Selling a virtual item with PayPal

[D_Roderick Beresford Stiffington IV]

This question is for the smart people out there who have both bought and sold items and accepted payment using PayPal.

Basically, when you sell and take payment using PayPal, you want the user to be verified and you ship to that address only to protect yourself. The way scams are usually run, someone will use a stolen account and pay for an item but ask to have it shipped to an alternate address, usually where the scammer is located. A month or two down the line you get hit with a Chargeback, you have a negative balance in your PayPal account and you the seller are held liable to pay it and are without your item.

So if I understand it correctly, you highly reduce your chance of getting scammed by only shipping the item to the address listed as verified, because that is the address of the person who the credit card is issued to.

Now my case is a bit different, I want to sell a virtual item, something that doesn't need to be shipped. The safest way for me to sell it would be cash or a USPS money order but any smart buyer probably wouldn't want to go and mail those since they're at risk. This has made me have to think of a new way to sell my item, and I believe I may have, I just want to run it by smart people to see if there are any flaws.

Basically I'll still want to deal with verified PayPal members only, and after they pay I will ship something to their verified address. Maybe a code of some sort, lets say its "LPSG". A couple days go by and they receive this in the mail from me, and tell me the code. This basically informs me that the person wishing to go through with the purchase does in fact live there, its not a stolen credit card and I won't have to deal with a chargeback and losing my virtual item.

At that point in time I can release the virtual item to them and both the buyer and seller are protected, got what they wanted and are on their merry way. Are there any flaws in this idea of mine that anyone sees?

 

[HellsKitchenmanNYC]

Hmm good question. I sell alot of stuff on Ebay and usually just tell people to make sure their address is correct. Never really had a prob. Your plan sounds good tho w/the code.

 

[polesmoker]

Paypal usually already charges the buyer's account as quickly as possible. You would probably need to work it out with potential buyers on a case by case basis.

 

[D_Roderick Beresford Stiffington IV]

Paypal usually already charges the buyer's account as quickly as possible. You would probably need to work it out with potential buyers on a case by case basis.

Its not a matter of them getting charged right away, its a month or two down the line I want to protect myself from people saying they never got what they payed for, or from people using stolen accounts to pay for a virtual item that doesn't need to be shipped and me getting stuck with the chargeback.

 

[D_Tintagel_Demondong]

Escrow.

 

[HellsKitchenmanNYC]

Paypal usually charges a 17 cent delivery confirmation so you're covered.

 

[D_Tintagel_Demondong]

An escrow also refers to a writing deposited with someone until the performance of an act or the occurrence of an event specified in that writing. The directions given to the person who accepts delivery of the document are called the escrow agreement and are binding between the person who promises and the person to whom the promise is made. The writing is held in escrow by a third person until the purpose of the underlying agreement is accomplished. When the condition specified in the escrow agreement is performed, the individual holding the writing gives it over to the party entitled to receive it. This is known as the second delivery.

That should solve all of your problems, but at an additional expense.

 

[dong20]

It's irrelevant, PayPal doesn't offer any form of protection for intangibles. If you want protection, burn it media and ship it.