I received an email from Paypal this morning that may impact domain name deals that are transacted via Paypal. The company is now covering digital goods with Paypal Purchase Protection. The email did not specifically mention domain names, but it would surprise me if domain names were not covered based on the announcement that was made to customers this morning.
In my opinion, the most safe way to transact on a domain deal is to use an escrow service. This helps reduce quite a bit of the risk when doing a domain name deal. The escrow service verifies payment for the domain name and it verifies that the domain name was transferred to the buyer before releasing the funds. Essentially, an escrow service helps reduce risk.
I will reach out to Paypal to see if the sale of domain names is covered when this policy change becomes effective.
Here is the email I received this morning:
Subject: Change to PayPal Purchase Protection
As one of the leading ways to buy and sell around the world, we have provided protection for eligible purchases of physical goods for many years. Now, to bring us in line with coverage that other providers already offer, we are changing that protection to cover intangible goods.
What is changing?
Effective July 1, 2015, we will be extending Purchase Protection to cover intangible goods. This includes services, and digital goods, like online music, e-books, games, travel tickets, and software downloads.
As of this date, if a customer pays for a service or digital product using PayPal, and it’s not received or is significantly different from how it was described, they can file a purchase protection claim.
Why are we changing it?
PayPal’s Purchase Protection globally has covered physical goods for many years, and this update brings PayPal in line with the coverage that some card providers already offer.
PayPal can now be seen by your customers as an even safer way to pay. For businesses like yours, it has the potential to help improve sales, because it can give consumers more confidence when making purchases for digital goods and services.
How does this affect you?
As a business that sells intangible goods, you’ll need to respond to buyer claims for intangible goods, with ‘compelling evidence’ of the transaction. This compelling evidence could vary depending on the type of goods or services provided. Please refer to the User Agreement for more information.
Although the expanded Purchase Protection extends coverage to buyers for intangible items, Seller Protection does not apply to intangible items. However, having proper Proof of Delivery can help a seller win a buyer’s Item Not Received Purchase Protection Claim.