this is one of the main reasons why i want to get away from having to use paypal. i’ve heard too many stories like this over the past year or so to ignore it any longer… 8/

Battle over bag: Seller loses out in online sale
The Atlanta Journal-Constitution
March 08, 2009

It seemed like a routine transaction on eBay: Selling a designer handbag and using the popular online payment service PayPal to accept money from the buyer.

But for three months Lisa Wright of Atlanta has been battling PayPal after the buyer received the $1,250 handbag, disputed the charge with her credit card company, then didn’t return the merchandise.

Because of the dispute, PayPal removed the proceeds of the sale from Wright’s online account — leaving her with nothing, records show.

“I’m just totally suckered. I can’t believe this,” said Wright, who is a lawyer specializing in consumer issues. “You can’t keep my money and my bag.”

But under PayPal and credit card rules, buyers can sometimes do just that, said Michael Oldenburg, a spokesman for San Jose-based PayPal.

“It doesn’t happen often, but anytime you sell online there is a small degree of risk involved. This is one of those situations,” Oldenburg said.

Buyers may not have to return merchandise when charges are reversed in their favor, he said, depending on the rules of their credit card issuer. And PayPal must abide by the card issuer’s decision. “Not only does the buyer get their money back, they also get to keep the merchandise,” he said.

After Spotlight’s inquiry, PayPal said it will refund $1,285 to Wright for the bag, shipping and sales fees.

The case is a cautionary tale, especially for sellers, about the risks of online auctions and the importance of reading PayPal’s detailed user agreement.

PayPal, which has more than 70 million accounts worldwide, won’t release data on how often buyers seek charge-backs from their credit card companies or how often sellers lose in such disputes. Because a key PayPal service is that it protects the details of a buyer’s credit card, sellers must rely on PayPal to make their case.

For Wright, the troubles began last fall when she went to Europe for her birthday. In Nice, France, she bought several items at a Louis Vuitton store Nov. 21, a receipt shows.

“I bought more handbags than I needed,” she said. Back in Atlanta, Wright decided to sell a Louis Vuitton Watercolor Speedy 35 on eBay. On Dec. 1, a California woman was the high bidder, using a credit card to pay Wright $1,250 plus $25 shipping. PayPal processed the credit card for Wright.

Wright shipped the bag. A few days later, Wright sent a message through eBay to the buyer, thanking her for her purchase and asking that she leave feedback on the Web site about the transaction.

The buyer said she wanted to return the bag.

“The handbag looks very beautiful as you described,” the buyer wrote Dec. 8. “I really like this bag except one thing I don’t like about this handbag because of the size. It was too big for me to carry when I am only 5’ 05” height. May I ask you if I can return this handbag for money back?”

The buyer persisted in a Dec. 9 e-mail. “I will also send you $100 for your trouble,” she wrote.

Wright said no, reminding the buyer that the item had been listed as a final sale. “I thought life was done as far as that bag went,” Wright said in an interview.

But on Dec. 31, PayPal notified Wright that the buyer had asked her credit card company to reverse the charges. “The buyer claims that the item was damaged on receipt or is significantly not as described,” according to PayPal’s e-mail.

PayPal asked Wright to provide evidence against the buyer’s claim.

Wright said she was shocked by the claims, given that the buyer’s e-mail to her acknowledged the bag was “as you described” and she made no mention of damage.

Wright sent copies of the buyer’s correspondence to PayPal. She said she felt confident the dispute would be resolved in her favor.

But on Jan. 6, PayPal withdrew the disputed $1,275 from Wright’s PayPal account. Then in an apparent mistake, PayPal took an additional $1,200 out of Wright’s personal checking account, which was linked to her now-empty PayPal account.

PayPal’s user agreement allows the firm to withdraw funds from related bank accounts if a PayPal account has a negative balance.

Wright said she closed the checking account. PayPal eventually refunded the extra $1,200.

In February, Wright said PayPal told her the undisclosed credit card company had decided in favor of the buyer “and they were checking to see if she’s going to send the bag back.”

The news outraged Wright and she sent another letter, with supporting documentation, to eBay, which owns PayPal. “This situation is totally ridiculous,” she wrote on Feb. 2. “There are absolutely no protections for sellers on Ebay.”

As of late February, Wright still had no bag and no money.

Contacted by Spotlight, the buyer of the handbag — Mary Trinh of Westminster, Calif. — said she wanted to send the bag back to Wright but was instructed by her credit card company and PayPal not to do so until their investigation was complete. Around Feb. 17, following their instructions, she said she mailed the bag to a PayPal returns address in Dallas.

Trinh said she never carried the bag. “I didn’t like it.”

Trinh, who is Vietnamese, said the dispute process has been stressful because it’s difficult for her to communicate, especially in writing. “I’m not good about English,” she said.

She said the main reason she wanted to return the bag was its size. But she said she later wondered whether it was authentic, despite Wright’s receipt from the Louis Vuitton store. And she said the bag’s handle appeared worn.

“I’ll never buy anymore on eBay,” Trinh said.

Wright also said she’s done with PayPal and eBay. “If there was no [AJC] story, I’d still be fighting.”

PayPal officials said they’ve tried to make the situation right with both women. Most PayPal users don’t have such problems, said Oldenburg.

So what happened to the handbag? More than likely it’s been destroyed, Oldenburg said. It appears Trinh’s credit card company gave her an address for a firm PayPal once used to destroy potentially counterfeit merchandise.

3 thoughts on “note”

  1. maybe not so foolish: when i first signed up with paypal, they were not a part of ebay, and you never heard stories like this about them. since then, they have been purchased by ebay, and stories like this have gotten more prevalent. and there may be a miniscule number of stories like this floating around, but that’s likely because the rest of them haven’t had the balls to complain, which i totally understand.

    in spite of my verging-on-paranoia carefullness with passwords and such, my paypal account was hacked last year, and i was forced to wait 2 months for a “resolution” from ebay regarding whether or not i had actually changed my default language to chinese, and then bought several hundred subscriptions to a chinese porn magazine, while who knows what was done with the $200 that paypal withdrew from my bank account, which i didn’t actually have (which, of course, meant that i owed overdraft charges from the bank as well). that, if nothing else, was enough to convince me that there had to be a better alternative.

    i’m not saying get rid of paypal all together, what i’m saying is definitely give people some alternative, because if i don’t, then i would be potentially losing sales because of the fact that the only way to pay with a credit card is through paypal.

  2. Sorry, sal, but that’s kind of a foolish attitude. If you scoured the internet and came up with EVERY story (true or not) like this it still would be a minuscule percentage of the transactions run through PayPal.

    I’ve been using them (both to buy and sell) for years without a hiccup.

    Judging strictly by this story, the person selling the bag could have had her own merchant account and still gotten the shaft from the credit card company.

  3. I see I’m not the only one who’s turned off on eBay; they sound like they’re as much at fault in this story.

    I “won” a pair of sunglasses in an eBay auction a couple of years back, and found them to be faulty; one hinge was broken, and one lens was scuffed. These were not forgivable defects, even though the sunglasses were vintage. I brought this to the seller’s attention immediately, and he managed to put me off long enough that I missed the deadline for dispute resolution with eBay.

    So live and learn; I’m not dealing with eBay anymore.

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