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I am having a difference of opinion with some folks about Friends and Family transactions. I am saying that using F&F for business transactions is wrong because it deprives PayPal of income which is rightfully theirs, and which pays their employees who use it to feed their families.
They say that using Friends and Family for business transactions is fine as long as the parties realize that there is no PayPal protection.
What do you think?
A friends / family (or gift payment) is intended as a transfer of funds from family or friends to one another. For this reason, there is no processing fee when payment is made with bank or PayPal balance.
However as it is a “gift” payment, there is also no Buyer protection as no goods or services should have been exchanged.
If a seller does use that option when selling then they risk having their Paypal account limited as its against Paypal rules.
Thats why we get a lot of folks on here complaining their paypal accounts have been limited and they did not know why and then said they were using f/f payments for selling !!
Also whilst it stops buyers opening a Paypal dispute as they had no 'buyer protection' they can open an unauthorised transaction dispute OR do a chargeback via their card issuer if they funded their Paypal payment that way and the seller would lose as they would have no 'seller protection' as they were using the f/f option.
Your friends are wrong - that's like saying it's OK to run a stop sign if no one is there to witness it so as long as you don't get caught - why be concerned.
I agree with you GreenGear. But I think that sometimes people have difficulties seeing these issues clearly.
They will see it clearly when their Paypal accounts get limited or someone does a 'chargeback' and they realise that they lost their seller protection.