Paypal this is what you have to pay attention to with paypal buyer protection

Paypal customers can often get a refund for bounced purchases – even for flights. For it apply from the 29. April 2019 new deadlines for customers to respond to queries from Paypal. With simple questions the period can turn out shorter than the past ten days, with complicated ones longer. Customers should keep this in mind to avoid losing their buyer protection unnecessarily. Here you will learn how you as a disappointed customer with the Paypal buyer protection to get your right.

  1. Overview

New deadlines for buyer protection

If customers pay for goods or services via Paypal, but do not receive what they ordered or the delivered item differs greatly from the description, they can apply to Paypal for a refund of the purchase price including shipping costs. Before applying to Paypal, a buyer must try to resolve the conflict with the supplier with the help of the platform. If Paypal had questions about the case, buyers had to answer within ten days, otherwise Paypal was allowed to close the case and reject the request. From the 29. April 2019 customers must respond "timely". What this means for the individual customer is not clear.

Tip: Stiftung Warentest has tested buyer protection programs. Not only the program of Paypal, also programs of Mastercard, stores like Amazon and services like Trusted Shops (to the test buyer protection programs).

Ten-day period no longer applies

The previous fixed ten-day deadline will no longer exist. Paypal support can determine for each individual case, how long customers have time to respond to queries. For simple questions, the deadline can be shorter than before, for complicated ones significantly longer. When customers apply for buyer protection, they should keep this in mind. They should respond quickly to queries from Paypal, so that they do not lose their buyer protection because they respond too late.

Exceptional circumstances can extend deadline

The new buyer-protection-guideline provides that Paypal can – not must – extend the set deadline "if there are exceptional circumstances beyond the control of the buyer". In any case, not all transactions fall under buyer protection. As before, the directive lists a number of exceptions, for example for custom-made products.

Buyer protection also applies to flights

For services such as flights, buyer protection applies. This could be good, for example, for customers who bought flights from the now insolvent airline Germania through an online portal such as or have booked and paid with Paypal. If you were denied boarding due to airline insolvency, you could get your money back if you filed a Paypal Buyer Protection claim within 180 days of booking.

Independent. Objective. Incorruptible.

Right to buy versus Paypal buyer protection

How do the sales law of the almost 120-year-old German Civil Code (BGB) and the conflict management system of the payment service provider Paypal get along with each other?? This was the legal question that the Federal Court of Justice had to answer in the fall of 2017. The question is important, because the BGB and Paypal offer different solutions for the clarification of the following legal question: What applies if a consumer buys online, pays in advance and finally gets defective or wrong goods delivered?

The BGB provides: The seller may initially keep the purchase price paid in advance, but he is obligated to subsequent performance. This means: The seller must repair the defective goods or deliver completely new replacement goods to the buyer. If he refuses or several repair attempts fail, the buyer may withdraw from the purchase contract. Only then will you get your money back. That can last weeks.

So it runs with the Paypal buyer protection: With Paypal the buyer gets his money after the Paypal buyer protection guideline very much faster again. If the buyer receives wrong or defective goods, he applies for buyer protection at Paypal. If he can prove the wrong delivery for example with photos or an expert’s assessment and he sends the delivery back again to the salesman, the customer gets the purchase sum from Paypal within fewer days again credited. Result: The customer has his money back without long waiting for repair attempts and replacement deliveries. This also applies to services, for example if flights cannot be carried out because the airline has become insolvent.

Dealer can insist on repair or replacement delivery

With the ruling in the fall of 2017, the judges of the Federal Court of Justice had strengthened the BGB rules and the position of dealers in two cases (AZ. VIII ZR 83/16 and VIII ZR 213/16). The ruling deals with legal-dogmatic questions and is difficult to understand at first glance. However, it is clear that the pivotal point is the legal concept of "fulfillment". The judges had stated that the customer with a Paypal payment fulfills the purchase price claim of the salesman indeed. As soon as he has successfully applied for Paypal buyer protection, the fulfillment – as with the return of a bank debit note – is retroactive (press release of the Federal Court of Justice).

Two legal views – explained by an example

A consumer buys a cell phone online for 500 euros, which has a memory of 32 gigabytes according to the description of the article. He pays by Paypal. Delivered only one device with 16 gigabyte. He successfully asserts a buyer protection case with Paypal. Paypal demands that he sends the wrongly delivered 16GB device back to the retailer and then credits him his money back.

  • The Saarbrucken Regional Court had assumed in one of the proceedings as a lower court that a Paypal payment always leads to the fulfillment of the purchase price claim, even if buyer protection is granted (judgment in full text). That would mean for the example case: The salesman gets the wrongly supplied cell phone back from the customer. According to the legal opinion of the Saarbrucken judges, the seller then has no possibility to deliver a 32 GB cell phone and force him to complete the transaction. He lacks legal means of pressure. Good for the customer. He can immediately use the purchase sum refunded by Paypal to get the cell phone somewhere else.
  • The Federal Court of Justice saw the whole thing differently: in the view of the highest judges, the fulfillment effect of the payment made by the customer at the beginning ceases as soon as buyer protection is granted. Although the customer quickly got his money back from Paypal… But the legal relationship with the seller is not over despite wrong delivery. The BGB rules apply to the solution of the problem: The seller can continue to insist on the purchase price payment, provided that he is willing and able to deliver the cell phone promised in the article description.

What Paypal customers are not allowed to do under any circumstances

Paypal customers are with the buyer protection also after the decision of the BGH in a favorable position. Because by reversing the Paypal amount in case of non-delivery and wrong delivery, you can still quickly get your money back first if anything is wrong with the transaction. But: Who has successfully applied for buyer protection with Paypal, for example, because of a wrong delivery, should not ignore the subsequent efforts of the seller to settle the transaction properly after all. Otherwise you are quickly in arrears with the purchase price payment and can just as quickly lose a lawsuit in this matter. It would also be risky to spend the money back from Paypal prematurely somewhere else for the same product. It is possible that the seller, who sent the wrong device, now delivers the right one. Customers in this case have the goods twice – and also have to pay for them twice.

Paypal customers in good negotiating position

Customers who apply for buyer protection because of defective or wrongly delivered goods should return the goods with a "valid shipping document", otherwise Paypal will not grant buyer protection.

Tip: Which receipts are accepted by Paypal, is in the "seller-protection-guideline" (there under point 4).2.2). According to Paypal, receipts from the following companies are sufficient: GLS, DPD, Hermes, UPS, FedEx and TNT. Deutsche Post and DHL are also accepted. Exception: receipt for a small parcel without proof, letter, consignment, book shipment and Maxi letter. A registered mail receipt with date of delivery and recipient’s name is also sufficient.

Forcing the seller to repair or replace the goods

If customers return goods, they can also demand supplementary performance from the retailer – i.e. the sending of new replacement goods or the repair of the defect. Important: Since Paypal has charged back the purchase amount to the buyer because of the buyer protection, he can now withhold the purchase price payment from the seller until he has delivered the flawless goods. The merchant is obliged to pay in advance. If he does not deliver, the buyer can set a deadline for the seller and after its expiration declare the withdrawal from the purchase contract. The obligation to pay the purchase price is then also void according to the BGB rules.

Tip: The buyer and seller protection of Paypal can be undermined by internet scammers. What to look out for to make sure this doesn’t happen can be found in our special Safe online shopping: How to protect yourself from Internet fraud.

FAQ: You can find answers to many other questions about shopping in our FAQ on the law of sales.

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