Anyone who's used Ebay knows about PayPal; it's the transaction processing arm of eBay. Nearly all eBay auctions are funded through you're PayPal account moving funds between the buyer and seller's bank accounts. For the most part, PayPal works fine with the exception of pulling a 6% transaction fee out of the seller's proceeds). But I just got hammered by PayPal, and I'm not too happy.
A few weeks ago I sold a bike on eBay. The bike was an older bike with a hodge podge of parts. The frame had a little rust. All these details were disclosed as well as pictures included. I listed the price at a low opening bid. To my surprise, the bike got bid up to $510--I hoped for $250 best case scenario. The buyer provided me with $50 for shipping and did add more for insurance. UPS provides for $100 of insurance unless you pay for more. I paid the local UPS store to pack the bike up and ship it. The total bill came to $60. I was glad to pick up the difference because the bike sold for so high. Anyways, a week later, I get an email from the buyer saying he was going to send the bike back and cancel the PayPal payment because the bike wasn't as described. After a few more emails, I learn that the bike was trashed en route by UPS. The frame got scratched up, the quick releases (which I packed in ziplock bag and taped to the frame) were missing, the chain ring was bent. I told the buyer to file a complaint with UPS and told him he was the one who refused to pay additional insurance. Rather than go to the UPS store, he filed a complaint against me on PayPal. PayPal put a credit for the total amount of the sale and shipping in my account, which gave me a negative balance because I'd already spent the proceeds to switch my road bike from crappy SRAM to Shimano groupo. Both parties then provided their story of what happened. His Explanation: Item doesn't fit description. My explanation was a summary of all the events explained above. At the end of the day, he got all his money back and I got the busted up bike back. After 2 phone calls with PayPal customer services agents, they said I'm completely responsible. This is odd to me because whenever I buy something on eBay, it's the buyer paying for the additional insurance. Because the buyer pays for the insurance, you'd think he or she'd be responsible for all or at least some of the shipping responsibility. Apparently not!
What this means is this: I can buy a brand new complete bike on ebay, take some of the parts and claim the bike was mishandled during shipping, rip up the box a little, and complain to PayPal that the item isn't as described. The seller would be responsible to take back the bike and the buyer would only have to foot the bill for the return shipping. Now I would never do anything like this. And this is an extreme situation. But why would I ever sell anything on eBay and use PayPal? I won't, anymore. For now on, money orders. Meanwhile I have to figure out how to pay off the credit. Grrr!