UPDATED 5/16: BEWARE PAYPAL CHARGEBACKS! If you sell on eBay, read this...

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UPDATE: Go to post 70 to see final resolution and summary, case ended in my favor so I did get the money. Long wait, but fortunately it's resolved now.


I don't always comment on things like this, but this one takes the cake and I feel obligated to warn everyone who may be selling anything online to be very wary.

I've currently got a dispute going at Paypal for a card I sold in January.

I sold a card on eBay on January 2nd.
Buyer paid on January 2nd, I received funds via Paypal.
I shipped priority mail, insured, signature confirmation on January 3rd.
*NOTE: Interesting fact on this, USPS shows all that. Paypal doesn't show the signature confirmation service, more on that in a moment.
On January 5th, USPS left a notice with the buyer.
On January 9th, buyer signed for the card.
Shortly thereafter, I was given positive feedback on eBay from the buyer.

Buyer has subsequently gone to their "financial institution", who has then gone to Paypal and filed a claim against me for "Refund not received" in middle of February.

Paypal initially put the funds on hold, but earlier this week took them permanently from my account.

First, they said that it wasn't covered under buyer protection because it didn't have signature required. I've proven to them that it did, and had included that information when I first responded to the case. Today I sent them the pdf showing the signature from the USPS records.

Once that was resolved, they've now said that it still doesn't matter because the seller protection DOES NOT cover "refund not received".

I have shown Paypal that there was NO REQUEST for refund on their site (which they agree with), and that NO REQUEST for refund was made on eBay either (which they agree with).

I also spoke to eBay today, who said they're not involved any more because Paypal handles the money. They acknowledged no request for refund had been made of me on eBay, and they acknowledged I had received positive feedback on the transaction.

As it stands at this moment, Paypal is telling me that the decision is in the hands of the buyer's "financial institution", who of course I don't know who that is and neither eBay or Paypal will give me that information. I asked them both, and both said they couldn't provide it even if they had it (which eBay says they do not).

Paypal of course says they are fighting for me as their customer, but have no intention of covering me under seller protection because again that DOES NOT include "Refund not received". Why they didn't tell the other "financial institution" that no request for refund has been submitted, and no evidence of return of the item has been demonstrated, before taking the funds out of my Paypal account I have no idea.

The Paypal representative also told me the following, I'm paraphrasing but they're pretty close to quotes.
1) Federal law allows buyers to dispute charges with their financial institutions (which I certainly understand), and there's nothing Paypal can really do about that other than provide what evidence I may give them of a valid sale (which I've already done).

2) The only way I can prevent risk of chargeback is to accept cash. Yes, a Paypal representative said that out loud to me today on the phone.

3) If the financial institution sides with their customer (what do you think they're otherwise going to do? I asked my Paypal rep), my only recourse at that point is to try and recover the card back through small claims court.


I'll update this more as this unfolds, but as of right now it looks like I'm out $1,425.

Felt obligated to share, because at this point I have zero expectation of getting the card or my money back, and the implications of this for any other item I sell through eBay has me seriously considering if my internet days as a seller are permanently at an end. I had not really investigated the payment options that I can accept on eBay, but I definitely will need to look into that now if this is how Paypal is going to defend me - which is to say basically they aren't. Why wouldn't everyone just dispute charges for "Refund not received" through their credit card company if it's really this easy to get Paypal to give seller's funds back over.