Saturday, 2 February 2008

Paypal and Ebay Flaws

A seller posts a packet containing items won on Ebay abroad. The buyer paid for the items by Paypal, Ebay's financial wing. Over a month later the seller is surprised to discover that the buyer has filed a dispute with Paypal on the grounds that the item has not been received. Now according to Paypal, both sides negotiate to produce an amicable resolution. What if the buyer speaks no English or ignores translated messages? What if the seller submits a claim for loss to recover costs(form F58) to Royal Mail? Yes, the buyer escalates the dispute to a claim. The seller has to provide online tracking of delivery (Airsure costs £4.20 for a limited number of countries) and even this isn't always accepted. In return the buyer need do nothing. Paypal then decide the case and money is transferred from the seller's account to the buyer's. So the buyer could have the items won on Ebay and the price and postage. The seller has a grievance against the service provided by Paypal .

What should you do to outwit potential foreigner scammers and Paypal?

1 Do not rely on Certificates of Posting. Get the buyer to pay for Airsure. If they disagree you can cancel the contract at no cost to you (except the lost sale) because Paypal users outside the UK, Canada and USA have unrecognised addresses and that is a valid reason for cancellation.

2 Keep your Paypal account empty so that even if a buyer wins a dispute, Paypal can't take any money out. It worked for three sellers who scammed me for some £40 and lost the disputes.

3 Don't pay Paypal refunds voluntarily to buyers and then submit a claim to Royal Mail International. Their investigation will take a minimum of 3 months if the foreign post office bothers to respond and no payments will be made unless the buyer signs and returns a letter stating they have not received the packet.

4 If Paypal decides the dispute against you (and this is where Terry Pratchett's Million to One Rule doesn't apply) remember you can appeal. You can do this as often as you like within a 10 day limit. Contact Paypal Customer Services by phone and email. Be polite, accurate, concise, fair and persistent. If you can persistent off any large organisation they may offer an ex-gratia payment (persistent off money) just to keep your business.

If this posting appears critical of Ebay and Paypal, it is meant to be positive criticism because both companies provide a valuable service and deserve to make profits. However, the burden of proof and standard of proof in disputes is unfair to sellers and a barrier to trade. Sellers might think that Ebay and Paypal are just too risky and expensive (here and here)and take their business elsewhere. Everybody would lose out. And nobody wants that to happen. So will somebody sort things out?


Anonymous said...

Something like this just happened to me in the US. I sold an item to a person living in France. I sent it via registered mail so that I would have proof of mailing and a signature upon receipt. Well after about a month, the buyer emails me and asks if the item has been mailed. I said yes and that I had tracking--I would look it up for her. I go to usps and put in the tracking info...and usps never updated the package information for the item. According to them, it was accepted for shipping and had been sent to France and the informations ends there. So I filed an inquiry with usps..however, with international inquiries the foreign officials have up to 60 days to respond. So the buyer filed a non-receipt claim and since the inquiry was not yet complete, the buyer won the claim. Irony of it all--a week letter I get the letter from usps sayiong that the french determined it had been delivered...and now I am going through the appeals we'll see how it goes!

The moral of the story...even when you purchase tracking...when you ship still may not be covered :(

Gallimaufry said...

Good luck with your appeal. It appears that the Ebay and Paypal systems assume that the seller is a fraudster and so weights the procedure against him or her in favour of the buyer. I pointed out to Paypal that I could not be held responsible for post in the care of the postal service - a sender may not reclaim an item of post before it's delivered. In addition, you are held responsible for the failure of the French Post Office to update the tracking data. Also, the UK Post Office offers a tracking service for international post (great) but only within the UK (in small type). My idea is that the buyer should assume the risks of postage and claim for loss or damage but the seller should provide a certificate of proof of posting to the buyer or lose the claim.
Ending on a happy note, I've never had any problems with USPS (except that they scrapped international surface mail).