BEWARE of paypal GIFT chargeback

[FaC]

Just want to share this info i found on one of the forums.

A gold buyer in Guild wars 2 did this to me last week. He paid me in Paypal as gift then after receiving his gold he chargeback in credit card and poof! he got his money back. and Paypal did nothing even if i have proofs.


- Many of you know that sending paypal GIFT payments offer little to no buyer protection.

HOWEVER, there is a loophole where PayPal gift can be used to defraud THE SELLER.

I hesitate to share this info, but I think people should know and protect themselves.

Here's the scenario:

The seller asks for the funds to be paid as GIFT, thinking this offers protection for the seller.
The buyer sends a PayPal gift using a credit card by clicking on the pay the associated PayPal fees option. (I am paraphrasing the exact option here.)
The recipient of the payment (seller) receives the GIFT payment and the full amount shows up in their account as a gift.
Everything looks okay so the seller ships the item.
Hours, Days or weeks later, the fraudster buyer will issue a chargeback with their credit card company by claiming that their credit card was stolen, etc. The lies are easy.
Credit card company will issue a chargeback, and in response, Paypal will hold the associated funds--which are now in the seller's account.
Because this was a GIFT transaction, as far as Paypal is concerned, there was no sale or exchange of goods.
Because there was no sale, the seller cannot use shipment confirmation to argue a legitimate transaction. Evidence of shipment means nothing when there was no official exchange of goods.*
Seller's funds are held and it will reversed to buyer and buyer gets a free items.

From now on i will not trust PayPal!!

[cotimvp]

[Privilege]

[JaksPeasant]

Well most sellers use this method for the reason stated above but also for circumventing paypal fees. Personally you should just generate an invoice, even if there is a fee. Hope this helps.