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FAQ: Selling with Paypal How to Protect Yourself
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Acronyms:
PP= PayPal
SPP = PayPal Seller Protection Policy
INR= Item not received
SNAD=Significantly not as described
CC=credit card
Contents:
I. PayPal Seller Protection Policy
II. Reversals and Chargebacks on PayPal payments
III. How to fight reversals and chargebacks
IV. Important measures to take to protect yourself
V. Important dates/Timeline
VI. FAQs
I. PayPal’s Seller Protection Policy:
The SPP is a policy that provides some protection against claims of nonreceipt and unauthorized payment. It WILL NOT protect you against SNAD claims. To qualify for the SPP, you must:
1. Live in the right country
The sellers primary residence must be in the U.S. Thus, the account must also be registered in the U.S.
2. Ship to the address on the transaction details page
PayPal no longer requires eBay sellers ship to confirmed addresses for coverage. Instead, the current requirement is to ship to the address as listed on the transaction details page in eBay.
3. Shipment requirements
PayPal requires you obtain proof of shipment and/or proof of delivery - what you need depends on what kind of dispute is filed. To cover yourself against claims of unauthorized payment, you need mere proof of shipment. For example, UPS tracking showing package pickup, or a receipt from the PO. The proof may be physical (e.e.g, paper) or digital (e.e., e/DC status). The proof must show the buyer's city and state or zip code at minimum.
If you want coverage against claims of nonreceipt, you need proof of delivery. This must be available online (e.g., e/DC showing delivery or UPS tracking showing delivery). The proof must contain the buyer's city and state or zip code at minimum.
If the total combined payment (item price + shipping + handling + insurance) is $250 or more, you MUST get a signature upon delivery. If not, you WILL lose an INR claim. For shipping via USPS, get Signature Confirmation (SC). For the other 3 carriers, request a signature.
Best bet: Get proof of delivery as that covers all SPP situations.
Note: DC is confirmation of delivery only. It is not tracking. You may get some scans along the way, but consider those a bonus.
If you allow pickups, you will not have online trackable proof of delivery. You WILL lose all INR claims. A receipt signed by the buyer in DNA-typable blood will not satisfy PayPal. Therefore, do not accept PayPal for pickups.
If you want to ship to international locations, you need to use FedEx or UPS (get tracking) or USPS Express Mail International or Priority Mail International. UPS or FedEx will tend to tick off your buyer as they get charged brokerage fees. Additionally, if the buyer does not pay the brokerage fees, FedEx will go back to the seller to get the fees. Both USPS options can be used, but EMI is the only option if you need a signature on delivery. Keep in mind PMI cannot be tracked everywhere so be sure to investigate what option is best for your particular situation.
Registered Mail (USPS) will meet the PayPal SPP online trackable proof of delivery requirement for items under $250. RM does require a signature, but it is not displayed online and as such will not meet the signature requirement for items $250+. This means that as long as all other criteria are met, you can ship items under $250 to APO/FPO addresses with RM and be covered under the SPP. Thanks to Airtommy for confirming with PayPal that RM will work.
If you plan to ship with Fedex, you have 3 options for obtaining a signature (indirect, direct, and adult). To comply with the signature requirement, you should request either direct or adult. PayPal requires that the package be signed for by someone at the delivery address. Indirect may not get a sig from the delivery address, so it may not meet the SPP requirements. It might, depending on who the Fedex driver gets to sign, but you should not count on it.
4. Ship within 7 days of payment
You must ship with 7 days of payment if you want any SPP coverage for non-receipt.. For eChecks, the clock starts the day PayPal clears the payment into your PayPal account. For all other payment types, the clock starts as soon as the payment hits your PayPal account. The 7-day rule does not apply for claims of unauthorized payment. It is, however, best practice to meet the more stringent rule to cover yourself against more problems.
5. Item must be tangible
Services do not qualify for SPP protection. Intangible goods (such as digital goods) do not qualify for SPP protection. if you're selling something that is not tangible, you get zero protection. This means WoW codes, gift codes, prepaid cell phone minutes, eBooks, or anything you might email, etc are not covered. You can help protect yourself by shipping a physical item. No shipping means you violate the requirement for online-trackable proof of delivery. If you want to sell a gift card, you can email the code to your buyer but you had better also ship that physical card. If you want to sell a Staples discount code, you will not be SPP-eligible.
6. The transaction must be marked eligible or partially eligible on the transaction details page.
In general eBay sales should be marked as eligible. This will happen if the buyer does what he is supposed to and links the payment to the listing by paying from eBay or paying for eBay items within paypal. Even if the buyer's address is unconfirmed the sale should still be eligible (assuming all other criteria are met).
In general non-eBay sales will be marked as partially eligible, allowing for coverage against non-receipt but not unauthorized payments. Non-eBay sales may be marked as eligible with coverage against both types of claims when the buyer's address is confirmed.
Confirmed addresses are those at which a buyer receives his credit card statement. Do not confuse a confirmed address with a verified account. Addresses can also be confirmed through other means (Alternate Address Confirmation - usually involves faxes in utilities statements and related stuff), but most buyers use the CC method.
If your buyer indicates a confirmed address on the transaction details, but then requests you ship to another address, and you do it, you will lose an INR complaint automatically.
How do I know if the buyer's address is confirmed? Look at the transaction details page. Below the shipping address, you should see "Confirmed" in green letters.
Some addresses in the following countries have been reported to be confirmable: United States; Canada; United Kingdom; Japan*. keep in mind that a confirmed address is necessary but not sufficient for full SPP-eligibility for non-eBay sales. In contrast, a confirmed address is no longer required for eBay sales.
*Japan addresses may or may not be confirmable. You may find that a Japanese address was listed as confirmed in an email and not confirmed in PayPal. YMMV.
II. Reversals and Chargebacks on PayPal payments
Reversal vs Chargebacks:
A reversal is done via PayPal. It may be done in response to an INR or a SNAD claim, or because the funds used in a payment were fraudulent, etc. A chargeback is done through a CC company, which yanks back the payment from PayPal, which in turns tries to yank it back from you. They are distinctly different and each has different implications for sellers.
III. How to fight reversals and chargebacks
1. Gather together your side of the story. Locate your DC/tracking number. If it's a SNAD complaint, locate all of your photos and the item description.
2. If it's a PayPal reversal, log into your PayPal Dispute Console and enter all the info requested. You must do this by the stated deadline (usually 3-10 days after the complaint is filed) or you automatically lose.
3. If the console will not allow entry of information, call PayPal and give your information over the phone.
IV. Important measures to take to protect yourself
In no particular order:
•Refuse PayPal from most international buyers unless you are willing to expose yourself to the risk of reversals for nonreceipt or are willing to pay for trackable shipments.
•Ship only to addresses provided by PayPal in the transaction details. Ship nowhere else. If a buyer needs a change of address refund and have then pay again.
•Make sure you ALWAYS have DC/tracking on EVERY package. Get sigs when necessary.
•Have clear, concise, and precise Terms of Sale.
•Clearly and accurately describe your items, and take very good, clear photos. This is your best defense against a SNAD claim.
Not sure if your transaction is SPP-eligible? Log into your PayPal account and look at the transaction details. If the transaction is SPP-eligible, you'll see about halfway down the page the line "Seller Protection Policy" followed by "Eligible" in green type.
Not sure how to block payments from countries you don't ship to? If you do not ship worldwide, blocking people registered in countries to which you do not ship will really cut down on problems. You can put this block in place by logging into My eBay. On the left menubar click on "eBay preferences" (under "My Account"). In the "Seller Preferences" section, click the second to last "change" link on the right side. That brings you to the Buyer Requirements page. Choose whatever blocks you like.
V. Important dates/Timeline
Day 0 – Payment
Day 7 – You need to have shipped by today to be covered by the SPP
Day 45 – All INR and SNAD claims must have been filed by today
Day 46 - You're safe from all PayPal claims if they haven't been filed yet. You're still potentially at risk for CC chargebacks.
Day unknown – CC chargebacks can be done for potentially months after payment, depending on the CC company
CONTINUE BELOW...............
Acronyms:
PP= PayPal
SPP = PayPal Seller Protection Policy
INR= Item not received
SNAD=Significantly not as described
CC=credit card
Contents:
I. PayPal Seller Protection Policy
II. Reversals and Chargebacks on PayPal payments
III. How to fight reversals and chargebacks
IV. Important measures to take to protect yourself
V. Important dates/Timeline
VI. FAQs
I. PayPal’s Seller Protection Policy:
The SPP is a policy that provides some protection against claims of nonreceipt and unauthorized payment. It WILL NOT protect you against SNAD claims. To qualify for the SPP, you must:
1. Live in the right country
The sellers primary residence must be in the U.S. Thus, the account must also be registered in the U.S.
2. Ship to the address on the transaction details page
PayPal no longer requires eBay sellers ship to confirmed addresses for coverage. Instead, the current requirement is to ship to the address as listed on the transaction details page in eBay.
3. Shipment requirements
PayPal requires you obtain proof of shipment and/or proof of delivery - what you need depends on what kind of dispute is filed. To cover yourself against claims of unauthorized payment, you need mere proof of shipment. For example, UPS tracking showing package pickup, or a receipt from the PO. The proof may be physical (e.e.g, paper) or digital (e.e., e/DC status). The proof must show the buyer's city and state or zip code at minimum.
If you want coverage against claims of nonreceipt, you need proof of delivery. This must be available online (e.g., e/DC showing delivery or UPS tracking showing delivery). The proof must contain the buyer's city and state or zip code at minimum.
If the total combined payment (item price + shipping + handling + insurance) is $250 or more, you MUST get a signature upon delivery. If not, you WILL lose an INR claim. For shipping via USPS, get Signature Confirmation (SC). For the other 3 carriers, request a signature.
Best bet: Get proof of delivery as that covers all SPP situations.
Note: DC is confirmation of delivery only. It is not tracking. You may get some scans along the way, but consider those a bonus.
If you allow pickups, you will not have online trackable proof of delivery. You WILL lose all INR claims. A receipt signed by the buyer in DNA-typable blood will not satisfy PayPal. Therefore, do not accept PayPal for pickups.
If you want to ship to international locations, you need to use FedEx or UPS (get tracking) or USPS Express Mail International or Priority Mail International. UPS or FedEx will tend to tick off your buyer as they get charged brokerage fees. Additionally, if the buyer does not pay the brokerage fees, FedEx will go back to the seller to get the fees. Both USPS options can be used, but EMI is the only option if you need a signature on delivery. Keep in mind PMI cannot be tracked everywhere so be sure to investigate what option is best for your particular situation.
Registered Mail (USPS) will meet the PayPal SPP online trackable proof of delivery requirement for items under $250. RM does require a signature, but it is not displayed online and as such will not meet the signature requirement for items $250+. This means that as long as all other criteria are met, you can ship items under $250 to APO/FPO addresses with RM and be covered under the SPP. Thanks to Airtommy for confirming with PayPal that RM will work.
If you plan to ship with Fedex, you have 3 options for obtaining a signature (indirect, direct, and adult). To comply with the signature requirement, you should request either direct or adult. PayPal requires that the package be signed for by someone at the delivery address. Indirect may not get a sig from the delivery address, so it may not meet the SPP requirements. It might, depending on who the Fedex driver gets to sign, but you should not count on it.
4. Ship within 7 days of payment
You must ship with 7 days of payment if you want any SPP coverage for non-receipt.. For eChecks, the clock starts the day PayPal clears the payment into your PayPal account. For all other payment types, the clock starts as soon as the payment hits your PayPal account. The 7-day rule does not apply for claims of unauthorized payment. It is, however, best practice to meet the more stringent rule to cover yourself against more problems.
5. Item must be tangible
Services do not qualify for SPP protection. Intangible goods (such as digital goods) do not qualify for SPP protection. if you're selling something that is not tangible, you get zero protection. This means WoW codes, gift codes, prepaid cell phone minutes, eBooks, or anything you might email, etc are not covered. You can help protect yourself by shipping a physical item. No shipping means you violate the requirement for online-trackable proof of delivery. If you want to sell a gift card, you can email the code to your buyer but you had better also ship that physical card. If you want to sell a Staples discount code, you will not be SPP-eligible.
6. The transaction must be marked eligible or partially eligible on the transaction details page.
In general eBay sales should be marked as eligible. This will happen if the buyer does what he is supposed to and links the payment to the listing by paying from eBay or paying for eBay items within paypal. Even if the buyer's address is unconfirmed the sale should still be eligible (assuming all other criteria are met).
In general non-eBay sales will be marked as partially eligible, allowing for coverage against non-receipt but not unauthorized payments. Non-eBay sales may be marked as eligible with coverage against both types of claims when the buyer's address is confirmed.
Confirmed addresses are those at which a buyer receives his credit card statement. Do not confuse a confirmed address with a verified account. Addresses can also be confirmed through other means (Alternate Address Confirmation - usually involves faxes in utilities statements and related stuff), but most buyers use the CC method.
If your buyer indicates a confirmed address on the transaction details, but then requests you ship to another address, and you do it, you will lose an INR complaint automatically.
How do I know if the buyer's address is confirmed? Look at the transaction details page. Below the shipping address, you should see "Confirmed" in green letters.
Some addresses in the following countries have been reported to be confirmable: United States; Canada; United Kingdom; Japan*. keep in mind that a confirmed address is necessary but not sufficient for full SPP-eligibility for non-eBay sales. In contrast, a confirmed address is no longer required for eBay sales.
*Japan addresses may or may not be confirmable. You may find that a Japanese address was listed as confirmed in an email and not confirmed in PayPal. YMMV.
II. Reversals and Chargebacks on PayPal payments
Reversal vs Chargebacks:
A reversal is done via PayPal. It may be done in response to an INR or a SNAD claim, or because the funds used in a payment were fraudulent, etc. A chargeback is done through a CC company, which yanks back the payment from PayPal, which in turns tries to yank it back from you. They are distinctly different and each has different implications for sellers.
III. How to fight reversals and chargebacks
1. Gather together your side of the story. Locate your DC/tracking number. If it's a SNAD complaint, locate all of your photos and the item description.
2. If it's a PayPal reversal, log into your PayPal Dispute Console and enter all the info requested. You must do this by the stated deadline (usually 3-10 days after the complaint is filed) or you automatically lose.
3. If the console will not allow entry of information, call PayPal and give your information over the phone.
IV. Important measures to take to protect yourself
In no particular order:
•Refuse PayPal from most international buyers unless you are willing to expose yourself to the risk of reversals for nonreceipt or are willing to pay for trackable shipments.
•Ship only to addresses provided by PayPal in the transaction details. Ship nowhere else. If a buyer needs a change of address refund and have then pay again.
•Make sure you ALWAYS have DC/tracking on EVERY package. Get sigs when necessary.
•Have clear, concise, and precise Terms of Sale.
•Clearly and accurately describe your items, and take very good, clear photos. This is your best defense against a SNAD claim.
Not sure if your transaction is SPP-eligible? Log into your PayPal account and look at the transaction details. If the transaction is SPP-eligible, you'll see about halfway down the page the line "Seller Protection Policy" followed by "Eligible" in green type.
Not sure how to block payments from countries you don't ship to? If you do not ship worldwide, blocking people registered in countries to which you do not ship will really cut down on problems. You can put this block in place by logging into My eBay. On the left menubar click on "eBay preferences" (under "My Account"). In the "Seller Preferences" section, click the second to last "change" link on the right side. That brings you to the Buyer Requirements page. Choose whatever blocks you like.
V. Important dates/Timeline
Day 0 – Payment
Day 7 – You need to have shipped by today to be covered by the SPP
Day 45 – All INR and SNAD claims must have been filed by today
Day 46 - You're safe from all PayPal claims if they haven't been filed yet. You're still potentially at risk for CC chargebacks.
Day unknown – CC chargebacks can be done for potentially months after payment, depending on the CC company
CONTINUE BELOW...............
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