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

  • Jason@DPD
  • June 11, 2015

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

Proof of Delivery Screenshot

DPD vendors can get this page for any transaction from its Purchase Detail page in DPD.

1. Log in to DPD

2. Go to Purchases in the left menu

3. Browse or search for the purchase and click the Purchase ID in the table to open the detail page.

4. At the top of the purchase detail page, click the Proof of Delivery button

Purchase Detail Page

Future Updates

We have contacted PayPal in an attempt to get further clarification on what additional information needs to be added to the Proof of Delivery page to maximize its effectiveness for vendors selling intangible items. Unfortunately, responses from PayPal are generally slow. As we receive more information from them we will update the proof of delivery page as needed.

Responses (6) / Trackbacks (0)

    by Chris Longhurst
    Jun 12th, 2015


    I noticed the ‘proof of delivery’ button today and figured it was to do with the paypal update that they announced. Again – you guys are totally on the ball. Makes my life so much easier as an e-vendor. Thanks.

    by Joao
    Jun 14th, 2015


    Finally something positive from Paypal towards digital goods sellers, actually I have always use the download info DPD provide on each purchase for claims on Paypal and yes it saved me a couple times!

    Well done DPD staff!

    by Brandi Cameron
    Jun 15th, 2015


    Great job DPD!! Thank you for everything you do!

    by Pat K.
    Jun 15th, 2015


    Good work. I like that you guys are “on it” when new developments surface. Very reassuring. Thank you.

    by Alex Korban
    Jul 01st, 2015


    Thank you for being proactive about this. I would have overlooked this change completely if not for your blog.

    by Joao
    Oct 21st, 2015


    Unfortunately it is no good, since that policy update I been losing all chargebacks even when providing all information to prove the content was delivered.

    Paypal claim I am eligible for seller protection but in the end I keep losing all cases, before that change I could say at least 70% of cases were in my favor.

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