Purchase Protection expansion

[PayPal_Erica]

Hi there!

We've been receiving a lot of feedback regarding the decision we've made to expand the Buyer Protection time frame to 180 days in the United States beginning November 18, 2014. I'd like to help address some of these concerns.

Why are we making this change?

Through the years PayPal has learned a lot about protection. We continually study the patterns and intricacies of transactions and learn where we can make changes to improve the experience for buyers and sellers alike. Using this information, we have found that in a number of instances the 45 day time frame that has been offered up until now is not long enough for a buyer to be able to file a claim. In many situations this causes negative experiences for both buyers and sellers. By making these change we will be aligning the protections that are offered with those offered more commonly in the industry and help to reduce these negative experiences.

Isn't 45 days long enough?

In many cases yes, 45 days is plenty of time for a buyer to a claim. We offer our services to many sellers all over the world who sell many different types of products. In some cases 45 days is not sufficient and this is why we are making this change.

Consider the overseas seller, for example. In many instances shipping from a foreign country to the US can take a full 45 days. If the item gets stuck in customs along the way it can take even longer. So 45 days comes along, and having not yet received the item, the buyer feels they need to file a claim to keep themselves protected. Though the seller has done their part in communicating with the buyer and providing tracking information they still have that claim on their record and their funds are placed on hold until the item arrives. This causes a negative experience for the seller.

Let's examine the seller of pre-sale items. In these cases it can be several weeks or even months before the item is ready to be shipped. A claim in these instances could leave a seller stuck with an item they thought was already sold, which would also cause a negative seller experience.

Another example would be the seller of custom made items. Depending on the item it could be weeks for a custom order to be completed. The seller receives the payment for the order, uses those funds to purchase the necessary materials and then spends hours of their time working hard to make a beautiful, high quality item. If a cautious buyer reaches 45 days and files a claim before the item is ready, the buyer could end up with a refund.  This leaves the seller with a customized item that may not be able to be re-sold.

Protecting sellers against chargebacks

So what happens if a buyer doesn't file their claim within the 45 days currently offered? If they paid using a credit card they will go to their card issuer and file a chargeback. Most credit card issuers will allow a time frame of up to 180 days for their customers to file a chargeback and some allow even longer. When a chargeback is received it causes additional fees for the seller. It also takes the decision of the case out of PayPal's hands and the outcome is decided by the card issuer. In many cases, if the buyer wins the chargeback case, they may not required to return the item to the seller per credit card issuer guidelines. 

By extending our Buyer Protection time frames to 180 days we will help to reduce the number of claims being filed before they are necessary as well as help reduce the number of chargebacks received from credit card issuers. By allowing buyers to file claims with PayPal rather than forcing them to go to their credit card issuers we can better regulate the dispute process and help to ensure that items are returned to the seller before refunds are issued.

What if my buyer breaks the item after having and using it for (insert time frame here)?  Am I responsible for such claims?

To answer this question, I'd like to remind everyone that the purpose of our claims process is not changing, only the time frame.

PayPal Buyer Protection is available to resolve issues where the buyer did not receive the item they paid for (Item Not Received or INR), or where the buyer received an item they paid for but it is “Significantly Not as Described” (SNAD).  An item is “Significantly Not as Described” if it is materially different from what the seller described in the item listing.  An item is not Significantly Not as Described if it is materially similar to the Seller’s item listing description. Here are some examples:

• The defect in the item was correctly described by the Seller.
• The item was properly described but you didn't want it after you received it.
• The item was properly described but did not meet your expectations.
• The item has minor scratches and was listed as used condition.

PayPal Buyer Protection does not apply to situations of buyer remorse or where the buyer simply wishes to return an item.  PayPal Buyer Protection is not a “warranty” service of any kind.  SNAD claims that fit these scenarios will be rejected.

How will this impact me as a seller?

Most sellers are not expected to see much change, if any, in regards to the number of claims they receive once the Buyer Protection time frame has been extended. From our experience we've learned that most of you are really great at what you do! You know the importance of communication with your buyers and shipping quickly. We can see that you genuinely care about providing top notch customer service and take pride in delivering this level of service to your customers. We expect that you will continue providing this same level of service once the time frame has been extended.  Extending our Purchase Protection time frame will help benefit sellers because of the extra confidence buyers will have when shopping for goods and services.

How am I protected?

If there are any questions about what is covered by PayPal Purchase Protection I'd recommend reading the post my friend Andy wrote here. It has a lot of really good information, as does this post about Seller Protection that my friend Olivia wrote.

The decision to extend the Purchase Protection time frame will help benefit both buyers and sellers alike at the end of the day. I hope that I was able to help explain some of the factors behind our decision and help to address any concerns that are out there.

-Erica