PayPal dispute ends in destruction of violin
CNET ran an interesting article yesterday on how a PayPal dispute ended in the destruction of a violin. In summary, the allegation is that the purchaser disputed the authenticity of his $2,500 puchase, PayPal agreed, and they instructed the purchaser to destroy the violin it in order to obtain a refund.
People are asking a lot of questions about this one, and while I haven’t heard directly from the seller, her letter is posted on Regretse. (The buyer’s identity has not been disclosed.) The dispute appears to focus on the violin label. I’m certainly not qualified to discuss violin labels and associated traditions, but these folks are and have something interesting to say.
I was a bit surprised to hear that PayPal had the instrument destroyed rather than returned to the vendor, but I found this in PayPal’s user agreement:
If a buyer files a Significantly Not as Described (SNAD) Claim for an item they purchased from you, you will generally be required to accept the item back and refund the buyer the full purchase price plus original shipping costs. You will not receive a refund on your PayPal fees. Further, if you lose a SNAD Claim because we, in our sole discretion, reasonably believe the item you sold is counterfeit, you will be required to provide a full refund to the buyer and you will not receive the item back (it will be destroyed). PayPal Seller protection will not cover your liability.
Merchants take heed — “in our sold discretion” gives PayPal at lot of power.
In response to my query, a PayPal spokesperson replied via email,
“While we cannot talk about this particular case due to PayPal’s privacy policy, we carefully review each case, and in general we may ask a buyer to destroy counterfeit goods if they supply signed evidence from a knowledgeable third party that the goods are indeed counterfeit. The reason why we reserve the option to ask the buyer to destroy the goods is that in many countries, including the US, it is a criminal offense to mail counterfeit goods back to a seller.”
A lot of small businesses rely upon PayPal, and this type of incident causes concern among merchants. For example, one commenter on Regretsy pointed out,
This scheme of PayPal’s makes a great way to perpetuate fraud. Want to swap the fake Vuitton bag you bought on Canal Street for a real one? Just buy that real one on eBay, pay through PayPal and report the ‘fake’!
Credit card transactions in general place the burden of proof on the merchant. For example, if I ordered goods and subsequently advised the credit card issuer that the product didn’t arrive, the merchant would face a chargeback unless they were able to provide strong evidence to the contrary. PayPal adds an additional layer. If a buyer who has purchased through PayPal using a credit card is not satisfied and disputes the charge through their credit card issuer, the burden of proof falls to PayPal.
My point is not to excuse PayPal of their responsibilities. They’re in the payment game and need to treat all parties fairly as well as manage their own risk. However, it’s also not fair to assume that these type of disputes or the potential for merchant losses are specific to PayPal. It’s also not realistic for sellers to assume that PayPal will protect them from all potential fraud scenarios.
I’m happy to see PayPal take a strong stand against counterfeit goods, but I just wonder if destroying a violin — even if the label was wrong — was the right answer in this case. I suspect executives at PayPal are asking that same question.
iPad a notebook killer?
As I sit here on my morning flight from Ottawa to London I’m contemplating my words of a year ago. I was wrong. The iPad is going to put a serious dent in the notebook market due to the convergence of multiple factors:
1) The iPad is beyond cool – it’s affordably cool. While the device may cost the same as netbooks and low-end laptops, consider the apps. $10 gets you Keynote — which last night flawlessly slurped in a .pptx from Microsoft PowerPoint. I put my final touches on today’s presentation and emailed myself both a .ppt and .pdf of the presentation.
2) As a device for mobile users, the iPad is light, has a battery life easily twice that of most laptops, and is virtually instant-on. The main drawback for writers is the on-screen keyboard, but with Bluetooth keyboard support the number of options continues to increase.
3) Mobile phone operators are slowly starting to provide affordable data plans for the iPad. In Canada they generally continue to screw their customers – the original $30 for 6GB iPhone plans are nowhere to be seen, but good deals will hopefully return as additional competitors enter the market.
4) Cloud computing is making remote access to virtual computers a cost-effective reality. With Citrix and Windows Remote Desktop clients available for the iPad, connecting to a remote computer with resources that far exceed that of any laptop is not only possible – it is about to become a commodity.
5) For many companies, the days of 3-year laptop refresh cycles are over as they seek all possible cost reductions. As a result, a new generation of workers are emerging: Those who are sick of lugging around heavy, old, and frustratingly slow laptops that have a negative impact on their productivity. (These same companies appear oblivious to the productivity losses and morale issues caused by their failure to provide decent tools to their employees, but let’s save that for another article.) Some workers now choose to use their own computer for work – and for many the iPad and virtual machine solution will be a winner. Some firms are embracing this, including updating their infrastructure to support corporate email on a variety of employee-owned devices.
In short, expect laptop sales to decline.
Apple seems to get this too — you won’t need a Mac or PC to set up, backup, or use your iPad or iPhone with this fall’s release of iOS 5.
Why successful people leave work early
I just came across this great article on Business Insider entitled, “Why Successful People Leave Work Early.” Too often our days turn into an email and telephone rat race with little real work getting done. This article is worth a read.
Buy online with confidence
I’ve made a lot of online purchases and I often purchase goods online to take advantage of better selection and prices. For example, I recently ordered a larger drive for my desktop PC. Newegg and Tiger Direct both had a good product for a good price, and shipping was reasonable considering the cost of gas and my time to go to the store.
I’ve only had two bad online experience, and I got my money back both times. Yet I continue to hear horror stories from others. So I thought I’d share my approach.
First and foremost, there is nothing magic about shopping online. The major difference when you walk into a shop is that you have a good idea where they are located. However, disreputable bricks-and-mortar stores (along with phone and mail order outfits) ripped off consumers for years before the Internet was invented.
So how can we shop online with confidence?
1) Consider ordering from businesses you know. Saving a few dollars on an unknown vendor may not be worth it.
2) If you’re looking for something and don’t know where to find it, consider using eBay or Amazon. Carefully check feedback on the vendor before buying.
3) Always pay by credit card. From time to time you may run across vendors who request payment by other means. They might want to you wire money using Western Union or a similar service. The problem is that once you’ve sent your money, there is little you can do about it. Real online merchants accept credit cards or use a service like PayPal that accepts credit cards on their behalf. Period.
4) Understand any rules that apply to disputes. For example, if you make a purchase on eBay and pay using PayPal you must open a dispute within 45 days. Be wary of anyone who may be trying to string you along with a series of excuses, delays and apologies.
5) Next to how they treat other customers, the best predictor of how a business will treat you after getting your money is how they treat you before. When shopping online we often have our choice of products and resellers. When I”m trying to decide, I’ll often email a few vendors to ask their advice or for product information. The timeliness and quality of their response speaks volumes about them.
Have other words of wisdom to share? Please comment!
Do as we say, not as we do.
We often hear banks complaining loudly about the losses they suffer from payment card fraud. Campaigns like “Protect your PIN” and humorous commercials with a miniature armoured truck following a customer down the street must cost tens of millions of dollars.
But then consumers still receive calls like I did on Saturday afternoon. The bank – or someone claiming to be from the bank – called me, advised that they were recording the call, welcomed me as a new customer, and then asked me for my date of birth and postal code, “to confirm they were speaking to the right person.”
I have a very simple rule: If I call you, it’s reasonable for you to ask me to prove I am who I say I am. However, if you call me, you get to go first. And unfortunately, while banks are somewhat good at authenticating their customers, they never seem to consider how customers should authenticate them.
When I declined to provide personal information to the caller, she politely replied that I could call the number on the back of my card if I had any questions and then she ended the call.
So I did just that, and asked about the call. The CSR verified that the person who called me was indeed from the bank, and that they ask for a date of birth and postal code to make sure they’re speaking with the “right person”. But he didn’t have a solution to how I should authenticate future callers who claim they’re from the bank.
Banks should know better. Telephoning customers and asking for personal information is irresponsible and contributes to the identity theft problem. Banks should be telling their customers that they will never call them and ask for personal information – just as they currently do for PIN numbers.
There’s also an obvious solution: The bank could easily add one more field to their database, a password that they will use when they call me. In fact, next time they do call, I think I’ll ask them for their telephone password.
Perhaps the Bank’s security, fraud and marketing people need to have a chat.
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