PayPal is a great idea and for 95% of users it is a wonderful way to do business without any problems. BUT there are drawbacks and you should know them if you want to protect yourself. I would like to offer a few pieces of advice so you may avoid becoming another PayPal VICTIM .
1. PayPal is a great option for payment, but they are not a safe payment method .And it sometime put troubles in your account ,so just like the saying goes, NEVER PUT ALL OF YOUR EGGS IN ONE BASKET if you want your business is not interrupted . Having several accounts is a good idea .
2. Be aware that the Seller and Buyer Protection offered on PayPal is not exactly as it seems. Nothing is 100% secure . And in the worst case ,you still lost money with these "protection" . Never buy or sell any item that you are not prepared to lose. Trying to follow the rules is still recommended but don't expect them to protect you at all times. Keep your own documentation, research as much as you can, and do good business and your are bound to come out ahead.
3. if you are a seller , as an extention of #2, never 'offer' insurance and signature confirmation as an option. For anything of value these must be required, at the very least you have to get a signature confirmation. These are the only tools you have to prove that the transaction was completed. Don't give up your protection because the buyer doesn't feel like paying for it. Because in the end it is up to you, not the buyer, to provide proof of delivery.
4. Always use your CC for transactions on PayPal. Mastercard and Visa only. AMEX and Discover are not recommended because in the case of chargebacks they do not hold PayPal responsible for chargeback and disputes. Also keep in mind that you have every right to dispute the charge with your CC company, but if you win, PayPal may very well debit your account for that amount. Be prepared to lose the money or spend a lot of time fighting with PayPal over lost funds, a frozen account, or worse, an 'authorized' withdraw from your bank account.
5. If you have to supply PayPal with a bank account in order to make withdraws, you may want to consider opening a second account just for PayPal and internet transactions. This can limit your vunerability to unauthorized charges. Keep in mind that these charges may cause your account to be overdrawn and assessed NSF charges, but typically you can have these reveresed if the charges were not authorized.
6. Never let anyone log into PayPal using your computer and vise versa. PayPal has a great way of linking accounts and occasionally it has no rhyme nor reason. PayPal does use ISP to link accounts though and although this is a silly way to link accounts, it is done and it causes problems for many. If at any time PayPal has 'linked' your account with another and the other user has a problem with PayPal, their problem now becomes your problem. Example, Customer A buys from Customer B and pays with PayPal, Customer B then buys something from Customer C and also uses PayPal. PayPal discovers that Customer A has used a stolen credit card. All three accounts will immediately be affected.
7. My friend - a money exchanger (he buy and sell money in payment systems such as Moneybooker ,Paypal,Liberty reserve...) has a rule for himself : never receive an amount of money if he can't verify the source . Long time ago ,he did receive an amount from a fraud paypal account - and got frozen immediately
8. READ PayPal's ToS, and understand it fully. They are not very flexible if they catch you breaking a rule and if you have any kind of funds in your account they could be held for 180 days. Their ToS is long and complicated but it's the small print that has most often caused problems with users.
9. As an expansion of #8 ,you can see many service for removing Paypal limitation in account ,and they can charge you 50% of total amount in Paypal account for doing this work . In fact,you can remove the limitation yourself by contacting Paypal and do as they request .
10. Keep in mind that despite knowing the ToS, you could still get burned because of the simple phrase found in it, "If PayPal 'believes' that you cause a liability to yourself, PayPal, or other members". This statement is so broad that it is often the only thing in the ToS that PayPal can get you with. So in the case you can't take your money back after meeting scammers ,Paypal will take no responsibility .They wrote rules and rules are good for people who write them first
11. If your PayPal account is frozen or you feel you have been unjustly treated, remain persistent. Supply all the information requested and follow-up constantly to assure they have received said information. Know your rights, there are many sites like www.paypalwarning.com and www.paypalsucks.com that can give you advice and resources in bad situations. Be prepared to report PayPal to all the appropriate authorities.
In my experience ,I met some troubles when dealing with Paypal , they put a limitation on my account when I added my credit card ,they took no responsibility when scammers scam my money ... but anyway ,everything is going right and I'm happy to do business with Paypal .
If you got experience when dealing with paypal or something interesting ,you can share with me and readers of this blog . We all appreciate to listen .
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