Rushing to finish a poster display before catching a plane to California, Monica Hawley realized she had to convert a PowerPoint document to a portable document format (pdf).
So the 32-year-old assistant professor went online to find a conversion tool, quickly tracked down a company that offered a 30-day money-back guarantee, and then used PayPal to purchase the product for $49.95.
The software was good, Hawley said, but it did not work the way she hoped it would. So the Baltimore resident requested a refund, only to discover what many people don't know: that PayPal doesn't afford you the same dispute-resolution protections you would have if you paid by credit card.
To complicate matters, when Hawley e-mailed the company, www.pdf-convert.com, she got no response.
"There was no contact number for complaints, just the sales department," Hawley said. "So I filed a complaint with PayPal."
Through PayPal's Dispute Resolution process, Hawley got the chance to communicate with the seller. The problem was, the seller only wanted to know why Hawley did not test the trial version of the software before buying.
That would be the only time she ever heard from the company, Hawley said.
So Hawley escalated her complaint. PayPal investigated and subsequently rejected her claim.
"They said they only provide protection if the party doesn't send you anything," Hawley said. "So I have no recourse since I didn't pay with a credit card. I used my PayPal balance. I've used PayPal many, many times thinking I had some protection, but in reality, you don't. People don't know that."
Whether Hawley would have gotten a refund even if she had paid by credit card is not certain but she makes an important point.
I contacted the software company by e-mail. There was no telephone number to lodge a complaint. E-mails to the sales department and Web site editor were available, but none designated for problems.
No one from the company responded to my inquiry.
I then called San Jose, Calif.-based PayPal, which is owned by online auction house eBay.
To the company's credit, spokesman Jamie Patricio said, "We have decided to issue a courtesy credit as an educational tool for the user at this time."
So Hawley got her money back. Here is the lesson that should be learned from this.
PayPal does offer a certain level of protection. The payment system allows any person with an e-mail address to send and receive payments online without sharing bank account numbers, credit-card numbers or other types of financial information with the merchant.
But when it comes to disputes, the level of protection you get from PayPal depends on the purchase you make and where you purchased it.
For example, only eBay transactions are covered by PayPal Buyer Protection, a free program that covers qualified transactions on eBay up to $2,000 for items that don't show up or for items that show, but are significantly not as described.
If you buy an item on eBay using PayPal, and you don't receive the item or receive an item that you believe is significantly not as described, Patricio said, your best chance to resolve the complaint is by going through the Resolution Center.
That process will cover you, though, only if you did not purchase "intangibles, services, airline flight tickets or licenses and other access to digital content," according to the user agreement
Hawley's software falls under digital content and intangibles, Patricio said.
"I sympathize with her," said Avivah Litan, a security analyst at research firm Gartner Inc. "PayPal shouldn't be giving accounts, or doing business, with merchants who don't have good customer service. But then, PayPal and credit-card companies do not guarantee that you are dealing with reputable merchants.
"You can't really hold the payment center liable," Litan said. "Unfortunately, it really was her problem."
When you file a dispute with a credit-card company, government regulations require the company to credit the disputed amount to your account while it investigates. PayPal, by comparison, investigates and then determines whether you get your money back.
And, as opposed to PayPal's refusal to cover intangibles, digital content and such, credit cards will cover you for most purchases that cost more than $50 and are purchased in your home state or within 100 miles of your mailing address. You must have first made a good-faith effort to resolve the problem with the merchant directly.
Had PayPal declined to refund Hawley's money, "She could take the software company to small claims court," Litan said. "The fact that she wasn't happy with [the product] is a gray area."
Not so gray is the fact that pdf-convert's money-back guarantee was useless.
"That's what's getting me," Hawley said. "If PayPal wants to be used for more transactions outside of eBay, I think their protections need to be stronger. I think once I notified PayPal about this business, they should have said, `We're not dealing with you because you're harming our name.' To me, PayPal's nonaction makes PayPal complicit."
In defense, Patricio said, Hawley's complaint will be held on file and PayPal will "look at this business again." Should a pattern of complaints surface, PayPal could decide to take action against the company.
But for future purposes, if it is greater protection Hawley wants, Litan said, "credit is the safest method for consumers to use. If she paid PayPal with her credit card, she'd have better protection."
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