Posted by Chuck on May 5, 2015

Published on May 5th, 2015 | by Chuck


Paypal Adds Buyer Protection for Digital Goods

Paypal announced recently that they’re extending Paypal Buyer Protection to include the purchase of digital goods, in a nod to the increasing role intangible goods play in our life.

As one of the leading ways to buy and sell digital goods and services around the world, we want to provide the same protection and peace of mind for digital goods that buyers have come to expect from our brand.

Currently, Paypal only offers protection on physical goods and not on digital goods, such as music downloads. Similarly, with regards to Seller Protection, Paypal does not officially cover digital goods. Starting in July, the expanded protection being offered by Paypal will cover buyers in the event something is wrong with digital goods which were purchased, whereas Seller Protection will remain the same.

Update: We wrote more about this in the post, Paypal Buyer & Seller Protection on Gift Cards.

The added protection could really come to play with regards to buying gift cards. Gift cards should be covered starting July, like any other digital goods. Some second-hand gift card resellers accept Paypal as payment and an added layer of protection from Paypal is always nice when dealing with a second-hand gift card.

As mentioned, Paypal has not mentioned any change to Seller Protection, which could impact the sale of gift cards on eBay. Technically, Paypal does not offer protection on digital goods, which could possibly include gift cards sold on eBay.

When I inquired about this from Paypal a while back, they indicated that even the sale of a physical gift card would not be included in Paypal Seller Protection, even though it’s completely within the rules of eBay to sell physical gift cards on eBay. They referred me to speak to eBay to see if eBay would have my back on such a sale. In practice, however, when I had a problem with an unscrupulous buyer, Paypal did come through on their own, without eBay intervention. This could potentially change with Paypal soon splitting off from eBay.

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