99.9 percent of goods sold on line, are specific goods who become the property of the buyer immediately they are paid for.
If for the purpose of a transaction an item is to be delivered then the seller remains at risk, that is liable for any loss or damage, until the item is handed to the carrier, at which time, risk is transferred from the seller to the buyer. This applies irrespective of who chooses the carrier.
The responsibility for insuring the item for loss or damage rests with who is at risk.
If the person at risk chooses not to insure, and the item is lost or damaged, the person at risk may still have a right of recovery against either the seller or carrier, but only if the loss or damage was as a result of the other partyโs negligence.
Now the above principles apply to all on line transaction, including eBay, and apply irrespective of the payment method used (credit card, PayPal, Paymate, cheque, money order, cash, bank direct debit).
So how does the above fit together when it comes to the principle players in an eBay transaction โ buyer, seller, Australia Post, and PayPal.
PayPal
The PayPal User Agreement clearly states that when it comes to Buyer Protection, it is not a policy of insurance. Instead if an item is not received, the agreement makes it clear the protection is limited to assisting the buyer to recover the monies paid. However the same policy also clearly states, if the item is not received and the seller can prove postage then even if the item is not received, any claim may be decided in favour of the seller. That if postage is proved, the outcome is a finding of no right to recover by the buyer.
The above is then replicated in the User Agreement under the heading Seller Protection. That is when it comes to a buyers claim that the item was not received, the seller Protection policy acknowledges, if postage is proved, the buyer has no right of recovery against the seller
As to the kind of proof that PayPal will accept, initially it was limited to registered post, but over the years, as more and more decisions were disputed, PayPal has been required to accept other forms of proof, to the extent that now, if the seller pushes hard enough, they will accept a post office receipt showing something was sent to the postcode in which the buyer is located.
Finally if the outcome is no right to recover, then the buyer may still be entitled to a discretionary payment, however the indications are, PayPal are becoming more and more reluctant to make these payments.
Australia Post
Like any business, Australia Post (AP) is liable for any loss or damage caused to any item in its care if that loss or damage is as a consequence of negligence by one of its officers or agents.
Like most modern businesses, AP has a discretionary claims process. That is if the claim meets specific criteria, then they will pay the claim without the requirement for the buyer to take them to court.
In the past, when a claim for items lost in the post was lodged, if the item was sent regular post, AP would make a discretionary payment up to $50, or if it was sent registered post, to the extent of the insurance/extra insurance purchased, and if the actual value of the item lost or damaged was more than the cover paid, then AP would only pay the extra if the buyer took them to the small claims court/tribunal.
However, due to an increase in number of lost article claims, over the past couple years AP has introduced initiatives which allow it to record when every parcel and post pack sent regular post both enters and leaves the system. The result, they found that in nearly all cases where items were reported as lost, that loss occurred after it was recorded as delivered.
As a result, AP no longer includes items sent regular post in its discretionary claims process, which in turn means, if the buyer wants AP to compensate them for that loss, they have to take them (AP) to court.
Sellers
Whereas the actual claimant for lost items was the buyer, the AP discretionary claims process required the seller to initiate the claim, with the expectation that, if the claim was paid, to pass on that payment to the buyer.
In the past, where a claim was lodged, as it was virtually certain that compensation would be paid, most sellers, simply cut the process short by reimbursing the buyer from their own funds and then keeping the compensation paid by AP.
Today, as the chances of the claim being accepted are slim to say the least, itโs now for every seller to decide for themselves if they are going reimburse the buyer out of the own pocket; and where the AP data shows the item was lost after it was delivered, with most sellers I know now deciding not to.
Buyers
The impact that the above has on buyers is as follows:
It is the buyerโs responsibility to insure their purchase whilst it is in transit and if they donโt, irrespective of the payment system they use, if itโs lost in transit and the seller can prove postage, the buyer, has no right of recovery against the seller.
If the buyer pays for insurance, then irrespective if the buyer has established a right to recover against the seller or carrier, they will be compensated for that loss by your insurer.
PayPal Buyer Protection is not insurance. Therefore, if postage is proved, the only way you will be compensated for your loss is if PayPal decides to make a discretionary payment, and the indications are, as more and more sellers are now able to prove postage, they are becoming increasingly reluctant to make such payments.
Sort of puts the old โPayPal protects the buyer, registered post protects the seller in a wholly new light.
