PayPal Policy Update: Added Purchase Protection for Intangible Goods and How it Affects You

Last night PayPal notified of a policy update, effective July 1, 2015, that included a number of changes to their User Agreement, Acceptable Use Policy, and Privacy Policy.

Intangible Items Added To Buyer Purchase Protection

The most important change to sellers of intangible items such as games, software, ebooks, music, or audio files is that they are now extending Purchase Protection to buyers of intangible goods.

Section 13.3
We are increasing the scope of PayPal Purchase Protection to now include coverage for intangible items.

More importantly, while they are extending Purchase Protection to buyers, they are not extending Seller Protection.

Section 11.4
Although we are expanding PayPal Purchase Protection to buyers for intangible items, Seller Protection will not apply to intangible items. We are including a note in this section about this. In addition, we are adding a definition of Proof of Delivery for intangible or virtual items or services which can help a seller win a buyer’s Item Not Received Purchase Protection Claim.

Proof of Delivery for Intangible Items

As they mention above, the note added to the section defines proof of delivery as “documentation satisfactory to PayPal” that the item or service was provided to the buyer such as proof of download including the date of fulfillment.

“Proof of Delivery” for intangible or virtual items or services is documentation satisfactory to PayPal that the item or service was provided to the buyer such as proof of download including the date of fulfillment.

NOTE: Although Purchase Protection extends coverage to buyers for intangible items, Seller Protection does not apply to intangible items. However, having proper Proof of Delivery can help a seller win a buyer’s Item Not Received Purchase Protection Claim.

It is important to note that they only say proof of delivery, including proof of download and the date of fulfillment “can help a seller win a buyer’s Item Not Received” claim and does not guarantee a decision in the vendors favor.

In summary, PayPal has made it easier than ever for buyers to make Purchase Protection Claims against sellers of intangible (downloadable) goods. They have outlined in a very non-specific way how vendors can provide proof of delivery of intangible goods and said that it will in some way influence or “help” the claims process.

View the Entire PayPal Policy Update Here

What DPD Is Doing for Vendors

DPD is a Gold PayPal Partner and listed in the PayPal Solutions Directory.

DPD has always recorded purchase details such as the time the purchase took place, buyer IP address, the full PayPal responses and IPNs, and all buyer information provided to the DPD or PayPal checkout flow.

We have also always recorded download attempts including the amount of the file transferred, if we can detect a successful full delivery (based on transmitted data and the actual file size stored on our servers), the download IP address, and user agent.

We have taken all this information and compiled a Proof of Delivery page that can be provided to PayPal in the event of a Item Not Received Purchase Protection Claim. The page is hosted on DPD servers at a public but salted and randomized URL to protect buyer and seller information.

Here is an example Proof of Delivery page: Demo Purchase Proof of Delivery