Paypal’s Return Policy and It’s Significance to Digital Product Merchants

One of the only concerns I had in dealing with DigiResults was that I would be in charge of granting refunds (DigiResults themselves will issue the refund to the customer if you give them the greenlight to do so) to any customers who are dissatisfied with the quality of my product. That means more freedom but more work for me as I had to play judge with every new requested refund.Paypal's Return Policy

Paypal’s Return Policy

I mention this because I recently came across something interesting which relates to any digital product merchants (like me) who use an affiliate network like DigiResults or any instance where Paypal is involved for transferring money in part; something which all merchants should be aware of. I’m referring to Paypal’s dispute policy as it pertains to digital products.paypal's return policy

In their “what items are not covered under buyer protection section”, they make it clear that “there are some payments that we do not cover including… most intangible items”. Intangible items refers to a number of things which includes digital products and services.

What this means is that you (the merchant) are not liable or obligated to offer a refund on your digital product because digital products are not covered by Paypal’s refund policy.

This also means that disreputable merchants could use this in their favor to give disgruntled customers the cold shoulder time and time again without repercussion.

This is just something for you to be aware of. That being said, the best thing to do is to establish a return policy (see my return policy example) which you can mention on your sales page to help encourage sales and stick to and follow it by the letter through all complaints whether that means approving or denying a refund.

And remember that while you’re not liable or obligated to grant refunds in that scenario, people can still write nasty and discrediting things about you and your product online which can have an adverse affect on future sales/customers, so it’s just something to keep in mind that it’s in your best interest to again be as fair and just as possible when it comes to refunds.

Lastly, remember that the one caveat of this is that the customer can still file a credit card dispute if they used that card for the purchase. These disputes can be investigated like any other, and if you have evidence that the customer broke the terms of your refund policy (hence having your refund policy written specifically in a special section), then the customer won’t have a leg to stand on, let alone a case against you.

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