• by adam , Shelly Palmer , February 2, 2006

There are some people who have had some very sub-optimal experiences with PayPal. Personally, I have only had good experiences with the service. But, according to some of my closest friends and advisors, I may belong to a pretty small club. The following admonition comes from a very trusted source, my techno-geek brother, Jason. Here's what he has to say on the subject:

For maximum protection when paying via PayPal, make sure you SWITCH the payment to come from your credit card instead of your checking account. And, always empty your PayPal-received funds back to your checking account and ALWAYS switch payment type to credit card.

Here's why:

Should you have a payment dispute, and the seller disappears or empties his own checking/PayPal account, you have ZERO recourse. With a credit card payment, after PayPal tells you "no joy" on recourse, you can file a credit card company complaint and get your funds back.

Never pay with PayPal funds or from your checking account directly-- you have no recourse if the merchant has closed his PayPal account or zeroed out his bank checking account associated with PayPal. Use your credit card through PayPal to enjoy maximum protection.

This hard-earned knowledge comes to us courtesy of a merchant who has been on both sides of the issue with PayPal. He won as a merchant against a consumer claiming non-receipt, but got shafted as a purchaser from a merchant who never shipped merchandise to him. Fortunately, he paid with his VISA via PayPal and not directly from checking or PayPal funds, so VISA dealt with it for him.

Have you had an interesting run-in with PayPal? You can beat up or build their reputation by clicking below to post your rant or rave!