Payment methods: Paypal, money order, checks, etc...

Hey guys, I just wanted to start a discussion about forms of payment, from both the seller and buyer's perspective.

As we many of us know, paypal doesn't offer much of a protection when it comes to live animal purchases, so many people prefer to use other forms of payment. There are pros and cons to using Paypal, as well as other forms of payment. I have yet to find a form of payment that protects the buyer and seller equally. *I* believe that if Paypal began covering live animal purchases, there would be much more security in our industry. However, we have to work with what we have available to us.



Paypal:

Important to note: The paypal buyer protection doesn't include much protection for the purchase of live animals. I am still confused on how much this protection covers, but I've heard that it is extremely limited.

Link to Paypal Buyer Protection info on live animals

There are different methods to send money via Paypal. One way is straight forward, and is just sending money in the form of a purchase for goods or services. This will charge the seller a small percentage based on their Paypal account, but slightly protects the buyer more (although I'm not sure how much more). Usually it will protect the buyer if the seller never sends the item. However, if the seller sends proof of shipping anything, even an empty box's tracking number, this will usually suffice for Paypal's standards.

FYI: it is against paypal policy for a buyer to charge the excess paypal service fee. It should be already included in the purchase price. See link:

Paypal policy on forwarding service fees to customer

Other ways to pay save the seller money on the service fees related to the purchase. One of those is sending money as a gift. Another way is to send money as a payment owed. Both of which I feel offer significantly more protection on the seller's end than for the buyer. These forms offer zero security under Paypal's Buyer Protection policy. See links:

Info on using different payment methods on Paypal

Gift and Paypal Buyer Protection

However, in my opinion- from a buyer's point of view- paypal is still the safest way to pay because of the fall back on your debit card. If things go bad, you can always do a chargeback through your bank. Its important to chose your debit card instead of a bank transaction for purchases in order to be able to use this function in the future if its needed.

Consumer Credit Counseling Service: Chargeback Rights

When selecting a bank transfer for the funds used in the purchase in place of using funds from a debit or credit card, there is limited protection and much of the security in this transaction falls on your personal bank's policies. I would contact your financial institution to discuss the policy on this subject.


However, these can be dangerous for the seller when used improperly:

Chargeback Fraud

Forms of payment other than Paypal may be safe from the seller perspective, but offer limited, or no protection from the buyer's point of view. Below these are described.



Checks:

I just spoke with my bank about using personal or cashier checks to make purchases. They put it very bluntly that there is no protection because you have already authorized the use of that money. Unless it was an unauthorized transaction (i.e. a forged check), its pretty much cash after the check is deposited into the seller's account. Before then you can always cancel the check, but most sellers require a 7 day waiting period for the check to clear. However, thats not always a good enough time frame. See link below on the BOI which discusses checks bouncing on the seller's end.

Bounced check


Moneygrams/Wire trasnfers:

I've heard of some people requesting payment in the form of wire transfers/moneygrams. In my opinion, I don't think that is very safe from the buyers perspective at all. You send them money, and everything is done. Not too safe for the buyer.

Money Order:

When using money orders, the buyer also has very limited protection, and are very similar to the use of checks. One important detail to think about is that if you decide on using a money order, use a USPS government money order. Why? Because the USPS is a govt. backed money order, which has a slightly better protection. Because it is govt. based, what I've heard is that being defrauded using one is investigated better than if using another form of money order. I've heard--no sources-- that the USPS takes fraud very seriously with their money orders, and is always forwarded to the authorities for investigation. Furthermore, from a seller perspective, USPS money orders are some of the more difficult to fake money orders, so they are better to accept as a form of payment when accepting money orders.

USPS Money Order and mail fraud

Cash:

This one is pretty obvious. You give them cash, and you're done.

Escrow.com

Another form of payment, which I have never used, is to use an online escrow service. The fees are actually similar to those used for Paypal, approximately 3.25%. This is something rather new to me, therefore I am unsure of its use. However, its similar to using escrow for the purchase of a home. The money is held by the third party company until both the buyer and the seller decide that they are happy with the purchase. In theory, it sounds like the best protection for the buyer and the seller, but I'm unaware of anyone else using services like these. Since I don't want to be the guinea pig, I'll have to sit back and see how this is implemented in the industry.

I'm hard pressed to think of any other forms of payment that are often used at the moment. I am aware of other Paypal-esque companies, such as Squareup and Google Checkout, but I would assume that their policies and protection are similar to that of Paypal. If anyone has feedback, information, or a comment, post it!

A lot of people have been dropping Paypal as an accepted form of payment on animals. It really does not protect the seller in situations where a buyer makes a charge back out of pure spite or buyers remorse.

Postal Money Orders I think are the safest route for all involved, as it is a felony to scam someone with one. And buyers remorse/spite cannot be so easy to fall back on.

I have a Google Merchant account...but have yet to utilize it....I would assume it is similar to Paypal in its issues of live animal resolutions.

True. I can see why people would want to drop paypal as a payment method. However, as seller-- especially when dealing with someone I don't know, I see paypal as the only way I would want to purchase online. There are also issues with USPS money orders, because even though its fraud, some people will still do it and there isn't a safety net for that. I don't think I would want to send money via money order, personally.

I am interested in that new Escrow.com service I recently heard about... sounds like it could be interesting. Maybe more hoops to jump through, but the security seems like it might be there.

I would like to know what issues with USPS money orders there would be? What is not a safety net about being able to take actual legal action on someone if they scam you? The only way there would not be a safety net is if the person does not feel they were frauded enough to pursue legal action.

I've seen way to many horror stories with Paypal at this point to trust it as a buyer or a seller lol. Any story about Postal Money Orders I have seen, have simply been lack of follow through in reporting it from the person with the complaint.

If the person does defraud you with a USPS money order, does the USPS return your money, or do you have to sue them? I guess what I mean is that if I was scammed and used Paypal via debit card, I could contact my bank and start a chargeback process. Because I maintain a significant amount of records, it wouldn't be too hard to prove that I didn't get what was promised I feel. At least with a chargeback, you could be refunded. I think this is especially important with large transactions.

I know many people use their credit card through Paypal vs. their bank. I've seen quite a few cases where people who paid with a CC and got ripped off can more easily do a charge back on their CC rather than trying to rely on Paypal for protection. I'm sure not everyone gets refunded, but I know I've seen quite a few times.

Just a though. Good discussion.

Yeah, I agree. I never pay through a bank transfer on Paypal just in case I need to do a chargeback. There are just more federal protections under credit cards than bank transfers IMO.

Most CC companies now don't really mess around with fraud. I know the few time's we've had issue's with small charges as soon as we say we didn't charge it, or something wasn't correct with the charge they are all over it.

I think the issue with Paypal is bigger from the seller's perspective. The issue seems to be that Paypal is pretty willing to side with the buyer in the event of a chargeback. So, if you are selling an animal, and you do everything you should, there is still a possibility that the buyer can tell Paypal/their CC company that the item is not as described, and wind up with the animal and the money. At least that is my understanding of what has happened. Even if Paypal doesn't give the protection because it's a live animal, the person could still do a chargeback on their CC, and Paypal would still ultimately come after the seller for the money.

I also wanted to add a comment about Postal Money Orders. I require any customer paying by Postal Money Order (the only type of money order I accept) to send it Certified Mail (or FedEx or UPS with a tracking number). I feel that this is important for two reasons. First of all, it gives me some reassurance that the customer acutally sent the money, so I'm not holding the animal for a purchase that's never going to happen. Second, I don't need to worry as much about the money order getting lost in the mail. I'd imagine it could turn into quite a nightmare if the buyer said they sent it regular mail with no proof, and I never recieved it. I think this is really important, especially since the Post Office can be pretty unrelaible with shipping times. I had a Priority Mail package take 5 weeks to get from NY to FL, and after that I don't trust them much.