Why I’ve Stopped Using PayPal As Seller (and Why I Dig TransferWise)

Photo (CC BY 2.0): Francois

I’ve been using Paypal for over 10 years, both as a seller and buyer. Like millions of other users, I enjoyed its no-frills approach to money transaction. The fee system wasn’t ideal, but the convenience made up for it.

I often heard horror stories about Paypal (did you know there are actually Paypal-hating websites?), yet I never had particulars reasons to complain – until now.

Last month, I sold an analog synth to someone living in another European country. The buyer paid via Paypal Goods And Services.
The item was practically brand new and was in perfect condition (I made sure of it before shipping). It was packed in its original packaging and sent on its way. The transaction was smooth, the buyer was eager to get his new instrument and everything seemed fine. I shipped the unit via UPS and covered the shipping costs.

The Buyer Is Always Right

The buyer received the unit a few days later. Strangely enough, I didn’t hear from him, but I thought he might have been busy and figured no news was good news anyway.
Some days later, as I was traveling, I received an email from Paypal saying that the buyer had reported the item as “not as described”. In the message, the buyer complained about the item having some “signs of wear and tear” and “not making any sound”. Needless to say, I was stunned. Those complaints didn’t make any sense – I was confident the item arrived in good condition. It was a desktop item after all, without keys and built as a rock, basically indestructible.

Safer shopping? Uhm….

I was also surprised that the buyer didn’t contact me first, before officially complaining to Paypal. Anyway, I had his phone number so I contacted him asking to tell me more about the issues (possibly with a video) since I was willing to help.

His version of the story had changed already. No mention of signs of wear and tear, and the unit was actually making sounds, but apparently, there was “something wrong with it”.

He sent me a bunch of videos, showing a fast MIDI sequence sent from Ableton to the synth. According to the buyer, the synth was not reproducing this sequence as expected. Also, he mentioned the fact that the oscillator mixer was still outputting sound when the knobs were in 0 (center) position.

Punch when you have to punch

I did my best to help. I asked him to reproduce the issues with a much simpler process, so we could make sure of what was happening. I shared some valuable bits of advice about the (analog) nature of that particular instrument – signal bleed, etc.

None of this really helped. The buyer didn’t want to hear anymore. He was set in his mind. He wanted his money back, for whatever reason. Maybe he just didn’t like the synth, or had no idea how to use it. All I know is that he was trying to find any possible excuse. And he knew he could count on PayPal’s Buyer Protection.

If I were you I wouldn’t sell this with Paypal

I tried showing PayPal that this was a clear case of buyer right’s abuse. I sent them the same videos the buyer sent me, showing that the unit works as expected and doesn’t show any sign of damage or wear. I even described the technical details in the easiest possible way, to explain that this might be a simple case of operator error.

Unfortunately, PayPal decided in favour of the buyer, without providing any reasons. To be honest, their emails seemed to be automated responses – no sign of empathy whatsoever and cold as an Arctic night.

I wasn’t surprised though. Many people warned me that this is the way it goes. Don’t get me wrong – I can see how, theoretically, the Buyer Protection policy might be a good thing.
The problem is PayPal claims are generally closed in favour of the buyer, no matter what. He might tell the truth or just find an excuse, it doesn’t matter. The buyer’s always right for PayPal.

Lesson Learned

Today I finally got the synth back and you know what, it works great and sounds as it did before I shipped it. Thank God the buyer didn’t break it (or steal parts – apparently that’s quite common)!

He got all his money back while I’ve lost the money I spent on shipping, plus PayPal’s commission. But that’s not all.
I’ve lost confidence in PayPal and I’ve lost countless hours of work,  sleep and energy because of this awful situation.

I’m sure some other honest seller is going through the same (maybe worse) issues as you read this. As for me, I’ve decided to stop using PayPal to sell second-hand instruments. Their buyer protection policy is flawed and if you’re a seller, it’s potentially very dangerous.

If PayPal is your only option, try using their Friends and Family payments as much as possible (I know it’s not perfect, but I had plenty of positive transactions in the second-hand Eurorack market).

Alternatives to Paypal for International Money Transfers

I’m researching alternative payment methods, especially for international money transfers – possibly less expensive than Paypal and regular bank wire transfers. I’m happy to report I just had an excellent experience with TransferWise, a company created by an ex-Skype employee and a financial consultant.
It’s not the same thing as PayPal (i.e. it doesn’t work if seller and buyer are using the same currency), but if you need to move money internationally – i.e. you’re from the US and you’re selling an item to a European customer or vice-versa, you’re freelancing for international clients, etc. – you should definitely keep reading.

Forbes wrote about TransferWise a few months ago: “It’s extremely easy to use, perfectly transparent about fees and the timing of transfers and significantly cheaper than other options like PayPal, bank wires or exchange kiosks.”

I couldn’t agree more. I used TransferWise to pay for a second-hand sampler I bought from a British seller (hence converting € to £). It was super simple and the seller didn’t even have to create an account. TransferWise transferred the money from my bank to his (all I needed was his name and his bank account number).

It’s not as immediate as Paypal, but who cares? I would rather wait a couple of extra days and save some money. Currency conversion (be it with PayPal or regular banks) feels like extortion, as we all know, but using TransferWise to pay for that sampler, I basically saved 5% on the purchase (compared to the sum I would have paid using Paypal). And it felt good…

He might tell the truth or just find an excuse, it doesn’t matter. The buyer’s always right for PayPal.

Any Tips?

I know this is different from the other ANR posts, but I thought it might be worth sharing this story. Do you have any Paypal horror stories? Do you have any tips on alternative payment methods? Feel free to leave a comment below.
Last but not least, if you feel like giving TransferWise a try, follow this link and get a free international transfer of up to £500.