How to protect yourself selling thru PayPal

[abcproductions]

I've read several posts from domain sellers who feel Paypal does not protect them since selling a domain is considered a non-tangible item by Paypal, which can lead to a possible reversal of payment if the buyer files a complaint.

There is a solution for this.
Instead of making the transaction the sale of a domain, make it a sale of paperwork that includes the authorization code needed by the buyer to assume ownership. In other words, let the buyer know you are selling them the authorization code that will allow them to transfer the name into their account and you will be physically sending them this code via USPS Priority Mail with delivery confirmation, FedEx or UPS. (You can still email the buyer the code if you want.) By making the sell for paperwork that includes the authorization code and physically sending this paperwork with a tracking number to a confirmed Paypal address, Paypal will protect you from a possible reversal. Remember, it must be a confirmed Paypal address.

 

[abcproductions]

I've had literally thousands of transactions over paypal and I have not once been scammed (knock on wood, of course).

95% of the time i feel comfortable enough to accept a Paypal payment for a domain and then push or transfer as well.

 

[Earthian]

have you checked SEDO's Escrow for outside transactions ?


it costs 3% if the domain is not listed for sale on SEDO ... there is is $50 minimum but I think there might be a legal way to avoid it ... check post #19 in this thread


it accepts PayPal and CCs (CCs up to $500) ... since SEDO is a reputed company and can prove that the transfer did occur , I think PayPal would logically manage to defend (dispute) a possible CC chargeback


it would take a little longer than a PayPal-push transaction but it adds a level of security towards CC chargebacks ... cost for it (if the method described in post #19 in the thread above is correct) would be 3% which is the same as PayPal fees for accepting a payment with a Premier or Business account

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[cache]

anyone has tried this and it worked?

 

[fonzie_007]

anyone has tried this and it worked?

I think you are asking if anyone has tried this procedure of paying for the mailing of auth codes, been ripped off, then petitioned to Paypal for a refunded, and received a refund from Paypal. Has this occurred to anyone?

On another note, auth codes can change. They are NOT set in stone. So there is always a possibility the scammer changes them.

 

[abcproductions]

anyone has tried this and it worked?

As I mentioned previously in this thread, I've used this method and it is as simple as selling a gift certificate. After the buyer receives the certificate, they can redeem it for the domain.

 

[netklick]

As I mentioned previously in this thread, I've used this method and it is as simple as selling a gift certificate. After the buyer receives the certificate, they can redeem it for the domain.

I like the concept. Paypal hides behind their "It's digital" wall and this will just fix it if the buyer is legit. Scammers probably won't have a confirmed Paypal address and probably wouldn't want to buy from you if you use this method - which is good and will minimize the risk of selling through paypal.

Let us know if anyone ever get scammed when using this method too.

 

[Earthian]

from a seller perspective this method could work ... the transaction would be for the letter and the domain would be a free gift ... since there would be the proof of receipt of the letter , PayPal will logically be able to dispute the chargeback with the issuing bank





from a buyer's perspective , though , there is a problem ... buyers many times use CCs (with PayPal) knowing that if the seller is a scammer , they can chargeback the transaction and get their money back ... that is a layer of protection that CCs provide for a legit buyer facing a scammer seller ... in this case the legit chargeback would be disputed since the scammer seller will have a proof of receipt of the letter (while he hasn't actually send the domain) ... therefore a buyer might be hesitant to accept this method





in my opinion , if a seller does not know the buyer or does not have enough evidence that the buyer is legit (eg. high feedback or trader rating) or if he wants to be more secure in general , an escrow should be used (especially as the transaction amount rises) ... same goes for the buyer if he is not certain for the seller ...

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[abcproductions]

from a seller perspective this method could work ... the transaction would be for the letter and the domain would be a free gift ... since there would be the proof of receipt of the letter , PayPal will logically be able to dispute the chargeback with the issuing bank.
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It does work. There is no could to it.

This post explains a way for sellers to protect themselves from a Paypal reversal. A CC chargeback is a completely different issue. A buyer can file a credit card chargeback even if they pay through escrow.

 

[Earthian]

the could part was referring to the buyer's hesitation part ... it is not only important that the seller is secure but it is also important that the buyer feels secure (as well as that he needs to feel secure to proceed with the transaction) ... alternatively , if the buyer does not want to proceed with the transaction then this method would not "work"





basically , I thought you meant about PayPal reversals in general (PayPal complaint or CC chargeback) ... but even with simple PayPal reversal through a complaint , the buyer is not protected with this method against a scammer seller (while also losing his chargeback rights) who sends a letter saying "hello" and does not send the domain ... so logically the buyer would not accept using this method (because he could end up paying 200 bucks for an envelope with no complaint or chargeback rights)





I am not trying to devalue your idea , but the above mentioned justified buyer's precautions together with the somewhat cumbersome and time-consuming procedure of sending a letter lowers the possibilities for a buyer accepting this ... eg. it could take many days for the letter to reach the buyer who would be worrying whether the seller withdraws the PayPal payment and runs ... sometimes you agree "live" for a domain transaction on a forum and if the seller takes too long to send it over after the payment you start worrying about a scam ... if it needs a week for the letter to arrive these worries would be even worse ... especially since there would be enough time for a scammer to withdraw the funds from the PayPal account





regarding chargeback through an escrow ... if there is a respected intermediate company between the buyer (who used a CC) and the seller ... chances are that they could more easily prove that the transaction concluded successfully and dispute the CC chargeback from the issuing bank ...

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[Dotmainer]

thx Earthian, that was what i was trying to tell

(cant give you reps ... must do first someone else)


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[abcproductions]

... but even with simple PayPal reversal through a complaint , the buyer is not protected with this method against a scammer seller (while also losing his chargeback rights) who sends a letter saying "hello" and does not send the domain ... so logically the buyer would not accept using this method (because he could end up paying 200 bucks for an envelope with no complaint or chargeback rights)
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This thread was started to discuss a way for Sellers to protect themselves from a Paypal reversal. I did this because several fellow domain sellers have lost their domains to fraudulent buyers through Paypal reversals.

Zoki, I did understand your point that a scam seller can get over on a buyer using this method...but, once again, this post was intended to present sellers with methods of protection.

If either of you want to start a thread to discuss things buyers can do to protect themselves in a domain-purchasing transaction then go ahead. i can think of several things that buyers can do to protect themselves as well.

 

[Earthian]

again , I am not trying to devalue your idea but ... if the buyers don't accept this method then how can a seller use it ?


furthermore , someone in business (or trade) must respect his buyers and not put them in a difficult position just so that he can feel more secure ...


voiding both the complaint and chargeback rights "might be convenient" for a legit seller to protect against fraudulent buyers ..., but what happens when the buyer is legit and the seller is a scammer ? why would the buyer get in a transaction that he has zero protection ?


regarding starting a new thread ... I already started one about Payment Methods For Domains a couple of months ago which is for domainers in general (both buyers and sellers)

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[abcproductions]

voiding both the complaint and chargeback rights "might be convenient" for a legit seller to protect against fraudulent buyers ..., but what happens when the buyer is legit and the seller is a scammer ? why would the buyer get in a transaction that he has zero protection ?
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this method doesn't void a buyer's chargeback rights so the buyer doesn't have zero protection. this method merely prevents buyers from obtaining an easy and immediate Paypal reversal.

 

[Earthian]

I think a seller must also see the buyer's side ...




a buyer must have the right to start a PayPal complaint if the seller is a scammer ... with this method it would be very difficult to win the complaint ...




how come it doesn't void a buyer's chargeback rights ? ... if a buyer requests a chargeback from his bank ... the bank forwards the chargeback to PayPal ... and PayPal responds (technically disputes the chargeback) while providing the proof of receipt as evidence ... then how exactly his chargeback rights are reserved against a scammer seller who sent a "hello" note in an envelope ? ... the transaction is for the envelope , trying to explain to the bank that there should be a domain also ... or trying to prove to the bank that you did not receive the domain would not be easy ...




I'll ask you this ... if a seller asked you to buy a domaing using this method , would you do it ? if he is a scammer your money is gone ...





I don't want to seem like I am "attacking" your idea ... but this method could only work with a very reputable seller selling to an unknown buyer who for some reason is willing to lose his complaint and chargeback rights (and trust the seller that he won't scam him) ... alternatively , the buyer would not enter in such a transaction

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[dynn]

nice info..thanks for sharing

 

[abcproductions]

how come it doesn't void a buyer's chargeback rights ? ... if a buyer requests a chargeback from his bank ... the bank forwards the chargeback to PayPal ... and PayPal responds (technically disputes the chargeback) while providing the proof of receipt as evidence ... then how exactly his chargeback rights are reserved against a scammer seller who sent a "hello" note in an envelope ? ... the transaction is for the envelope , trying to explain to the bank that there should be a domain also ... or trying to prove to the bank that you did not receive the domain would not be easy ...
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just because you're protected against a Paypal reversal does not mean you forfeit your credit card chargeback rights. for example, say you purchase a $100 gift certificate and the seller sends you an expired gift certificate. if he sent it with proof of deliver (delivery confirmation, registered letter, signature confirmation, etc) to a confirmed Paypal address, Paypal will likely not allow for a payment reversal. However, you can file a chargeback with your CC company and they will investigate your claim more thoroughly. Many times they will contact the seller directly to see what kind of proof he can supply (other than proof of delivery) that a legitimate gift certificate was indeed sent. The seller will have the burden of proving he didn't just send you an empty envelope or similar. If you have a good history with your CC company, the chargeback will likely be resolved in your favor.

I'll ask you this ... if a seller asked you to buy a domaing using this method , would you do it ? if he is a scammer your money is gone ...
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As I do with all sellers I deal with, I would check their references and past domain transaction history and if I find that other buyers had similar successful transactions with the seller...YES I CERTAINLY WOULD.

Lastly, I'm done communicating with you regarding this. Good luck in your transactions no matter what side you are on.

 

[Earthian]

this is a public forum and ideas are supposed to be exchanged , I am not "attacking" your method I am just checking the various sides of it especially for newer domainers to understand what it involves ...






the buyer hoping that the bank will get so much involved for a low amount domain transaction (since I think you do suggest escrow for higher amounts) after a proof of receipt has been submitted is not really reassuring enough for the buyer so as to put himself in a difficult situation like this ... it is a lot safer to not give the evidence of the "proof of receipt" to the scammer seller in the first place ...






do you think he would be able to explain with a serious face to the bank customer service agent that he bought an envelope with a note in it for $100 with a free-domain-gift ?

or you think that he can ask (without a lawsuit) the registrar to send information about another person's account to the bank so as to prove that he did not transfer the domain ?

the seller might even make a bogus transfer (to himself or a friend) and provide that as a proof that the domain was transferred ... he could even make a fake email that the buyer asked him to transfer the domain to that email address (which is actually his or his friend's) ... do you think the buyer would go to court to dispute all this for a low value domain ? because the bank logically ain't gonna dig further than that






don't you think that all this mess can be easily avoided with an escrow service ? (supposing that the buyer and seller don'y know/trust each other)






anyways if you think this is a good method , go ahead and use it ... I think you will find it somewhat cumbersome ...

I suggest either know the buyer ... take a calculated risk (eg. with his feedback/trader-rating) ... or use escrow

good luck with your transactions too

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[Dotmainer]

abcproductions ... this is part about sellers, i would not bid at such auction, or buy such name where i get only letter (and bonus domains) because it sounds fishy for me ... and i'm sure there are more buyers that simply wouldnt bid / buy in that sale, just because its too complicated.

So its possible that with this method as SELLER you get less bids, and you sell domain for lower value.

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