In part 1 of my series on how to buy and sell websites, someone left a comment asking about the type of protection there is when buying websites via PayPal. After I responded to the comment it got me thinking about the other side of the coin – protection for the seller when doing deals through PayPal.
My general rule of thumb is that you should never do a direct deal with a buyer when the amount of the website being sold is over $1,000. You should always use an escrow service. There are always exceptions to the rule but those are my general guidelines. For websites under $1,000, doing direct deals is usually o.k. and for me personally, PayPal is the easiest way to do it – but how do you protect yourself as a seller when doing a deal through PayPal?
According to PayPal’s policies, sellers have some protection against claims, chargebacks, or reversals that are based on unauthorized transactions or items not received. It’s the latter part of this policy we’re going to concentrate on here – the “items not received” part. What this means is, PayPal (in theory), will protect the seller from a buyer who makes the claim they never received the item and who consequently wants their money back – even though the buyer may have indeed received the item.
As spelled out in PayPal’s seller protection policies, there are a number of criteria that must be met by the seller in order for this protection to go into effect. One of the criteria is that something must be physically shipped. Specifically, it states: “The item must be a physical, tangible good that can be shipped.” This one criteria alone is pretty hard to meet when you’re selling a website because nothing is physically shipped; so much for the PayPal seller protection, right? Well maybe not.
I was browsing through the Warrior Forum yesterday and I stumbled upon a post from a seller who wanted to know what kind of protection he would have if he sold a website through PayPal. An experienced Warrior, who also happens to be a very successful website flipper, chimed in with a strategy that I thought was just brilliant and one I hadn’t thought of before.
Her name is Suzanne Bucciarel and she’s the webmaster behind NicheBloggingTreasure.com. She suggested that the seller get the address from the buyer and ship the site to him on CD via certified mail. That way, it isn’t a digital download and you have proof of shipment. What a fantastic idea!
This not only goes a long way in meeting PayPal’s criteria to get seller protection, but it also gives the seller a lot more control in the transaction. Instead of giving the buyer immediate access to everything, you force a slight delay in the transfer. If the buyer is a scammer and grows impatient and files an “item not received complaint,” you’ll meet the PayPal criteria for seller protection plus you’ll have a backup of all the files. But most importantly, since you didn’t just hand the site over to the buyer, you’ll still retain full control of the website. Even if PayPal doesn’t find in your favor and you are out the money, you’ll still have your website intact.
There is just one caveat to this tip – doing deals through PayPal is still a high risk venture so don’t think this strategy guarantees you’ll be protected by PayPal’s seller protection policy. PayPal is notorious for having a strong bias towards buyers and for finding in favor of buyers over sellers. You should still vet the buyer as best as you can BEFORE sealing the deal and exchanging anything. And if everything checks out o.k., then employing this strategy may give you a little extra piece of mind and added protection.
