5 Things Every New eBay Seller Should Know About Paypal

Using and understanding PayPal is an integral part of being an eBay seller. After all, PayPal is one of the top ways to pay for an item on eBay. It is interesting to note that eBay and PayPal were actually in the same group of companies for almost 15 years. The longtime relationship with PayPal has enabled electronic payments to soar on eBay – before the merger, online purchases contributed to only less than half of all payments. Nowadays, around 80% of all transactions involve PayPal. With that said, here’s 5 important things to know about the payment monolith that is PayPal.

Selling fees on PayPal

Using PayPal is not free. In addition to those charged by eBay, PayPal fees must be paid for every item sold using the service. The amount charged includes both a percentage of the transaction amount in addition to a flat charge. The precise fee depends on the country where both the buyer and sell has a PayPal account. For sales within the US for example, the fee is 2.9% plus $0.30 USD.

Seller Protection Policy

PayPal offers sellers a protection policy that guarantees secure payments and prevents fraud. The policy also ensures protection against specific disputes raised by buyers as long as the transaction meets certain requirements. If the eligibility criteria are met, PayPal promises sellers that they will not be charged whatever the outcome of the dispute.

Sellers are protected against disputes from buyers in these two instances:

Items not received – as long as sellers can provide online tracking information
Unauthorized transactions – Proof of Delivery is required

In both scenarios, the payment must be marked ‘eligible’ or ‘partly eligible’ on the Transaction Details Page on PayPal.

Important – The Seller Protection Policy does not apply to ‘Significantly Not as Described’ disputes.

Purchase Protection Policy

It is useful for sellers to be aware not just of the specific Seller Protection Policy but also how PayPal safeguards buyers too. Understanding ‘the other side’ can be handy when dealing with disputes.

Most items paid for using PayPal are covered by the Purchase Protection Policy. If a buyer believes that the received item is significantly not as described or wasn’t delivered at all, they can dispute the transaction via PayPal up to 180 days after their original purchase.

Sellers should note that this claim period is significantly longer than eBay’s own Money Back Guarantee.

Common PayPal scams

Some of the top scams against eBay sellers feature the PayPal payment service. On the other hand, one of the most common attempts by fraudsters is also thwarted by PayPal’s Purchase Protection Policy.

“The Fake PayPal Notification” – Familiar to most long-term eBay sellers, this scam is simple yet tricks many new sellers every year. Following a sale, a realistic-looking PayPal payment notification email is sent to the seller by the fraudster. Trusting the email, the scammed seller sends out the item without actually receiving payment. To avoid this scam, payment confirmation should always be checked within PayPal.

“Shipping to a different address” – A buyer asking for a purchased item to be sent to a different address is both common and seemingly reasonable. Unfortunately for sellers, it could be a scam. A fraudster may have stolen someone else’s PayPal account or may intend to claim that the item was not delivered. In any case, shipping to an address different to the one on file for a buyer is against PayPal’s Seller Protection Policy. Using PayPal as an excuse offers an easy way out for sellers to refuse a shipping address change and hopefully avoid a scam.

All about eChecks

Not a common payment method but one for eBay sellers to be aware of is PayPal’s eCheck (or eCheque in some countries). An eCheck is basically a bank transfer payment and is generally used in these two instances:

  • To pay for an item. Buyers who do not have a debit or credit card have the option of using eChecks to pay directly from their bank account. It can take up to 6 business days for the amount to be received by the seller.
  • For a refund. When a seller needs to issue a refund but does not have the required amount available in their PayPal balance, an eCheck (a transfer) for the full amount will be issued from the seller’s bank.

Receiving money through an eCheck can take up to 6 business days. eChecks are different to PayPal’s Instant Bank Transfers. For this type of payment, a debit or credit card is needed as a backup. With this longer delay, sellers should be sure to wait for the funds to clear into their PayPal account before shipping the item.