Am I protected when selling with PayPal?

What is PayPal Seller Protection?

A buyer might make a claim with PayPal if - for example - they believe that an item hasn't been received or the payment from their account is unauthorised.

They could open a dispute with the PayPal Resolution Centre, or they might issue a chargeback in order to get their money back.

If the buyer is making a false claim, sellers using PayPal are protected by PayPal Seller Protection and shouldn't lose out - provided that they've satisfied eligibility requirements.

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Is my sale eligible for PayPal Seller Protection?

For your sale to be eligible for protection from disputes and chargebacks with PayPal:

• The item must be a physical, tangible good.
• The transaction should be marked by PayPal as ‘eligible’ or ‘partially eligible’ for PayPal Seller Protection on the ‘transaction details’ page, and in your confirmation email.
• If ‘partially eligible’, you'll be covered only if the buyer claims that the item wasn't received. You can find the 'transaction details' by logging into PayPal, finding the transaction in question and selecting the 'details' link.
• You must have posted the item to the shipping address on the ‘transaction details' page - you're not covered if the person has the item sent to a work address or to someone as a gift.
• The buyer must have paid in a single payment.
• Your primary residence listed on your PayPal account must be in the UK or Ireland.
• You must have proof of delivery.

Proof of delivery or proof of postage

If a buyer claims for an unauthorised payment, you must have proof of postage to be protected by the PayPal Seller Protection.

Proof of postage

This must be documentation from a postage company that must include:

• a confirmation of the item being shipped and the date
• the recipient’s address
• official acceptance of shipping by the company, for example a receipt, tracking information or a postmark.

But if you have proof of delivery, you don’t need proof of postage.

Proof of delivery

This must be documentation from a postage company that must include:

• confirmation the item was delivered and the date of delivery
• the recipient’s address.

What are the exceptions to PayPal protection?

If any of the following apply, unfortunately you won’t qualify for protection if the buyer opens a dispute:

• If you deliver an item in person or allow the buyer to collect it.
• If you've sold a service or a licence for digital content.
• The recipient is outside the UK.
• The items were equivalent to cash, for example a gift card, donations or investments.
• The buyer made a guest check-out in PayPal or the payments were processed through another service.
• Claims filed directly with eBay.

What are the PayPal time limits?

A buyer must open a dispute via the PayPal Resolution Centre within 180 days of making the payment. This is an extension of the 45 days which it was previously. Buyers are encouraged to deal directly with sellers to resolve the dispute.

If a resolution can't be found, the buyer can escalate the complaint - but only within 20 days of opening the dispute. Otherwise, PayPal will close the dispute and the buyer won't be eligible for reimbursement.

During the claims process, PayPal may require documentation to support your position, such as proof of postage and delivery.

Once a dispute is escalated, PayPal will - after surveying the evidence - make a decision in favour of the buyer or seller.

If you've followed all the requirements for your sale to be eligible for PayPal Seller Protection, it's unlikely that you'll lose out.

How do I deal with PayPal disputes and chargebacks?

It’s in your interest to cooperate with PayPal if a buyer raises a dispute or attempts a chargeback.

Disputes

As you’re dealing directly with the buyer, you should ask them for photos of the product they received.

If it appears the buyer is correct, you should apologise and correct the situation by sending another or giving a refund.

If you think the buyer is wrong, the dispute could be escalated to a claim after 20 days and PayPal will step in and investigate. At this point you will no longer be able to communicate with the buyer directly.

Again, cooperating with PayPal is in your interest and having lots of evidence will help your case.

Chargeback

A buyer may choose to file a chargeback through their bank or card provider.

When this happens, money will be taken from your account while the buyer’s bank or card provider decides if their claim is valid. But you still might be covered by the PayPal Seller Protection.

Like a dispute, you will need to provide evidence to show why the chargeback isn’t valid.

PayPal will hold the funds until the situation is resolved.

Credit card chargeback rights may be broader than PayPal's terms and conditions - for example, they can be filed more than 45 days after payment and may cover intangible items.

If a buyer has opened a claim with PayPal and they then file a chargeback, PayPal will close their claim and the buyer will have to rely on chargeback rights.

What if a buyer used PayPal on eBay?

Buyers paying via PayPal for items bought on eBay are also protected by eBay's Money Back Guarantee policy. It can be used for problem eBay items, such as those not being 'as described' or not received.

Like PayPal, if a buyer files a chargeback with their bank, eBay's Money Back Guarantee will no longer pursue the claim.

There are differences between the eBay scheme and chargeback with banks, around timeframes and eligibility requirements.

And, again, a buyer can't seek resolution through PayPal and eBay systems at the same time.