For many new sellers, using PayPal seems like a very daunting task.  The objective of this guide is to help new sellers and even some experienced sellers learn how to use PayPal and to minimize their risks.  We will be updating this guide frequently with new additions and also answer some questions that you might have.  Please note, the opinions expressed in this guide are our opinions only and do not reflect ebay or PayPal.  They come from our own dealings with PayPal from the very start.

First of all, what is PayPal? 

PayPal is a payment mechanism designed to make buying goods online safer and easier.  It is advertised as a safe way for consumers to make payments without sharing their information to various companies.  Before, if you wanted to purchase items from 5 different companies, you would have to share your credit card information with 5 different companies.  PayPal's goal was to make it so that the consumer would only have to enter the information once and it would be held privately with PayPal.

What does PayPal mean to a merchant?

Whether big or small, PayPal can prove to be an invaluable asset to a merchant.  Especially on eBay where it is their preferred method of payment, PayPal allows a new company to start receiving credit card payments relatively easy without a lot of paperwork.  PayPal charges a "transaction fee" for every payment received by a merchant.  Only merchant PayPal accounts are allowed to receive credit card payments.  Personal PayPal accounts are only allowed to receive funds used through the "send money: function and there is no transaction fee charged.

What are PayPal fees? 

PayPal transaction fees are priced fairly competitively with other credit card payment companies.  To see what fees you place, visit the PayPal transaction fee page.  Please note, if you do receive more than $3,000 USD of paypal payments a month, you can qualify for lower transaction fees.  You will need to log into your PayPal account to request the lower charge.  This information can be found on PayPal's site, we cannot link to any sites outside of eBay in this guide.

How do I get paid by PayPal?

Congradulations!  You have sold your first item on eBay!  To get paid, all you need to do is log into your PayPal account and withdraw the money into your registered bank account, its that simple!

Using PayPal is very simple, its designed to be pretty hands off and is not a hassle.  That explains its rapid growth over the years (and why eBay bought PayPal)

Now, lets get into the gritty stuff.

What can go wrong with PayPal?

The most common compliant and problem with PayPal is what they call a chargeback or a dispute.  This most commonly occurs when a person you have sold an item to files a complaint with PayPal.  The two most common disputes are "Non-Receipt" and "The item I received is significantly different than the item the seller described".  I will describe each dispute and how it should be handled:

NON RECEIPT

This happens when the customer states that the item they ordered did not arrive.  How do you fight this?  You MUST have a tracking number that shows delivery to the customer's address.  A USPS delivery confirmation is NOT ENOUGH.  Let me state this again, you MUST HAVE AN ONLINE TRACKABLE TRACKING NUMBER TO VERIFY DELIVERY.  Almost all major online retailers ship using FedEx or UPS because of this.  To fight this, all you need to do is go into your PayPal account and provide the tracking number.  If you do NOT have a tracking number confirming delivery, you are in trouble.

SIGNIFICANTLY DIFFERENT

The customer is saying that the brand new Widget you sold him was actually used.  To protect yourself, please make sure you are accurately describing the item you are selling.  If you are saying its brand new in box but it was actually used once, STATE it.  If you think you are not misrepresenting the item, make sure to provide pictures and your description in the auction.  However, be warned.  The final decision is going to be made by the person who reviews your dispute.  This person gets paid a very low wage and has a task of going through hundreds of disputes a week.  This can go either way, so make sure you provide as much information as possible!

The other dispute you will see through PayPal is unauthorized transactions.  That means the customer is saying that someone stole their account to make a purchase with you.  In this situation, provide all the details that PayPal requests and most importantly, make sure you ONLY ship to the confirmed address on the PayPal account.  If you did, then most* of the time, PayPal will cover the loss.(* note, PayPal at their own discretion can just simply make you take the loss.  If they do, you have pretty much no recourse)