PayPal WILL NOT refund for domain names

[circa1850]

In another post, I made mention of PayPal having a policy of not refunding money for the purchase of a domain name, should you get stiffed by the seller.

Perhaps all domainers are unaware of this issue and will be until the time comes when they resort to filing a claim after not receiving a domain name.

Unfortunately this was the case for me a little over a year ago.

I ended up, over a period of several days, purchasing many domain names from the same seller on ebay. The reputation was good, initially there was fast transfer and decent communication. All told, I ended up buying 27 domain names.

Over the course of time, things began to get very slow. Then no contact, no communication, no response. Meanwhile, all domain names had been paid via PayPal and all transfer requests and fees had been paid on my end.

After numerous attempts to contact the seller and being ignored at every turn, I filed a complaint within the alloted time frame for the domain names that had not been transferred.

Keep in mind that these were items (domains) purchase on eBay, items (domains) paid for with PayPal...an eBay owned and operated company. I figured I could not loose as I, and eBay as well as PayPal, had all the proof needed to show that this was a transaction that has gone sour. My proof, as I pointed out, the the seller still had not transferred the domain names and still had them in his accounts could be verified by conducting a WHOIS search. I provided PayPal's complaint department with a direct link to conduct a WHOIS search. Case closed.

Indeed, the case was closed...in two days.

Non-receipt - Case ID: PP-107-xxx-xxx

Oct. 8, 2005 PayPal Case closed
Oct. 8, 2005 PayPal Claim denied.
Oct. 8, 2005 PayPal Email sent to Buyer.
Oct. 6, 2005 PayPal Case in Review.

We have completed our investigation of this case. We have denied this claim and a refund will not be issued.

The result was that PayPal had found in favor of the seller.

I could not believe what I was reading.

I immediately emailed them back, explained and appealed again my position, and how could they come to such a conclusion in such a short period of time.

Their reasoning? Domain names are intangible goods.

Take a look at PayPal policies regarding this:

Q. Does PayPal Buyer Protection cover all eBay categories?

A. The item for sale must be a tangible product that can be sent by post.

PayPal's Buyer Complaint Policy does not apply all intangible goods, virtual products (for example: subscriptions and computer programs), services, and quasi-cash.

...

As well as this policy:

Q. What goods and services are not covered under the Buyer Complaint Policy?

A. PayPal is committed to ensure that all transactions are safe and secure. One way we do this is by providing specific terms and conditions that all members must comply with. PayPal's Buyer Complaint Policy does not apply to virtual or intangible products (like subscriptions and computer programs), services, quasi-cash and all non-tangible, non-physical goods.


In the response to my appeal, the rep at PayPal deemed my purchase of 19 domain names as intangible property and virtual goods therefore not eligible for refund. PayPal, I was told, would not re-open the investigation and the case was closed.

Even with all the proof they already had and the resources available for validating my claim, there essentially was no investigation necessary or conducted.

I eventually got the domain names about 140 days later through a process of contacting the sellers registrars' legal team and as well as the Internet Fraud Team of the United Kingdom. The seller, most likely from pressure of the registrar, relinquished the domain names to me.

This was quite a hassle and, needless to say, quite an eye opener.

I am sure that most domainers on this forum and other forums have a sense of trust with other members. Reputation is good. But, just like this forum, the seller I was dealing with had 100% feedback totalling in the 200's, if my memory is correct.

So be careful paying for any domain to anyone using PayPal. This may be a rare instance, you say, but only rare to you if you have not heard of this sort of thing happening.

 

[circa1850]

works the same way sending. You pick a thing, goods in this case, a subject line and comments. Whens the last time you sent a payment? its all there.

I'm sorry, you seem to be missing the whole point of this post and the threads.

You buy a domain name. You decide to pay via PayPal. So you pick goods. Then what? You don't get the domain.

What do you have? Nothing. You have to prove to PayPal that you paid for some "goods". What are you going to tell them you bought? Goods?

What kind of goods, is what they will want to know. Do you think PayPal is going to award you a claim without any proof of the items you purchased? Do you think PayPal is in the business of giving money back based on an individual's word that they did not receive something they paid for?

Yes, its all there. You pay, you get no domain, you're screwed...it's all there.

When is the last time I used them? Lets see...ask any of the members that I bought domains from on this forum how I paid them.

Why do I still use them? Convenience. Faith...hoping that this was a one time isolated incident for me. And faith that members on this forum, based on how long they have been members and based on their feedback, are decent and honorable folks.

And knowledge...knowing now what I have been through and the course of action I will have to take to either secure the domain name or return of funds because PayPal ain't going to do sh** for me and the credit card companies will bow down to them like a whipped dog with it's tail between it's legs. That is the price they have to pay to do business the PayPal way.

 

[Erdy]

Hello circa,

You are right about this issue. I'm an experienced ebayer and I have seen many smillar issues over the years. I have a few suggestions on this issue:

1. Use paypal for low value domains. Otherwise use an escrow service. Escrow.com or sedo.com are good options.

2. When using paypal to pay for domains only buy from people with good feedback. Good feedback in my opinion means over 50 feedback with %98 positive. This applies to forum sales as well.

3. If you don't receive the domain you must leave negative feedback. As a buyer this is your only chance to get the issue solved or at least to warn others. On ebay feedbacks can be removed upon agreement by both parties, so the seller is likely to try to get it removed. This is your only chance. Wait 10 days and immediately leave negative. Don't think about your own feedback.

4. On ebay some of the domain sellers are known to do shill bidding. They are creating buyer accounts and bid on their own item to make the auction look more desireable and to bump the price up. This means their seller feedback is fake as well because they leave positive to themselves when they end up winning their own item. Ebay never takes action agains this and they are changing their system continuously making it difficult to track these actions. Still there are tools where you can check this. So before you bid simply put the item number in one of these and check:

http://auctionpix.co.uk/shill_bidding.php
http://www.goofbay.co.uk/ebay_tools Regular Bidder Checker (Enter eBay Item Number)

5. Never buy on private ebay listings. The seller is trying to hide the negative he just received.

 

[ukguy]

Let's just say someone, obviously, from Great Britain. I would rather not disclose this for the sake of liability or slander. Plus, lets give him/her the benefit of the doubt...email issues, if that will do it.

hahah wasn't me (ukguy!). Didn't even know about DN trading then Wish I did!

You should (as they say here) "name and shame" - to help others - else he/she might do it again.

 

[circa1850]

"I'm an experienced ebayer and I have seen many smillar issues over the years"

Thank you, I've been on for nearly 8 years now.

"1. Use paypal for low value domains. Otherwise use an escrow service. Escrow.com or sedo.com are good options."

Good point, often repeated, but worth mentioning again.

"2. When using paypal to pay for domains only buy from people with good feedback. Good feedback in my opinion means over 50 feedback with %98 positive."

A first time for everything as this seller had 100% and quite a volume of positives.
CAUTION! BEWARE OF ALL FEEDBACK. One of the biggest scams at the moment is artificially inflated feedback from penny auctions. There are sales on ebay that sell a list of other auctions that sell for one penny. Instant positive feedback is left once the sale is conducted. It is possible to run up hundreds of positives in a day.

"3. If you don't receive the domain you must leave negative feedback. As a buyer this is your only chance to get the issue solved or at least to warn others."

Always have and always will. Not just dealing with domain names.

"Don't think about your own feedback."

Never have and never will. As both a buyer and seller, I feel I have an obligation to leave feedback for every transaction...the good and the bad. I have known sellers with 100% and tens of thousand feeback and been on ebay for nearly 10 years. Ask them how they managed that? "oh, we never leave negative feedback. We're afraid they'll leave us a negative too"...gee, thanks for letting the trolls stay on ebay!

"4. On ebay some of the domain sellers are known to do shill bidding. They are creating buyer accounts and bid on their own item to make the auction look more desireable and to bump the price up."

Happens in every class and category of auctions. Have caught several doing this. Yes, three were domain sellers. The WHOIS record does not lie.

Here's how I caught them. Check the seller and the suspicious bidder. Domain goes up and up and up against you by the same bidder. The other bidder wins (I backed out). Feedback is left by both seller and buyer...glowing, simply glowing...praises all around. I just got a little suspicious with the bidder (checked his feedback...36 positives) yet the only auctions he/she had ever won were from the same seller. Hmmm...decided to see who the seller was through WHOIS...checked out the winning bidder through WHOIS...oddly enough, nothing ever changed.

"So before you bid simply put the item number in one of these and check:
http://auctionpix.co.uk/shill_bidding.php
http://www.goofbay.co.uk/ebay_tools Regular Bidder Checker (Enter eBay Item Number)"

Looks interesting...I'll have to check them out.

"5. Never buy on private ebay listings. The seller is trying to hide the negative he just received."

The seller usually is hiding alot more than a negative. If you are referring to true private listings, where the user ID is kept private, RUN AWAY AS FAST AS YOU CAN! There's usually a whole slew of shill bidding going on or his buds are bidding.

You should (as they say here) "name and shame" - to help others - else he/she might do it again.

I don't think they will every be allowed back on ebay. But you never know. Could be lurking anywhere.

 

[Ronald Regging]

Im kind of on the other end of this, but your post clarified some concerns I was having. Basically I sold a domain on Ebay... Buyer took forever to pay, no communication at all. Then I pushed the domain to him and he doesn't seem to be accepting it. I emailed him numerous times to see if he needed help with anything etc, but I haven't heard a single word from him the whole transaction. I'm just worried I'm going to get a chargeback on Paypal or something to that effect. I already spent half the money and if they do some kind of chargeback, I'm going to be screwed basically I'm just looking forward to getting the domain transfered and out of the situation, but they seem to be dragging it out as long as possible.

 

[DropLister]

The point of doing the thing i posted is so you can tell paypal the goods were not shipped.

 

[blue^ray]

well this does protect the seller and not the buyer. the good thing is

buyers cannot request a refund - will be denied

but then again in your case you can get screwed over.

 

[circa1850]

I'm just worried I'm going to get a chargeback on Paypal or something to that effect. I already spent half the money and if they do some kind of chargeback, I'm going to be screwed basically

Interesting scenario. And not one that I am too distant from.

First: I am not your lawyer, I am not offering you legal advice, I do not work for PayPal, I do not work for eBay, I do not work for NamePros...so lets get that out of the way right now. You don't have to take any of my advice. There, that's my disclaimer.

Doubtful there will be a chargeback. Why? Because of everything I have stated above regarding PayPal's own policies. If you sold a domain (non-tangible property), regardless how it was described on the paypal invoice (goods or whatever) it is still non-tangible property. Chance are it was paid directly through ebay and PayPal channels so the actual item and auction description will appear.

Let the buyer drag their feet. Email them about once a week reminding them of their purchase and offer to help transfer if need be. Use both the eBay and you own email system. Ebay keeps track of all emails. You can keep track of your own. Keep the domain name unlocked and ready for transfer. Remind the buyer when the domain is due to expire. Remind the buyer that they are responsible for securing the domain name.

You will at least have a record of your effort to complete the transaction as well as do the right thing. Each message you send through ebay indicate the box on the bottom left to send the message to yourself. Create and use your own form letter so you don't have to keep typing an individual letter each week. Do this for a couple of months so you have plenty of evidence of your effort on your part.

If the domain name expires? oh well. And if they insist they want their money back due to this? oh well. You gave them plenty of notice and what the potential risks of not securing the domain name in a timely manner. They file a claim with PayPal? oh well..."non-tangible" goods is not eligible. They want the domain name? oh well...it expired and now someone else owns it.

If the domain name is about to expire, let it expire. Do not try to resell it. Do not renew it. If it is a gem, I think there are ways around this.

So, the buyer won't complete the transfer, you have emailed once a week for several weeks. You have a record of this. Ebay has a record of this. What more can you do.

It is not a bad idea to put your terms in the auction listing. Expiration date, buyer's responsbility, seller's responsibility, etc. It can be quick, cut and dry or spell out everything explicitly. But have it in there. I'll be glad to PM you an example.

I have sold more the 600 domain names on ebay in less than a year and a half under another name. The two issues that struck me the most were non paying bidders (of course) and folks like you're describing who do pay and never take control of or transfer the domain.

I quit selling on ebay because within about a two to three week time frame, 75% of bidders were non payors. And then there are the trolls watching the auction and not bidding and then making you a ridiculous offer after the auction and then cussing you out for turning them down. Great possibilty they have either been kicked off ebay or their feedback sucks.

After a while, I quit worrying about the ones who do not transfer their domain name. Then all of a sudden they appear out of nowhere wanting the domain, wanting to know what they have to do, where is the domain name, etc.

Expired, long gone, you ignored every email, you lost it. How could you let this happen?

The best one? Contacted me not more than 2 weeks ago for a domain I sold in February or March and expired in June.

Guess what? Same crap happens on TDNAM.

well this does protect the seller and not the buyer. the good thing is

buyers cannot request a refund - will be denied

but then again in your case you can get screwed over.

Well, now you are seeing the whole picture.

The seller needs no protection to begin with. If the seller is intent on screwing over the buyer, it does not matter how its listed as a category of payment. If it "goods" the buyer will still have to identify the "goods" to PayPal, describe it, and then prove the "goods" were never received.

So why even bother putting in "goods"...put in the domain name you sold in big bold type. If one is intent on screwing over someone, then this is the way to do it...it automatically tells PayPal that this was a domain name, it is "non-tangible" and "virtual" property. Therefore, there is no need to investigate. Claim denied. Case closed.

I assure you, as a seller it does not matter how you identify the merchandise. As a buyer, it does not matter how you identify the merchandise. A domain name is a domain name is a domain name.

PayPal WILL NOT refund for domain names

It is that simple...cut and dry...no way around it.

 

[vincenzo]

Interesting read.

By the way:

But Visa is Visa and they all operate on PayPal's rules...no matter who the issuing institution is.

I thought they all had to abide by the law, in this case the consumer credit act - at least in UK they do. Is there nothing similar in USA?

I just signed-up with Escrow.com but seems they are better for US clients, as money transfers to seller outside the US are very expensive.

In regards to Paypal and intangible goods, they really need to change this policy for domain names, as it would be the simplest to check ownership either via WhoIS or directly with registrars if required.

Maybe they don't realise how much trade they could be losing with the current attitude?

- Vince