There’s no seller protection for domains but it makes the buyer more comfortable.
I saw that Efty has added the option to accept PayPal payments for domain names listed on its platform. I can see how this could boost sales; PayPal is trusted and much more recognizable to the general population than an escrow service like Escrow.com and Payoneer.
In a blog post, Efty wrote:
At Efty we do recommend using a licensed escrow integration partner such as Escrow.com or Payoneer Escrow for higher priced domain names but we also understand there are benefits of adding PayPal buy-it-now buttons for your lower priced inventory such as receiving instant payment for your domain name and allowing buyers to pay for your domain name in a matter of seconds instead of going trough the often longer, escrow process.
I agree with this.
Keep in mind that PayPal protects buyers of intangible goods like domain names but not sellers. So you’re taking some risk when you sell a domain with PayPal.
That said, it might be worth taking that risk for lower priced domains. I’ve sold domains and accepted PayPal when the amount of money was low enough that I wouldn’t lose sleep over it and when there was nothing suspicious about the buyer.
In the case of Efty, buyers will be able to instantly pay, so you can’t do due diligence ahead of time. Still, I think accepting PayPal could push a potential buyer over the edge. It makes them more comfortable.
Bottom line: I think it’s wise to accept PayPal for low-dollar transactions. You just need to decide what that threshold is for you.
Generally, people seem to prefer Paypal over Escrow most of the time. Especially if you are not in US, getting thru all the wickets necessary to pay via Escrow.com can be time consuming and painful – especially since new rules were put in place.
I won’t use Paypal anymore.
I learned, the hard way, a lesson a few years ago. I had sold a 3-character word to someone in Toronto. A few days later, Paypal advised me that they couldn’t honor the payment, since “the so-called cc owner” had told them his card had been used by his nephew. Of course, the domain name had at that point reversed to a “privacy status”.
I tried, with all the documentation/emails that I had, to convince Paypal that it was the same person, but without success.
That happened a few years back. I didn’t have the means/tools that we have available now.
My 2-cents: “stay away from Paypal”.
On the othe end, I haven’t had any problems with Escrow.com
A three-letter word? I am so sorry to hear that.
Also, I beg to differ with Andrew. It’s open season on lower-priced domains, if you depend on Paypal.
You got scammed man. Never used paypal for selling big ticket items. I know a guy that sold a $7,000 statue to somebody and 3 years later they said they never got it and Paypal pulled the money out of his account. That was a while ago so I don’t know if they have the same policies but either way, I would never use them for a large purchase.
PayPal is now offering seller protection for services, trips and tickets. Got en email just today.
Really? Can you forward it? Did it mention intangible goods?
Paypal offers very poor protection to domain sellers, however domain buyers simply prefer using Paypal so you might be losing money when you don’t accept that option.
That’s why at Undeveloped we simply insure our sellers with our integrated escrow service when your buyer uses Paypal. In the case where your buyer performs a chargeback via Paypal we never go back and get the paid out sum back from our sellers.
Currently over 50% of all acquisitions on Undeveloped are paid by Paypal.
Great article, I’d have to agree with you. When it comes to some small $XXX transactions I think PayPal is fine. But, when it comes to anything $500+ (in my opinion) the Escrow fee’s are worth it. PayPal has gotten better about intangible goods, but I still try to protect myself as much as possible. Mention the transaction details/domain..etc in the PayPal notes..etc
Even innocent mistakes can be painful.
One buyer, months after his purchase, failed to recognize the item on his Paypal statement. So he initiated a charge back. Even though he admitted his mistake right away, he was too preoccupied to contact Paypal in a timely fashion. So the process dragged on until the deadline for disputing the chargeback had passed. Ultimately I got a refund directly from the guy, but that chargeback stayed on my record and wasted a lot of time.