A change is coming to PayPal that is designed to protect both buyers and sellers should a dispute over digital goods arise.
On its website, PayPal gives the examples of services, digital goods, travel and event tickets as intangible items. As of July 1, if a buyer claims they did not receive the intangible item they paid for, or they claim the item they received was not as it was described, PayPal will review the dispute.
The move is in response to an increase in the sale of intangible goods. Earlier this month, PayPal told PYMNTS.com that the dollar value of digital goods purchased by the company is growing by about 20 percent a year.
Should a conflict arise, sellers should be prepared to provide PayPal with “compelling evidence” that they provided the intangible item, and that it was as they described it to be.
In this case, physical proof that a non-physical item has been delivered as it was described means proof of download including the date of fulfillment, and as well as the time the product was downloaded. PayPal recommends having proof of download, date of fulfillment and the time of download ready at the time of the transaction.
What This Means for Past eBay Users
PayPal and eBay are parting ways, though eBay has never allowed the sale of digital goods on its website, except through its classified ads.
Under the new policy, PayPal will treat payment authorizations made to eBay as canceled, and PayPal will not complete the payment. If PayPal determines that it would have ruled in favor of the individual who filed the claim, the company will re-file the claim.
PayPal’s Seller Protection Program, however, will not cover all claims filed under eBay.
PayPal’s policy change is good news particularly for businesses that depend on old-fashioned honesty in their industry, such as freelance writers whose products are the equivalent of digital documents.
In an email to Small Business Trends, a PayPal spokesperson says:
“Sellers such as small businesses will benefit because of the extra confidence buyers will have when shopping for goods and services. Also, it is important to note that because of PayPal’s sophisticated fraud prevention technology and expertise, we are able to catch the vast majority of fraud before it ever reaches our sellers. This is a service we provide to our sellers every day, and is a significant benefit of accepting PayPal.”
The company goes on to say it will consider all claims on their merits, and that if sellers can offer solid evidence that they provided the goods or services as described, PayPal may reject the buyer’s claim.