Paypal for friends and family. Question on chargebacks.

Exiztence · Jun 15, 2018

I Got paid through F&F for some 200$ for virtual currency few years back, money arrived on my account and I transfered it to my bank. Got dispute few days later, turns out that the buyer used stolen paypal account so obviously paypal returned the money and my PP was now -200$. They couldnt charge me as I have removed the creditcard, I found the guy that scammed me, some 15y old kid that was using stolen PP accounts to pay for goods, threaten him I will contact his parents and paypal If He Doesnt rectify the situation. He caved in and returned the money He owed me. I sent a long e-mail to his parents explaining what he has been doing and that He possibly stole from a lot of people.

FreelanceWriter · Jun 15, 2018

asrnj77
Once the funds are in my PayPal account I transfer them out into my bank account. They cannot be reversed at this point and although PayPal could request the money back they won’t get it unless I get the watch back.

Incorrect. The money hasn't actually been transferred from the buyer's bank at this point; your bank merely credits your account pending actual receipt of the money. Withdrawing the money to your bank provides no protection whatsoever. Until your bank confirms that the money has been received from the buyer's bank, PayPal will simply charge it back to your liquid funding source. No different from depositing any check that bounces after posting to your account: you need to wait until the check clears to be safe; same situation here.

asrnj77
Even if it’s charged back that’s a dispute between PayPal and the credit card company that PayPal tries to pass onto you but your transaction was only between you and PayPal.

Also incorrect. A credit card chargeback that the cardholder's bank upholds is impossible to dispute. PayPal simply charges it right back to you and also tacks on a chargeback fee that I believe is $20. If it's in the TOS and your contract with them, they can do whatever they want. Their contract specifies all of the situations that allow them to charge it back to you and to take it back from your bank account without your additional permission.

asrnj77 · Jun 15, 2018

FreelanceWriter
Incorrect. The money hasn't actually been transferred from the buyer's bank at this point; your bank merely credits your account pending actual receipt of the money. Withdrawing the money to your bank provides no protection whatsoever. Until your bank confirms that the money has been received from the buyer's bank, PayPal will simply charge it back to your liquid funding source. No different from depositing any check that bounces after posting to your account: you need to wait until the check clears to be safe; same situation here.

Also incorrect. A credit card chargeback that the cardholder's bank upholds is impossible to dispute. PayPal simply charges it right back to you and also tacks on a chargeback fee that I believe is $20. If it's in the TOS and your contract with them, they can do whatever they want. Their contract specifies all of the situations that allow them to charge it back to you and to take it back from your bank account without your additional permission.

You may be missing my point. When you get paid via PayPal initially there is a hold on the funds. After a day or two it’s available to transfer to your bank account. I’ve done this as recently as a month ago so I’m not sure how it can be disputed. Assuming you have the funds in your possession you can then decide to ship the watch. PayPal cannot take funds out of your personal bank account. If the buyer pulls some scam or chargeback PayPal may try and take the funds back from you or at least freeze them until it’s resolved. If you have no funds in the account (because it’s now in your personal account) PayPal may place your account in a negative balance. The old adage “you can’t get blood from stone” applies here. They may hold your account in a negative balance and assuming you don’t pay that will be the end of your PayPal experience but you’re not screwed by having no watch and no money. This has been discussed often on watch forums and nobody has had any credit reporting issues. It’s just the end of the PayPal account. I would rather be safe than sorry

TDBK · Jun 15, 2018

PayPal absolutely has the technical capacity to take funds out of any linked bank accounts; I don't know what their terms of service allow them to do. If you want to be sure you have funds that are irretrievable by PayPal, you need to sweep them from PayPal to a linked bank account, then move them from that bank account to another one not linked to PayPal.

I would expect that PayPal F&F funding has no protections; if the buyer reverses or cancels, PayPal will take the money (if they can) and expect you to pay them back. What do you expect for no fees? PayPal isn't going to eat any losses they can avoid. If you want protection of any kind, you need to process the payment as a commercial transaction and pay the associated fees. Now, there's no guarantees: as noted, PayPal may back the buyer in a dispute. But the only way you have a shot at a good resolution with any payments service (PayPal, credit cards, or anything else) is if you pay their fees. The only seller-safe transaction model is wire transfers or cash money (or maybe cryptocurrency if you're an expert in the challenges there). But the reason they're seller-safe is because they push all the risk onto the buyer, which is what makes "buy the seller, not the watch" so important.

GLWT, all!*

* - Good Luck With Transaction

mayankyadav · Jun 15, 2018

shishy
If you're the sender, you're only protected via goods & services.

Have read here that if a sender uses credit card to send the money, he can dispute and paypal will refund the money to sender.

Larry S · Jun 15, 2018

wsfarrell
That was me. PayPal obviously knows that many F&F payments are NOT gifts, and they let people get away with it until one of their algorithms is triggered. It could be x F&F payments in a month, or > y dollar amount, or notes on the payment page saying "please ship to abc," etc. I don't know what the algorithm is, and I don't plan to find out.

I believe this has also happened to another of our members.

vitriol · May 19, 2021

Davidt
F&F can be reversed by the sender.

Many people are adamant it cannot, but PayPal themselves told me it can.

Interesting, could you share source/more details?

chaw6125 · May 20, 2021

Reading this post. Talk about targeted advertising.

Archer · May 20, 2021

I recently linked a new bank account to my PP account - the terms of service agreement stated that I was allowing PP to place a sort of demand (I can't recall the exact wording they used) against my account of up to $200K in the case of a dispute...so even if you transfer money out of an account linked to PP, they can still come after that money.

MikiJ · May 20, 2021

PayPal just isn't what it was, damn it! I have found that when paying individuals for a watch or service that more of the people I'm doing business with, even new people, prefer my bank check and as soon as it clears they'll ship or service whatever. My bank checks are NC, so why not?

FreelanceWriter · May 22, 2021

A Anishacorn
Have read here that if a sender uses a credit card to send the money, he can dispute, and PayPal will refund the money to the sender.

This is true irrespective of whether the transaction is for Goods & Services or Friends & Family. If the payer reports the transaction to his bank [EDIT: as an unauthorized transaction] and the bank allows a chargeback, PayPal will always charge it back against the payee, regardless of the (other) circumstances of the transaction. Unless the basis of the chargeback is unauthorized charge, I don't believe PayPal will ever rule in favor of the buyer if he used F&F instead of G& S to pay for a sale. So, if you're the seller and money has already cleared into your bank account, I believe you're safe. If the money hasn't already cleared on your end, the buyer could simply drain his account balance so that there are insufficient funds for the transaction and you're SOL, because there's no backup funding source for F&F and PayPal won't help a seller who accepts F&F to avoid PP fees.

vitriol
Interesting, could you share source/more details?

See above.

Pierre1333
Have been seriously screwed over for a Rodana from China, PayPal reckons I have no claim because sender has proof of delivery. What can I do?

If the sender provides actual proof of delivery, PayPal will always rule in the sender's favor, at least as it relates to the dispute about whether or not the package was delivered. Your only recourse would be against the shipping company for misdelivery, which is very difficult to prove and probably requires significant assistance from the sender. If the dispute isn't about whether or not the package was received, but about what was or wasn't in the box, PayPal will consider evidence as well as your respective account history.

Walrus · May 22, 2021

Obviously the sellers have concerns which of course I understand but us buyers (I’ve only bought here) and have used FandF as the seller requested. I had talked to the sellers and now know them all well enough where it’s not a concern anymore but FandF is a bit stressful for the buyer. I’m never looking to screw anyone but I like to have some protection. I wasn’t aware that FandF could even charge back like that. Of course the deal I’m trying to work out now it is I who am requesting the buyer accept a wire transfer or ACH which leaves me at completely at their mercy but it’s looking like that deal isn’t going to happen which is alright I’ll probably just do a human to human sale.

Bottom line of course I understand people don’t want to get ripped off out of their valuable watches, even if it’s under 1,000 or 500 it sucks to get ripped off but their are many honest buyers who just like to know we have some type of protection. I am kinda surprised we have sold 70 or so items on eBay (not many of those were watches) worst we got was people complaining about a dent or something asking for 20 or 30 bucks off. You know I just jinxed myself saying that, oh well.

Braindrain · May 23, 2021

FreelanceWriter
Incorrect. The money hasn't actually been transferred from the buyer's bank at this point; your bank merely credits your account pending actual receipt of the money. Withdrawing the money to your bank provides no protection whatsoever. Until your bank confirms that the money has been received from the buyer's bank, PayPal will simply charge it back to your liquid funding source. No different from depositing any check that bounces after posting to your account: you need to wait until the check clears to be safe; same situation here.

I'm about to receive a F&F payment. How would you know if your bank confirms money has been received?

kcgunner · May 23, 2021

Paypal is always risky. But so is everything. You name the funding source and there's a way to screw someone using it. Just do your due diligence, buy the person you're using paypal for, not just the product, don't take any unnecessary risks and hope for the best. I've used paypal for probably close to 1000 transactions for almost 20 years and I have yet to get screwed on there. But that's not say that the next won't be my first.

vitriol · May 23, 2021

FreelanceWriter
See above.

I am familiar with the chargeback through CC/bank. Davidt mentioned about a direct reversal through Paypal, which is new to me, and would like to discuss it more.

FreelanceWriter · May 26, 2021

Braindrain
I'm about to receive a F&F payment. How would you know if your bank confirms money has been received?

Personally, I just call my bank to confirm. How long it takes for a transaction to fail for insufficient funds probably varies according to where the respective banks are, just as with bounced checks.

kcgunner
Paypal is always risky. But so is everything. You name the funding source and there's a way to screw someone using it. Just do your due diligence, buy the person you're using paypal for, not just the product, don't take any unnecessary risks and hope for the best. I've used paypal for probably close to 1000 transactions for almost 20 years and I have yet to get screwed on there. But that's not say that the next won't be my first.

I believe that receiving payment vie F& F is safe as long as your buyer agrees to wait until your bank confirms the transaction before you ship the package. I mailed a personal check out of state to pay for my Speedy and I agreed to wait patiently for the two weeks that it took my out-of-state check to clear on the seller's end before he shipped it.

vitriol
I am familiar with the chargeback through CC/bank. Davidt mentioned about a direct reversal through Paypal, which is new to me, and would like to discuss it more.

That's new to me too; so I suspect what they were probably talking about was a transaction reported as an unauthorized use of the funding source or the PayPal account itself. Otherwise, I don't think you can ever reverse a F&F payment for any reason. Sometimes, when it's a larger-than-usual payment for my work via PayPal (Goods & Services) from a new client and I don't (yet) trust them to use a credit card, I require them to show me the PayPal confirmation email documenting that the transaction was funded by their PayPal balance or from a bank account; and if it's from a bank account, I match the last digits to the digits displayed on the confirmation email to them fro PayPal and I also require them to show me the balance before and after the transaction. That's the only way that I can be sure that the money actually came out of their accounts and that they didn't fund the transaction with a credit card, whether one that was stolen, or "borrowed" from their parents without permission, or borrowed with permission from an accomplice who is anonymous to me who is willing to report the transaction as unauthorized and just cancel that card as the only price of the scam. If a new client really spooks me and/or takes deliberate steps to remain anonymous to me, (or if I ever had a problem with a payment from that person before), then, it's Western Union or nothing; I don't think there's any way to get burned by WU once you have cash in hand.