PayPal questions ...

[mbigna]

Don't be too hard on me if this isn't quite the most appropriate place to post these questions, but PayPal is a 'vendor' of sorts, right?

I understand that PayPal is now owned by eBay. I want to begin to do some trading on eBay and do more trading between other surfers in a convenient, but SAFE/PROTECTED manner. It seems to me that just about anyone who buys/sells on the internet has a PayPal account. But, I hear a few horror stories from time to time.

I signed up for a PayPal account, but I have not yet deposited any money into it at this point. I have not yet attached a credit card number or a checking account number to this account. I went through all the eBay and PayPal tutorials, but they were lacking in their explanations about how buyers and sellers are protected.

I don't like how they promote linking your account to your checking account. I like the idea of only using a credit card for all the extra protection I get. In fact, I do a lot of internet shopping with reputable retailers and have never had a problem doing so since I began using the internet. Now, I even have more protection in that I can request a unique credit card number with a limit I choose and an expiration date I choose that I use for purchases I make to new or questionable retailers so I know the maximum I can lose if scammed and know that if the number itself gets out, it cannot be used for long because the unique number closes out soon after being charged with the purchase I want to make.

I would appreciate any advice, hints, experiences, and useful links any of you have to offer a PayPal noob like me so I don't get scammed--or at least make it less likely for me to be scammed when using PayPal.

I can list a few specific questions that I have now:

• If I make a winning bid on an auction item on eBay and pay via PayPal with funds from a connected checking account, and the seller never sends the item/item is DOA/item is not as advertised, what recourse do I have other than PayPal arbitration?
  
  
• Same as above, but if I use PayPal with funds deposited from my credit card, do I have the extra protection of my credit card provider?
  
  
• If I sell an item (eBay or otherwise) and I receive my payment through PayPal and I then ship said item to buyer, what happens if the buyer fraudently claims he never received the item or is not as advertised? Does the buyer have the ability to recover those funds from my PayPal account? Does the buyer have the ability to recover funds directly from my checking account if I have my checking account linked to my PayPal account? Does PayPal itself have the ability to charge my credit card or remove funds from my linked checking account without my permission?
  
  
• Is the convenience that comes with linking a checking account worth the extra risk of linking a checking account to my PayPal account? On eBay, linking gets you "PayPal VERIFIED" status. Is this 'verified' status useful? I see that some sellers won't sell to someone paying with PayPal using credit card funds. If you have your checking account linked to your PayPal account, but you deposit via your credit card, do you still have credit card protection? Can a seller know whether PayPal funds come from your checking account or your credit card? What protection(s) do buyers and sellers have under these circumstances?

I'm sure I'll come up with some other questions as this discussion goes on.

Thanks in advance for your help!

 

[inkfx]

These are some great questions and quite frankly I've been wanting to ask some of these aswell but was to lazy to post about it so a thank you is in order here. Thanks Anyways, I'm pretty much in the same boat but I don't do THAT much online buying/selling but PayPal would make things more simple. My dad is the worry wort so the answers are for him.

 

[Silversinksam]

These are some great questions and quite frankly I've been wanting to ask some of these aswell but was to lazy to post about it so a thank you is in order here. Thanks Anyways, I'm pretty much in the same boat but I don't do THAT much online buying/selling but PayPal would make things more simple. My dad is the worry wort so the answers are for him.

I know the answers but I'm to tired from Trollhunting to answer them all properly. I'll be the Shell Answer Man tomorrow for you guys if nobody pops in and answers them before then

 

[Lionsault_100]

Don't be too hard on me if this isn't quite the most appropriate place to post these questions, but PayPal is a 'vendor' of sorts, right?

I understand that PayPal is now owned by eBay. I want to begin to do some trading on eBay and do more trading between other surfers in a convenient, but SAFE/PROTECTED manner. It seems to me that just about anyone who buys/sells on the internet has a PayPal account. But, I hear a few horror stories from time to time.

I signed up for a PayPal account, but I have not yet deposited any money into it at this point. I have not yet attached a credit card number or a checking account number to this account. I went through all the eBay and PayPal tutorials, but they were lacking in their explanations about how buyers and sellers are protected.

I don't like how they promote linking your account to your checking account. I like the idea of only using a credit card for all the extra protection I get. In fact, I do a lot of internet shopping with reputable retailers and have never had a problem doing so since I began using the internet. Now, I even have more protection in that I can request a unique credit card number with a limit I choose and an expiration date I choose that I use for purchases I make to new or questionable retailers so I know the maximum I can lose if scammed and know that if the number itself gets out, it cannot be used for long because the unique number closes out soon after being charged with the purchase I want to make.

I would appreciate any advice, hints, experiences, and useful links any of you have to offer a PayPal noob like me so I don't get scammed--or at least make it less likely for me to be scammed when using PayPal.

I can list a few specific questions that I have now:

• If I make a winning bid on an auction item on eBay and pay via PayPal with funds from a connected checking account, and the seller never sends the item/item is DOA/item is not as advertised, what recourse do I have other than PayPal arbitration?
  
  
• Same as above, but if I use PayPal with funds deposited from my credit card, do I have the extra protection of my credit card provider?
  
  
• If I sell an item (eBay or otherwise) and I receive my payment through PayPal and I then ship said item to buyer, what happens if the buyer fraudently claims he never received the item or is not as advertised? Does the buyer have the ability to recover those funds from my PayPal account? Does the buyer have the ability to recover funds directly from my checking account if I have my checking account linked to my PayPal account? Does PayPal itself have the ability to charge my credit card or remove funds from my linked checking account without my permission?
  
  
• Is the convenience that comes with linking a checking account worth the extra risk of linking a checking account to my PayPal account? On eBay, linking gets you "PayPal VERIFIED" status. Is this 'verified' status useful? I see that some sellers won't sell to someone paying with PayPal using credit card funds. If you have your checking account linked to your PayPal account, but you deposit via your credit card, do you still have credit card protection? Can a seller know whether PayPal funds come from your checking account or your credit card? What protection(s) do buyers and sellers have under these circumstances?

I'm sure I'll come up with some other questions as this discussion goes on.

Thanks in advance for your help!

OK here we go- lionsault's paypal FAQ time

Obviously I am not an employee of paypal, or ebay, but since I am just a person with a fairly amount of experience buying/selling over the internet hopefully what i say subjectively and objectively helps you.

Paypal is employed by minimum wage kids they find on the street looking for high school part time jobs for the most part, and they are not the best run company. Paypal has thousands of complaints with the better business bureau. I've had problems with paypal myself, but like it or not they are a monopoly, and while you can make due without using paypal to sell stuff, you can't without buying, hence why i cleared things up and keep a paypal account with only my credit card linked as i'll never sell with this service again.

There is a LOT of fine print in the paypal user agreement, they don't have to follow the same rules and regulations of regular banks (as technically they are just a medium to transfer money), so for ANY REASON they see fit, they can freeze any money you have in your paypal account for 6 months. They also have access to the money you have in your checking account (although cases of them taking money out of peoples bank accounts or much more rare than the norm overall sleeziness of paypal).

Some reaons they may decide to freeze you is maybe there is a spike in your sales? inconsistant usage habits or perhaps you are just a bad parallel parker, its anyones guess. Paypal does NOT (and according to their rules do not have to) tell you why they freeze your account. If you do choose to sell a safe way to do it is open a seperate checking account just for paypal to protect your regular funds.

But enough about that - SELLING:

Anytime you ship anything over $10 on paypal - YOU MUST get tracking numbers for it. and if its over $100 I recommend signature confirmation (1.50 now will save a LOT of headache down the road).

There are 2 ways a buyer can file a complaint against you

NON Receipt:

You didnt send the item, or they didn't get it. The way to avoid getting burned by a dishonest buyer is simply getting the tracking numbers. Paypal only verifies that "A" product was shipped to "The" place it was supposed to be shipped to. A buyer may only file one complaint per sale. You can also protect yourself by only shipping to confirmed addresses (more on this later)

NON described:

This is where one of paypals main problems are. They are the judge, jury and executioner, and no one knows what credentials they use to come to their conclusions. If it is a laptop with a cracked screen they might tell you to go to a shop and get an estimate (which in itself can cost money) and it could get into a big headache. The good news as a seller, paypal gives the seller the benefit of the doubt most of the time in these cases, and its the buyer that has to do a lot of busy rat work. For the most part if you ship what you promise it will be hard for a buyer to do the rat work and prove fraud.


ok...

Now buying.

You have

Verfied member and/or CONFIRMED address.

You are verified by linking a bank account
you are confirmed by linking a creditcard.

It is pretty much essential to become confirmed as most sellers on ebay will not ship to a non confirmed address (due to high instances of fraud). You are confirmed when paypal checks that the address on your CC statement matches whats in your paypal account. Paypal accounts are pretty much worthless without a creditcard.

VERIFIED is really more of a plus for selling, it pretty much lifts withdrawal limits, but links your bank account. Its up to you to decide if that kind of risk is worth it.

Now, protecting yourself against fraud.

Remember- If you file a chargeback with your CC number in case of fraud you will most likely be terminated. They say to use their resolution process first, which brings me to another big problem of paypal. Anytime a complaint goes through paypal makes money They make $25 off of a refund.

In this case prevention is your best weapon. You get free protection if you only buy from people with 98% feedback, and its safer to only buy from people in your continent (USA/Canada for us).

Please anyone else add anything i've left out ..

 

[UnseenMenace]

1. According to PayPal accepting their ToS (Terms of Service) in effect means you waive your rights to credit card consumer protection laws if you want to use their service, and that you may not issue a chargeback for unauthorized use of your credit card and PayPal account, or if you do, then they have the right to limit your account.

www.paypalsucks.com

all you need

 

[redrumy3]

yea payapl you get scammed real easy with and they can get there money back like its nothing, i only use paypal when i buy stuff on ebay but also i accept it but only from ppl with verified address and if they dont have verified then i make them send a money order or w/e i got scammed once someone paid with a stolen account and i have to pay back 250 =/

 

[Dreamstalker]

I would advise opening up a secondary checking account to only use for Paypal. You'll be able to transfer money from that account to your main account which PP can't touch in the event of a bogus chargeback.

I always pay using a credit card for the extra protection (PP protection seems useless for the honest buyers/sellers, yet PP always sides with scammers...).

You didnt send the item, or they didn't get it. The way to avoid getting burned by a dishonest buyer is simply getting the tracking numbers. Paypal only verifies that "A" product was shipped to "The" place it was supposed to be shipped to. A buyer may only file one complaint per sale. You can also protect yourself by only shipping to confirmed addresses (more on this later)

This can also work the other way. I've heard of scammer sellers giving made-up tracking info, or getting DC on a first-class envelope and it was accepted as proof of delivery (PP has no way of knowing exactkly what was sent with a tracking number, only that something was)

Remember- If you file a chargeback with your CC number in case of fraud you will most likely be terminated. They say to use their resolution process first, which brings me to another big problem of paypal. Anytime a complaint goes through paypal makes money They make $25 off of a refund.

For that reason, even if I know PP will deny a claim I file through them first. IIRC your account can only be terminated if you go over their heads without giving them a "chance to resolve the issue".

 

[Silversinksam]

I would advise opening up a secondary checking account to only use for Paypal. You'll be able to transfer money from that account to your main account which PP can't touch in the event of a bogus chargeback.

I always pay using a credit card for the extra protection (PP buyer protection is useless IMO).

That's good advise Plus when buying on Ebay, if it's a high dollar item, ONLY BUY from an Ebay member that has a Paypal buyers protection logo. (PS Lionsault_100 saved me a lot of time and answered all the questions so I can resume my Trollhunting duties

 

[Lionsault_100]

I would advise opening up a secondary checking account to only use for Paypal. You'll be able to transfer money from that account to your main account which PP can't touch in the event of a bogus chargeback.

I always pay using a credit card for the extra protection (PP protection seems useless for the honest buyers/sellers, yet PP always sides with scammers...).

This can also work the other way. I've heard of scammer sellers giving made-up tracking info, or getting DC on a first-class envelope and it was accepted as proof of delivery (PP has no way of knowing exactkly what was sent with a tracking number, only that something was)

For that reason, even if I know PP will deny a claim I file through them first. IIRC your account can only be terminated if you go over their heads without giving them a "chance to resolve the issue".

It could work the other way, but rarely doesn't. If you send an empty box and try to pass it off that it was merchandise - that is mail fraud and can lead to federal prison - and it would be VERY easy to prove , so while there are many holes in the system, this loophole is pretty much closed.

 

[mbigna]

I would advise opening up a secondary checking account to only use for Paypal. You'll be able to transfer money from that account to your main account which PP can't touch in the event of a bogus chargeback.

I always pay using a credit card for the extra protection (PP protection seems

• useless for the honest buyers/sellers, yet PP always sides with scammers...).
  
• This can also work the other way. I've heard of scammer sellers giving made-up tracking info, or getting DC on a first-class envelope and it was accepted as proof of delivery (PP has no way of knowing exactkly what was sent with a tracking number, only that something was)
  
• For that reason, even if I know PP will deny a claim I file through them first. IIRC your account can only be terminated if you go over their heads without giving them a "chance to resolve the issue".

The advice for creating a secondary PayPal only checking account has been widespread in my research. I guess that PayPal can, if they want, deposit AND withdraw funds from a checking account at will. So, the advice goes, as soon as money appears in your PayPal account, one should immediately transfer the money from the PayPal account into your linked checking account and THEN IMMEDIATELY move it to an account that is NOT linked to PayPal. I also understand that PayPal can make interest from any money left in the PayPal account over time--money that the account holder should be getting. But since PayPal is not a bank, they are not beholden to the same rules and regulations as a bank.

Follow-up questions:

• Is there a way to link a checking account to a PayPal account and limit that checking account so that withdrawals cannot be make upon it?
  
  
• If a credit card is linked to one's PayPal account, can that credit card be charged without the cardholder's direct permission/authorization?

You have

Verfied member and/or CONFIRMED address.

You are verified by linking a bank account
you are confirmed by linking a creditcard.

It is pretty much essential to become confirmed as most sellers on ebay will not ship to a non confirmed address (due to high instances of fraud). You are confirmed when paypal checks that the address on your CC statement matches whats in your paypal account. Paypal accounts are pretty much worthless without a creditcard.

VERIFIED is really more of a plus for selling, it pretty much lifts withdrawal limits, but links your bank account. Its up to you to decide if that kind of risk is worth it.

• What, if any, are the implications of having both a credit card and checking account both linked to the same PayPal account with regards to security?
  
  
• What can PayPal do to either/both checking and charge accounts without your permission?
  
  
• If I purchase an item and use my credit card to deposit funds into my PayPal account, am I still protected by my credit card provider even though I'm really making a 'two-stage' transfer (i.e. I make a cash advance from my credit card into a PayPal account and then money is transferred from my PayPal account to the seller). Is this protection complicated if a checking account is also linked to that PayPay account? Could there be confusion as to where money used to pay for an item originated?
  
  
• Other than PayPal's own dispute resolution process, if both a checking and charge account are linked to a PayPal account would this confusion cause problems if ultimately I decide to initiate a credit card charge back?
  
  
• Can a seller ever know where funds used to pay for merchandise originated when being paid via PayPal?

My thinking is that I would like to make purchases using my credit card so I can ultimately get that protection should I get scammed by a seller and not be able to get satisfaction through PayPal's dispute process. For selling, linking a checking account would seem to be most convenient, albeit affording less protection. Linking a checking account would seem to be the quickest, most efficient, and the cheapest way of transferring funds out of a PayPal account. I'm in no way interested in acquiring a PayPal debit card and don't want to depend on PayPal to cut and mail me checks sent through the mail -- $1 fee notwithstanding.

 

[Captain Slug]

If I make a winning bid on an auction item on eBay and pay via PayPal with funds from a connected checking account, and the seller never sends the item/item is DOA/item is not as advertised, what recourse do I have other than PayPal arbitration?

I don't recommend buying anything worth more than $50 on eBay using a checking account through Paypal. If you do such a transfer it's best to do so with a seperate checking account from the rest of your finances. The recourse you have through your bank that issues/controls your checks will depend on your bank so you'll need to ask them.

Same as above, but if I use PayPal with funds deposited from my credit card, do I have the extra protection of my credit card provider?

Disputing charges through your credit card is usually VERY easy, but again will depend on who your card is furnished by.

If I sell an item (eBay or otherwise) and I receive my payment through PayPal and I then ship said item to buyer, what happens if the buyer fraudently claims he never received the item or is not as advertised? Does the buyer have the ability to recover those funds from my PayPal account? Does the buyer have the ability to recover funds directly from my checking account if I have my checking account linked to my PayPal account? Does PayPal itself have the ability to charge my credit card or remove funds from my linked checking account without my permission?

1. They have to prove it and this is why you should keep your postal receipts, insure your packages, use some means of tracking your packages, etc.
2. The buyer does not, the buyer has to file claims to which you can respond. I've gone through the process 3 times and 2 out of the 3 it was the buyer directly contacting me about the issue without using anything official to get their questions answered.
3. Paypal can pull money from you checking account if a claim is filed, reviewed, and processed. You will usually be notified of claims, provided you e-mail spam filter doens't delete them. This is another reason you should have a seperate checking account for Paypal.
4. Yes and No. With both you still have some leeway for disputing the claims either through Paypal or your Bank/Credit Card company. Really depends.

Is the convenience that comes with linking a checking account worth the extra risk of linking a checking account to my PayPal account? On eBay, linking gets you "PayPal VERIFIED" status. Is this 'verified' status useful? I see that some sellers won't sell to someone paying with PayPal using credit card funds. If you have your checking account linked to your PayPal account, but you deposit via your credit card, do you still have credit card protection? Can a seller know whether PayPal funds come from your checking account or your credit card? What protection(s) do buyers and sellers have under these circumstances?

1. There are other ways of verifying your account. Paypal simply uses your checking account to confirm your address (mostly) and to show that you have actual finances allocated.
2. Status is useful in that it reduces the fees on Paypal.
3. Yes you still have credit card protection.
4. No a receiver of payment cannot tell which payment method you used.
5. Depends.

As for selling things I would avoid using Paypal as a means of accepting payment unless you setup a secondary checking account with only the minimum balance in it. Selling anything on eBay can be a hassle so I haven't been bothered to do it in quite some time.
Oh, and if you do sell anything on eBay DO NOT OFFER INTERNATIONAL SHIPPING. If you need me to explain why it would require a whole other post.