PayPal: More Buyer Protection? What About Seller Protection?

I like PayPal and will continue to use PayPal. Of course, there is nothing wrong with Buyer Protection, but what about Seller Protection?

I’ve seen endless advancements in Buyer Protection, but does Seller Protection even exist?

Just received the following from PayPal:

Hello Bryan Hadaway,

As of 11/01/10, your customers who pay with PayPal are protected for items they receive that are “significantly not as described”. This means that you may be liable for the cost including the original shipping charges should they file a claim. However, by offering this protection, PayPal helps encourage customers to shop on your site.

We recommend that you make sure that photos and written descriptions on your site are as accurate as possible, to help avoid these types of claims.

The change to our buyer protection policy will take effect from November 1st, 2010 and won’t apply to transactions made before this date.

To learn more tips to ensure a good buying experience and avoid claims, click below.



Not everything revolves around eBay and tangible products. A lot of freelancers that offer digital services are left out in the cold and many have probably experienced “Buyer Protection” being used in a shady manner, even those who sale tangible goods and products. It’s happened to me. I’m sure many others have similar and even worse stories.

When someone thinks of Seller Protection they can probably poke a lot of holes in it right away. That being true, it’s no different for Buyer Protection. What I propose for Seller Protection is an optional No-Refund Agreement. For those sellers that have been burnt in the past and can compromise with the inevitable loss of customers, they can set their items and services as only purchasable if the buyer checks a box to agree to a No-Refund Agreement.

Why would a buyer agree to that, well it’s no different than buying music from Apple or buying downloads from Microsoft, you also agree to no refunds. It’s about reputation and trust, high ratings, etc., for a buyer to agree to something like that. I’m only talking about a monetary refund. If someone gets something delivered broken or it’s the wrong item or size they can still have that resolved, of course.

Again, I want to emphasize that this would be an optional feature for sellers and would be in no way forced on seller or buyer.

UPDATE — Turns out, there is indeed PayPal Seller Protection, but it’s just not quite as effective as Buyer Protection yet.

I’ve posted here on the official PayPal forums and to my surprise, I did receive a response that my suggestion would be forwarded along. I’m not getting my hopes up, there’s no way to know if the suggestion will actually be forwarded along or be taken into serious consideration, if considered at all, but something new needs to be done to protect freelancers.

UPDATE — Just received the following email from PayPal:

More transactions eligible for Seller Protection

Dear Bryan Hadaway,

PayPal is always working to improve your PayPal experience, and we’re happy to announce that more transactions are now eligible for Seller Protection.

Transactions that were once ineligible for Seller Protection due to unconfirmed addresses are now eligible. Your account associated with x has been selected as an early participant in this change; PayPal will extend coverage changes to all accounts by the end of the year.

This new policy affects only those goods covered by Seller Protection. Intangibles remain ineligible for coverage. In responding to customer complaints, sellers must still follow the Seller Protection guidelines.

Thank you for being a valued customer.



I’m sure good news for some, but there still hasn’t been any improvements to help protect digital good and service merchants in the three years since I originally wrote this article.

  • Phil

    Even if you are eligible for seller protection, you still get negative feedback, and cases opened against you. Even if you win the case, it still counts against you. For example, I have around 2700 feedback. I sell about 600 things a year. I can only have 3 cases opened against me within a 3 month period, or I lose all my seller discounts.

    I currently have 2 open cases. One for a guy who bought a power adapter, and a month and a half later emailed and said it stopped working. I won the case, but because I wouldn’t refund him, he opened the case. The the other one from a guy who just opened a case without saying anything. I refunded him, but it still counted against me.

    Now I have a guy who’s saying that he never received an item that I shipped him. I have the UPS delivery confirmation, he has the UPS delivery confirmation, but he says he didn’t get it. Now I’m forced to refund him or he opens a case and I lose all my discounts.

    Ebay sucks.

  • Yeah, it’s definitely a shame. From everything I’ve read and my own personal experience; it seems that the majority of the time when something shady happens, it’s the buyer.

    Quite simply, because they can get away with murder. They can blatantly scam and the system protects them as they do it.

    Also, the 3 cases a month limit sounds incredibly unfair at your volume of sales. Is there a sliding scale, or does it not matter whether you sale 1 item a month or a 1000?

    Thanks, Bryan

  • Phil

    Yes, it’s sliding. I go from being allowed 3 to 4, depending on my recent sales. I assume high volume sellers are allowed many more, or they wouldn’t be selling for long.

  • Try see how it goes? let us know?