We have discussed using PayPal as a payment gateway for your small business. Are you aware of their new policy changes that effect you, the small business owner, directly? One thing most people (in general) do not do their due diligence to is reviewing companies terms of service, privacy policies, and other policies companies might have in place. Here is a quick break down of PayPal policies.
Dispute Filing Window
We’re increasing the time for buyers to file a merchandise dispute (Item Not Received and Significantly Not as Described) from 45 days to 180 days. All references in the User Agreement to “Opening a Dispute within 45 days” have been updated to reflect “Opening a Dispute within 180 days.” The Sections these changes appear in include the Introduction, 3.15, 13.2, and 13.5.
Section 11.1
11.1 PayPal Seller Protection.
PayPal Seller protection is protection we provide Sellers from Claims, Chargebacks, or Reversals that are based on:
- Unauthorized Transaction or
- Item Not Received
Section 13.3
We’re extending buyer protection for all buyers to include Item Not Received claims for custom-made products. In Section 13.3, we have updated the exclusion description clarifying that only Significantly Not As Described Claims for Custom-Made items are ineligible for Buyer Protection. “Significantly Not As Described Issues for Custom Made Items.”
13.3 Ineligible Items. PayPal Purchase Protection only applies to PayPal payments for certain tangible, physical goods. Payments for the following are not eligible for reimbursement under PayPal Purchase Protection:
- Intangible items, including Digital Goods
- Services
- Real estate, including residential property
- Businesses
- Vehicles, including motor vehicles, motorcycles, caravans, aircrafts, and boats
- Significantly Not As Described issues for Custom-made items
- Travel tickets, including airline flight tickets
- Items prohibited by the PayPal Acceptable Use Policy
- Items which you collect in person or arrange to be collected on your behalf, including items bought through In-Store Checkout at the retail point of sale
- Items that violate eBay’s Prohibited or Restricted Items Policy
- Industrial machinery used in manufacturing
- Items equivalent to cash, including prepaid or gift cards
- PayPal Direct Payments
- Virtual Terminal Payments
- Personal Payments
What these changes mean to your business:
Dispute Filing Window
Is a huge game changer for the small business owner. Now customers can have items for longer times and wait to dispute claims regarding your merchandise. Going from 2 & 1/2 months to virtually 1/2 a year is huge.
How to Protect Yourself
Make & sell quality products! That’s all you can really do. If you sell crappy stuff it will be returned. Even if it has been 179 later.
PayPal Seller Protection
Chargebacks and reversals can be nerve wrecking. Filing disputes can end up with your account being frozen and more.
How to Protect Yourself
Make sure you have customers sign for items over $100 value mark. Provide tracking for every item you sale.
Buyer Protection
Custom orders are now included in the buyer protection plan. I know several people who use to lean heavily on this clause. Basically giving them an excuse for being late with shipping or selling items that are not exactly like what the person purchase.
How To Protect Yourself
Do your due diligence in describing merchandise to the last detail. Take accurate photos of your products. Make sure that you note on your website if items are made to order and how long it takes to ship. Make sure to ship out in a timely manner.
The best protection is understanding what the PayPal policy means exactly for your small business. You can familiarize yourself with PayPal Policy through this link.
