I read the policy today to determine whether I could sell a barrel using PayPal. I'm a tax attorney and I get paid to interpret complicated statutes, regulations, court cases, etc. Anyway...the policy appears to be intentionally written to be ambiguous and confusing. PayPal would have no more legal liability than would my credit card company or UPS for shipping it. Obviously it is just a political statement. Personally, I find it repugnant that PayPal has a problem with a perfectly legal transaction just because it doesn't square with their political beliefs. GPal (from google) doesn't have a problem with it, so I'm going to use them and I encourage others to do the same.
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