Posts tagged “PayPal Purchase Protection”.

Welcome To The New PayPal

On November 1st 2010 PayPal’s newly renamed Purchase Protection policy expanded to putatively ‘cover’ buyers no matter where they shop. PayPal is not just for eBay anymore. You can enjoy the protection of the “faster safer way to buy” anywhere PayPal is accepted, from Auntie Zuleika’s tiny website to venues like Etsy or Bonanza.

As you can see, two scenarios are covered, an item is not received or the item bought is ’significantly not as described’, known as SNAD on eBay.

Sounds wonderful!

Buyers can sleep better at night cradled in the beneficent arms of PayPal the Protector (insert superhero background music here.) Sellers everywhere will undoubtedly reap the blessings of increased sales volume from confident and secure buyers. PayPal, aw shucks, will just be happy doing a better job all around.

How can this be a bad thing?

Primarily because for small sellers PayPal functions as prosecutor, judge, jury and executioner. For example, the old empty box scam lovingly detailed below, in which PayPal is unwaveringly likely to decide in favor of the zero feedback buyer while ignoring all evidence to the contrary and an impeccable multi year sales record from the seller.

Add a beautifully written primer (def.#2) on how to scam the system for neophytes (def.#3) to the great game of get something for nothing and a door into a world of grief is opening for sellers on all the venues they fled to from eBay’s punitive policies, exorbitant fees and ham handed micro-management.

The fly in the ointment for buyers, ‘putatively’ explained

It should be noted that these protections do not apply when shopping with the big boys, who would not tolerate this nonsense for a New York minute.

Real buyers, as opposed to crooks, are unlikely to know how to differentiate between the protected transaction and the unprotected. We wonder if they would even know where to find the eligibility requirements. (Look for section 13.2) The crooks already know exactly what they are doing.

For a seller overview or comparison of the three versions of Payflow which are exempted from the Purchase Protection Plan see this Red Ink link. Note that all the exempt payment channels are a la carte subscription models; generally inferior in fraud protection (that is another post) to comparable commercial merchant processing products; but cunningly (def.#1,2,4) priced to entice the unsophisticated entrepreneur.

By an amazing co-incidence, increased merchant movement (where possible) to their a la carte payment processing system will substantially increase revenue for PayPal.  Just multiply a fraction of the number of sellers currently using PayPal by $30 per month ($360 a year), whooo-eee!

In summary
Only you, dear seller, can assess the degree of attractiveness your merchandise has for crooks and only you know the amount of dollar loss you can afford or are willing to tolerate. Other factors for consideration are the alternatives available to you and the cost of those alternatives.

This year we expanded and upgraded our product line and the PayPal loss potential has, I believe, increased in a direct ratio to the increase in ASP.

As a low volume seller on Bonanzle Bonanza and my own website the cost of a standard Merchant Payment Processor is not yet a viable option, nor are they all totally problem free.

I have removed PayPal as an option on Bonanza and will find the money somewhere to have someone install Google Checkout on my Zen Cart. I have been ‘going to do it’ for years, it is time to stop procrastinating and just do it.

Y’all come back!