This PayPal policy should scare sellers of collectibles...

coinpictures · January 14, 2012 1:54AM

I searched for an existing thread on this but didn't find one, which is surprising, given the potential to affect people here.

The problem is PayPal ordering the destruction of property that *IT* deems to be counterfeit, and refunding the buyer at the seller's expense, without appeal or recourse.

The policy has been in effect for over a year now (I believe), but their following through and actually having a valuable item destroyed hadn't risen to the media's attention until last month.

Sound farfetched? It's not:

http://www.geek.com/articles/news/paypal-orders-destruction-of-antique-violin-by-buyer-2012014/

http://www.auctionbytes.com/cab/abn/y12/m01/i05/s01

Visa/Mastercard cannot order the destruction of property it doesn't own, so how the hell does PayPal get away with it?

Answer: because the eBay/PayPal monolith sees itself as above the law, and until someone with deep pockets (or a government agency) challenges it, they are free to do with it what they will.

Here's a scenario that should scare the hell out of any coin dealer here:

1. I order several thousand dollars of gold bullion from a seller on eBay, paid through PayPal.

2. Upon receipt, I get my coin dealer buddy to dummy up an official looking appraisal certificate that states that the gold is fake.

3. I report this to PayPal.

4. They order me to destroy the coins and provide visual proof thereof.

5. I keep the coins and provide a picture of something gold in color having been melted, maybe some scrap jewelry or somthing.

6. PayPal refunds my payment at the seller's expense, and the seller has no appeal, nor do they even have access to my fake appraisal (PayPal does not provide the "evidence" to the seller).

So I've managed to get several thousand dollars in gold for free, maybe a commission to my coin dealer buddy.

OPA · January 14, 2012 2:00AM

Yup...go ahead & try your scenario ... Eventually, you'll be in good company at the nearest Pen.

And why should it scare sellers of collectibles, unless of course you are selling counterfeit items.

JamesMurray · January 14, 2012 2:02AM

"The reason why we reserve the option to ask the buyer to destroy the goods is that in many countries, including the US, it is a criminal offence to mail counterfeit goods back to a seller."

PayPal's policy on counterfeiting is not news to EcommerceBytes readers. As detailed in this EcommerceBytes article, PayPal asks foreign buyers of U.S. items to destroy counterfeit items after providing the company with documentation from a third party that the item is counterfeit. Here is the pertinent section:

"If an international buyer purchases an item, the buyer will be instructed to provide PayPal with evidence (documentation from a 3rd party) that the item is counterfeit. PayPal will validate the documentation and then ask the buyer to destroy the item and attest to this action by signing an affidavit."

michiganboy · January 14, 2012 2:04AM

The problem with that is any real coin/bullion dealer gonna have receipts and records of his purchases, and want to see you in court and probably win since you would have supposedly destroyed the evidence. I think Paypal has almost got it right, except they should destroy the counterfeits to deter this kind of thinking without thinking it through kind behavior that can come up.

coinpictures · January 14, 2012 2:05AM

<< Yup...go ahead & try your scenario ... Eventually, you'll be in good company at the nearest Pen.

And why should it scare sellers of collectibles, unless of course you are selling counterfeit items. >>

Seriously? You don't see an opportunity for scammers to take advantage of this, since the seller has no opportunity to see, let alone refute the "evidence" of the item being counterfeit?

My point is NOT when the policy is applied to merchandise that is in fact counterfeit, but the loophole that allows it to be applied to merchandise that is not.

OPA · January 14, 2012 2:06AM

<< 

<< Yup...go ahead & try your scenario ... Eventually, you'll be in good company at the nearest Pen.

And why should it scare sellers of collectibles, unless of course you are selling counterfeit items. >>

Seriously? You don't see an opportunity for scammers to take advantage of this, since the seller has no opportunity to see, let along refute the "evidence" of the item being counterfeit?

Egads. >>

Read the post above yours.

AUandAG · January 14, 2012 2:16AM

I've done this on a Chinese counterfeit TD. Simple photos of the coin as it was measured
was all that was needed. I was concerned about sending it back to China and was told
that it was not necessary to return and just destroy it.
Mailing UNMARKED counterfeits is against the law it seems.
bob

BAJJERFAN · January 14, 2012 2:45AM

A counterfeit one ounce gold Buffalo coin can still contain an once of gold even tho the coin itself may be a poorly executed attempt to duplicate an authentic coin which has value in excess of melt ou bullion value. What degree of defacing would be required to convert it from counterfeit status to an ounce of bullion? Surely you shouldn't be allowed to keep an ounce of someone else's gold that isn't your.

kaz · January 14, 2012 3:28AM

As far as counterfeit coins go, I like this policy in that one does not have to return the item to the seller to be refunded. I went through a bunch of rigamarole a few years ago with an eBay seller who wanted his fake trade dollar back. He didn't get it.

johnny9434 · January 14, 2012 3:29AM

im still glad i do very little with ebay and paypuke. i just stick with people ive been dealing with for quite some time

astrorat · January 14, 2012 3:50AM

PayPal has no legal authority to order the destruction of property it does not own. While they might "get away with it," if challenged in court it will not be upheld.

PayPal can use leverage (e.g. withholding a refund) to "force" an action, but they don't have the legal authority to enforce property disposal unless they hold title to it. In the article and what I read in PayPal policy, PayPal just told the buyer ... we won't refund your money unless you destroy it. Buyer agreed ... thus accepting the responsibility and accountability for the destruction. PayPal didn't destroy it ... the buyer did. PayPal is in the clear ... legally.

PayPal may or may not (I do not know) have the legal authority to refund/withhold seller/buyer funds with respect to a transaction.

Oh ... yeah ... this is really a stupid policy on PayPal's part. Why does it seem that common sense eludes the principals at PayPal and eBay ... geez!

astrorat · January 14, 2012 3:54AM

<< The problem with that is any real coin/bullion dealer gonna have receipts and records of his purchases, and want to see you in court and probably win since you would have supposedly destroyed the evidence. I think Paypal has almost got it right, except they should destroy the counterfeits to deter this kind of thinking without thinking it through kind behavior that can come up. >>

PayPal can't legally destroy property they don't own. Unless PayPal becomes an intermediary taking ownership of property, determining its authenticity, and then "reselling" to the ultimate buyer, then PayPal legally can't do anything with the property because they don't own it. eBay is a venue to match sellers and buyers. PayPal is a method of payment. Neither company owns the items being sold.

eBay is the drug dealer and PayPal is the bagman. When the bagman gets greedy, he gets whacked. It happens in all the mob movies!

amwldcoin · January 14, 2012 4:01AM

Dang! Ebay made me send a counterfeit coin back to a seller in England! Get this....I bought the coin(Hawaiian Dollar),Received the coin 2 days later from some Chinese dude in Ohio! I contacted ebay and they told me I had to send the coin back to the address on the seller's account...Registered to England! Of course the coin would never be picked up especially since I placed a high value on it so the bogus seller would have to pay a lot of vat tax(evil grin). I had to go back and forth betwqeen ebay and paypal but got my money back. I actually wanted to keep the coin for my counterfeit collection because it was a good counterfeit. Of course the same pictured coin came up a few days after I received mine form a seller in Texas!

AUandAG · January 14, 2012 4:20AM

Here's a counterfeit I got in a collection and I defaced with a common wood chisel. Sent
to the refiner and got my gold value out of it.
bob

ebaytrader · January 14, 2012 5:01AM

There is no such thing as a "counterfeit" violin. Even a violin produced of plastic for decorative purposes only would still resemble a violin and that is basically the only criteria for determining its essence. It does not appear that this was the issue at hand. A dispute of provenance is not and does not constitute a counterfeit offering. PayPal needs to make the seller whole.

amwldcoin · January 14, 2012 7:28AM

<< There is no such thing as a "counterfeit" violin. Even a violin produced of plastic for decorative purposes only would still resemble a violin and that is basically the only criteria for determining its essence. It does not appear that this was the issue at hand. A dispute of provenance is not and does not constitute a counterfeit offering. PayPal needs to make the seller whole. >>

I wager they end up paying for that violin!

This PayPal policy should scare sellers of collectibles...

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