Selling Domain Names & PayPal Disputes: How To Protect?

[Nattydomain]

I already know that unless you really trust the person (and even then it can go wrong) or it is a very small amount, what should we do to protect ourselves from a chargeback or dispute when it comes to a domain name paid with PayPal.

Should we take a snapshot of the Whois BEFORE we transfer the domain? What steps have you took to protect yourself in this case AND has it worked in your favor against a dispute?

Thank You

 

[Keith]

There is no recourse if you use Paypal and the deal goes sour. Use Escrow instead.

 

[The New Guy]

Don't use paypal. Learned that lesson years ago with something non-domain related.

 

[Name Trader]

I agree with Keith. There is no recourse from PayPal if your buyer does a chargeback on a domain sale. I always use Escrow.com for my domain sales unless I am very familiar with the buyer. I make the buyer pay the escrow fees, because Escrow.com charge between $40-$60 for an international wire transfer when they make payment to me.

 

[forge]

I agree with Keith. There is no recourse from PayPal if your buyer does a chargeback on a domain sale. I always use Escrow.com for my domain sales unless I am very familiar with the buyer. I make the buyer pay the escrow fees, because Escrow.com charge between $40-$60 for an international wire transfer when they make payment to me.

Even with Escrow it can go sour early on, and virtually no recourse. I've had no issues with PayPal with my limited NP transactions as well as outside ones, but then I probably just have not had my first. I just had a "buyer" agree to $4800 price, signed in with Escrow, both agreed to terms, and then nothing, 10 days later Escrow cancels transaction, end of story. My domain was never in jeopardy, of course.

 

[Nattydomain]

I had the issues with buyers not going forward after sigining in as well with Escrow. I generally ask "what happened" and they either back out OR were not sure how to do it and we try it again.

I know not to use paypal generally but just thought maybe there were some new news on the subject.

 

[forge]

I know not to use paypal generally but just thought maybe there were some new news on the subject.

I think the big issue with domains and PayPal is the fact they're considered "virtual property" and not covered by their usual Seller protection policies. But you probably already knew that.

 

[Nattydomain]

Yep I did, just thought maybe they changed their ways on it

 

[Name Trader]

@forge - Yeah. But if it goes south on Escrow.com you don't lose your domain. As you said.

 

[NameOmnia]

You can simply create an Ebay listing and you will be covered when using PayPal.
Or use Ecop which is better for non-US transactions

 

[Nattydomain]

You can simply create an Ebay listing and you will be covered when using PayPal.
Or use Ecop which is better for non-US transactions

I know ebay and paypal are one but are you saying that since it was an ebay transaction that they will back me up on it ?

 

[NameOmnia]

That is what I understood but please double check ( and let me know!!!! :p )

 

[The New Guy]

I know ebay and paypal are one but are you saying that since it was an ebay transaction that they will back me up on it ?

Do not believe that. In a dispute ebay will side with the buyer almost every time. The seller protection is meaningless.

 

[NameOmnia]

When you sell on ebay the buyer pays first and then you transfer the domain so as a seller you are always covered.

When you buy and you pay through PP you are covered up to 1k I think but as I said the OP should double check to be sure

 

[The New Guy]

When you sell on ebay the buyer pays first and then you transfer the domain so as a seller you are always covered.

Until the buyer complains to paypal / ebay and they take the buyer's side.

Google stories on ebay's seller protection and how meaningless it really is.

 

[lennco]

@forge - Yeah. But if it goes south on Escrow.com you don't lose your domain. As you said.

Yes you can lose your domain by using Escrow.com.
I wont go into it here but there is defiantly a way to steal ones domain by using Escrow.com

I have used PP for years and I haven't been screwed yet (yet being the key word)
The one thing I always do is, I never allow the buyer to just deposit money in my PP account with my email address.
I Always create a PP invoice with as much as their info as I can get.
I send that to them listing it as a Domain Purchase with the domain name listed.

Now, this doesn't mean they cant steal my domain but the more official it appears the better chance of them not trying to scam me.
I always take a snapshot of the Whois the moment they transfer the domain, even when I use Escrow.com.
After the transfer is complete I always send an email to the buyer thanking them and telling them their transfer is now complete and I attach a snapshot of the whois showing their info.

By sending them an invoice they at least acknowledge they were billed and they willingly paid.
This doesn't necessarily guarantee me that I wont get scammed but what it does it create a virtual paper trail and then I can try to go after them or at the very least trash them on the internet (forums, bogs) so the next domainer hopefully wont get screwed be them.

Now, when using Escrow.com I always approve the transfer of the domain during Escrow.com's business hours, and the moment the transfer goes through I take my snapshot of the whois and then I call Escrow.com immediately and I get them to also take a snapshot and then they start the clock at that moment.
I always choose 1 day inspection period.

I also recommenced never letting the buyer start the Escrow process. otherwise they may pick a long inspection period like 15 days. Always start the escrow process yourself.

 

[Nattydomain]

I thought about taking a snapshot of the whois etc, I never had an issue with escrow but down the road for PP and sales over $100 I kinda wanted to cover all bases

 

[Name Trader]

@lennco - You can always change the 15 day inspection to 1 day. The buyer actually doesn't require any more than 1 minute since you are transferring a domain name and the whois is in his name. But I agree with you about the seller should be the one to open the Escrow, since you can control these things from the outset.

I'd like to here more about how you can lose your domain and money at Escrow.com, since Escrow are instructing you to transfer the funds, it means they have the money, and once the inspection period has begun, they will pay you at the end of the inspection period. They take the risk. I'd appreciate a PM. I understand why you wouldn't want to make this public

 

[SearchEngineZ]

All business deals carry risk. You need to accept that sometimes you will lose, and do your best to limit your losses.

My PayPal threshold is $500. Above that I use Escrow.com (they pay) and above $1000 I split the fees.

I reckon I have had about 100 private sales via PayPal and no chargebacks. I could just be lucky, or I might just have domains that don't appeal to thieves.

 

[Name Trader]

@SearchEngineZ - I think it must be the latter

 

[DnEbook]

Anyone using sedo escrow ?

 

[infosec3]

I sell a few domains per month, all using PayPal invoice. However, I am fully aware that if something were to go wrong, PayPal will always side with the buyer when it comes to virtual property. Now, make no mistake, I would not use PayPal for transactions over certain amount or even for lower amounts when dealing with unknown buyers who are not recognized business owners.

Most of my sales are between $200 and $750. For those, I generally use PayPal.

In reference to PayPal and Ebay, I recently had two bad experiences with transactions that are not related to domain names. I lost $200 on the first and $24 on the second transaction. I had recently (for the first time) invested in Litecoins and a GHS voucher. I had a second thought and decided to sell those on Ebay, which I did. The buyer for each transaction paid (two different buyers), but in both cases, the buyer made a charge back. The money was on hold for a few days. I contacted both Ebay and PayPal and, after their supposed "investigation", they returned the money to the buyer.

I continue to use PayPal for domain sales, because I find it easy and convenient, but I do so with care and make sure I know who I am selling to and also have a backup plan on how to get back my domain if the client does a chargeback.

I may never use Ebay again. It is full of scammers and to make things worse, Ebay is facilitating this by not letting you leave negative feedback for a buyer that scammed you. Yes, that is right. On the last $24 I lost, I attempted to leave a negative feedback for the buyer (scammer) and was unable to do so. The only option Ebay gives you is to report the buyer (scammer) to them (big deal) and to this date, the scammer is still active and with 100% positive feedback so she is free to continue scamming Ebay sellers. Totally absurd.

In summary, PayPal is a great tool, but you need to be extremely careful, because PayPal does not protect the seller of virtual or intangible property.

 

[Name Trader]

I'm sure I'm not the only one who would like to know your backup plan on getting your domain back should the buyer do a chargeback on PayPal.

 

[infosec3]

I have all my domains registered with Godaddy. All the domains I sell using PayPal invoice are pushed to the buyer's account with Godaddy. If the chargeback occurs during the first 15 days, I have the following recourse:

"If for any reason this information is incorrect or you feel this change of registrant request was made in error, please contact us within 15 days at [email protected]."

Yes, I know the buyer could do a chargeback even after those 15 days. This is why I said I only sell to buyers who are recognizable business owners or who I trust. There is still risk, but there are ways to minimize it.

 

[JayJay]

Anyone using sedo escrow ?

I just recently did and to be honest it was way easier than what Im reading in this thread and I dont really see any way I could have gotten screwed over by the buyer. Not to mention the money was direct deposited to my bank the very next day. Im sticking to Sedo from now on.