Does Paypal guarantee that the merchant ships their product?

[honda14]

Just out of curiosity..

When buying an item over a website through Paypal, do they guarantee that the merchant actually send their product, i.e. they only get my money when they ship the product?

[kernowlass]

@honda14

No seller would send an item before they are paid so no, paypal does not do escrow.

However you need to read up on paypal buyer protection so you know how and when you are covered.

[honda14]

Well I thought the whole idea of Paypal was to hold the money and then ensure the transaction to both the seller and buyer so for example the seller would ship the item if they knew Paypal had the money, i.e. so they were guaranteed to get them when they ship the product. Otherwise, what is the point of Paypal, i.e. why not just send the money directly to the merchant?

[kernowlass · Accepted solution]

@honda14

Paypal is a payment processor, they pass your money over to the seller so that the seller will send your item.

No seller is going to send an item before being paid.

Paypal also give you 'some' buyer and 'some' seller protection, the rest is up to you.

You are correct in that you can send the funds directly to the merchant 'another way' but you would have no buyer protection UNLESS you funded that payment via a credit card.

Also a LOT of sellers that are not registered businesses can't process credit card payments but can accept Paypal so that is why a lot use Paypal.