperciate you being up front about this charge.  Even more will appreciate the extra security of knowing their items are being protected.


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 LOOPHOLE #2 ~ Paypal Buyer Chargeback Scam

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Another loophole, seemingly unavoidable... if a buyer files a dispute though Paypal, even if you have followed all the above guidelines, they can still be entitled to a refund (sh too)... EVEN if the PAYPAL claim was denied.... if the buyer paid through Paypal with their Credit Card (even a Visa Debit Card) they can file for a "Buyer Chargeback" simply by saying the "items were not as described".

Example... a buyer of mine recently purchased a huge lot of mostly NWT clothing (the rest was new without tags). I was very detailed in my auction, 20 pictures with super-size close-ups and a detailed description.  The buyer was very pleased, said many times what a "Great Buy" it was but commented after it arrived about a "stong pesticide odor" all over the box and items.  It was shipped UPS ground and I know there isn't any way the odor came from my home... so I offered to assist in filing a UPS insurance claim.  The buyer declined said "not to worry, I just wanted to let you know - I am pretty certain it will all come out in a wash, it is a great buy and I don't want to mess with a return or claim, I am very pleased with the items".  I thought if all else, I would be protected, I shipped with a UPS tracking number and UPS Insurance, and I offered to assist the buyer in filing a claim with UPS - so I should be protected right??  WRONG.

It wasn't until DAYS later when they posted a Neutral comment against me saying  "Fast Shipping, Great Buy, Some Items Dirty & Smelly"   I felt this was incredibly inaccurate, misleading and unfair.  We had settled this DAYS ago simply by one email when SHE declined my assistance to file an insurance claim with UPS and cheerfully stated "no worries, this will all come out in the wash".  The buyer was very friendly and upbeat, going on about the "great buy" and "what a bargain" this auction was.... we ended our communication on a positive and friendly level to get a Neutral comment and so poorly worded that it would actually MISLEAD people as to what REALLY happened....  I thought long and hard about what to do and decided that it would be justified to post a negative feedback against them.  I was very careful to choose my words, unlike them.  I said  "Nitpicky, Complained, I tried to help, buyer declined then posted Neutral = Unfair"  More accurate about what really happened.  Well a windfall of profanity filled hate mail followed.  The buyer was very angry that I posted negative.  Insisted that I remove my comment.  I informed then that EBAY will NOT remove feedback comments without a court order, and pointed out that I was very accurate and felt it was fair... on and on we went around until I finally told her, I am sorry but the feedback stands...

• ALWAYS keep the emails you get from Paypal, and if you speak to someone, jot down their name or Employee number, the date and time you spoke with them and what was said. 
• You are the ONLY one defending you.  If you want justice, you will have to work for it - otherwise your claim will get swept under the red tape and bureaucracy of Paypal policy.
  
  Up to this point, I have a really excellent record with Paypal.  I have been a long standing customer since 1999 doing business of both buying and selling with Ebay and on the internet through Paypal, completing thousands of transactions without incident.  But when this started, it didn't matter in the least about my reputation or how long I have been in good standing with Paypal.  Or that the person creating all this chaos was a relatively new user.  I will say that in some aspects that is nice to know you are on an even playing field whichever side you end up on.  Regardless of if you are a power seller or a newbie - Nice to know should you ever be the David to a Goliath.
  
  There really isn't much you can do to prevent this from happening.  You can STATE in your auction that the ONLY form of Paypal you will accept is BANK TRANSFERS or Exhisting Funds but there isn't any block on Paypal to prevent them from paying by credit card.  Infact, there is a fine print in Paypal's user agreement that you will not deny any form of payment through Paypal.  But most people will respect your wishes either out of customer kindness or just because they don't realize they can still pay by Credit Card.  You can also say that you will require an extra fee to use a Credit Card to pay with to cover the "high Paypal fee" for this privilage - this usually discourages people and they will either pay with Bank Transfers, Exhisting Funds or another method you accept like Money Orders.

• Side Tangent.... about Money Orders, there is a high amount of fraud with these lately, your bank may happily accept one not knowing the difference until WEEKS or months later and then by then you have already shipped the item, out the funds AND are out any fees your bank may charge you for this.  For this reason alone, I tell buyers I only accept USPS Money Orders, as in from the Post Office, these are the hardest to fake.
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(Anyways, back to the Paypal saga)

LOOPHOLE #3 ~ The Appeal

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Regardless of the evidence submitted, or the outcome.  If the outcome is denied on either end, the losing party reserves the right to file an appeal with Paypal. 

This basically starts the process over.  You really have to be on your toes (Paypal is NOT going to help you fight and most of their staff is only as educated as what is on their screens at the moment). 

In my case, the buyer appealed the initial Paypal Claim and that has been reversed citing "buyer returned items" simply because they supplied a tracking number, and whichever claims person that read the BUYERS appeal stopped reading at that - so now I am had to play echo and prove again "no they did not return ALL the items, and no the items returned were not in original shipped condition"....  Meanwhile my account has now been hit TWICE for this amount.  Yep, twice.  Plus the $10 chargeback fee.

Loophole #4 ~ The Suspended User

- this is a bit easier to prove - ALWAYS ship to the address EXACTLY as printed on the Paypal payment - and ONLY accept payments from CONFIRMED addresses, don't take excuses of "just moved" or "shipping to my sister's".  If they want to ship to an address other than what is confirmed on their Paypal account, you should kindly refund the payment and ask that they pay you with a Money Order.  The reason?  Along with the tracking number you have proof of the addresses going along with it.  But they can certainly cry "identity theft" and fight for it.  This is really big with Credit Card payments... although I haven't had to deal with this one (thankfully), I have heard about it happening...
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• AS A BUYER..... You are only allowed up to 3 claims in a calender year.  And unfortunately, if you do multiple purchases (as in "combined shipping") from one dishonest Seller and make a claim on that - EACH one of those separate auctions are counted SEPARATELY - even if you paid for them all in ONE payment...you could've just used up your three for the year. - No matter how legit the claims are or the outcome.  So, should you get duped again in the same year - you might not be able to get any money back - no matter what proof you can provide to prove your claim.  Short of stepping in to suspend dishonest Seller Ebay accounts, Ebay isn't much help in this area.
  
  BEST bets to protect yourself - BUYING and Paying With Paypal.... For the safest purchases do not use existing funds or pay with your Checking Account through Paypal - use your Credit Card.  This way - SHOULD anything happen you have a Plan B lined up - you can file a Chargeback claim with Paypal or file a claim for fraud directly with your Credit Card company.  When you do get funds into your account, transfer them to your credit card or bank account and make your purchase from your Credit card.
  
  And there is A LOT that Paypal agents are NOT allowed to tell you or hint to you ... that is if there is any hope for your claim, if there are any other grievances filed against this Seller, or when they will give you an outcome to your claim.  They also cannot "rush" your claim.  It says they have to allow up to 10days for the Seller to respond and they mean it - even if there is proof that this person is up to no good. 
  
  Now Paypal says when a claim is filed against a person, they immediately freeze that amount of funds in the person's existing funds in their Paypal (if there are any) which will provide some relief.... plus they will not allow a person with open claims against them to close their Paypal account or remove any accounts associated with it.  (But if a person is only there to commit fraud chances are they are way ahead of you on this and have a dummy account connected to their Paypal account and no funds hanging around.)
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  So long story short....
  Paying with Paypal is secure and safe but you should pay by Credit Card and not existing funds or bank account transfer.
• • Watch how many claims you file - sometimes you just might want to count it as money lost rather than file a claim if you do a lot of business on Ebay.  Try to file the Postal Insurance claim first, if your package is lost or damaged and insurance was purchased.
  • Basically - it's a crap shoot.  .  You could file with Paypal - could recoop your money - one bad-guy down - but if something else comes up in the year - you could be wishing you had that claim back because you might be out MORE money the next time.... or you could wait and not file - kiss your money good-bye - be more careful in the future and not need to file another claim all year....
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Hopefully these tips will be filed in your head and you won't have to act on them.  Despite just being a duped Ebayer myself defrauded by a UK seller, I still believe MOST people are good.  Just keep both eyes open.  Don't wait and learn the hard way!  You work hard for you money and you should be able to keep it!

(*PS, if you found any of this helpful, please vote for it below - thanks so much!!  And if you think of anything else that should be included in here - do email me!!)