Make PayPal Work For You, Not Against You

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Here are a few things you should know about PayPal ... how to comply with seller protection to avoid chargebacks, reduced fees for volume sellers, and the benefits of the PayPal Preferred Program.

Search Google, the eBay Q&A message boards, even the Reviews & Guides, and you will find many of tales of woe from anguished sellers who have been to chargebacks for spurious reasons.

On one hand, I do sympathise.  On the other, if I see another "PayPal ripped me off" story I'm going to scream.

There must be millions of PayPal transactions being processed every day.  Only a tiny percentage of them turn out to be fraudulent.  But of course, it's only the problems that prompt people to publish their experiences.

PayPal does have many benefits (bear with me here, I'm not an out and out fan).  It allows payments to come in instantly, you can collect the money from the comfort of your computer, without trekking to the bank or post office.  And - this is the clincher - buyers really like it.  As a buyer, I find PayPal so convenient compared to writing a cheque.

As a seller I think it's imperfect, but it's the best we've got.  So, if like many, you've decided to accept PayPal as a payment method, then do it armed with all the facts.  There are a couple of important steps you should take to reduce your exposure to fraudulent transactions:

1: Consider when to use PayPal

Will you will offer PayPal on all auctions, or just those of lower value?  Personally, I don't usually offer PayPal where I expect the final auction price to go over £30.  I keep that figure in mind because that's roughly the maximum you can claim back from Royal Mail for a lost parcel sent by standard post.  Also, if I did lose that much it would hurt, but not too badly.  I'm not prepared to risk £100, and would ask for an alternative payment method.

2: Use the Seller Protection Policy

To comply with seller protection you need to:

1.  Sending items by an on-line trackable method.  There has been discussion about this in the past, but Royal Mail Recorded delivery does qualify.  But bear in mind that recorded delivery may be overkill on very cheap items, as it will elevate postage costs and put off some buyers.

2.  Send to a confirmed address.  If the address is confirmed, then the PayPal payment details will have the words: "Seller Protection Policy Eligible" on it.  But use your noodle:  don't hassle a buyer with an unconfirmed address over a 99p item.  But do insist on full compliance with Seller Protection for a £50 transaction.

In the details of every PayPal payment you will find a space for entering a tracking number. If you have one, you can fill this in routinely as part of your records, and nip any possible chargebacks in the bud.

3: Register for the PayPal Preferred Program

This means buyers will see the words "This seller prefers PayPal" on your auctions, although you will still be able to offer other payment methods, and can cut out PayPal as a payment method entirely on certain auctions if you chose.

Why do this?  Because should you ever be subject to a chargeback, PayPal will waive the chargeback processing fee (currently £7).

PayPal doesn't seem to widely advertise this fact.  I'm not sure why.  By encouraging folk to sign up to PayPal Preferred, surely PayPal will increase the number of transactions it handles, and so increase it's revenues?

To change this setting you need to go to Payment Preferences in my eBay.

4: Apply for reduced fees

If you are a volume seller, receiving more than £1500 a month into your PayPal account, then you can apply for reduced PayPal fees, and an account manager.  PayPal will not apply the discount automatically, you need to fill in a form on its Website.

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Finally, just let me add that I have heard worse stories about cheques "bouncing" up to 3 months after presentation.  Think about that for a moment!

So, onwards and upwards.  Enjoy eBay, and don't let the bastards grind you down!

If you like my Guide please take a moment to vote.

I like writing and have also written a Guide about how to stop people stealing your eBay photos, which you can see Here.

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