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Filing a dispute/claim with PayPal for an eBay auction.

Buyers can file a claim with eBay by going to the closed auction while signed into the eBay site and clicking on the "report the item as not received" link in the page header.  If your payment was made through PayPal, the filing process will carry you over to the PayPal site, there's no need to file in 2 places.

Claims can also be filed from this link

The first stage of the dispute process is a 20 day communication forum between the buyer and seller.  If a buyer is not satisfied with the communication stage, the buyer can escalate the dispute to a claim at any time.  The seller can escalate the dispute to a claim at any time as well.  If the buyer doesn't escalate the dispute to a claim within the 20 days allotted, the dispute is closed forever and the buyer cannot reopen the dispute/claim.  Buyers should be aware that sellers CAN refund a buyer in the dispute/claim process without the buyer having to close the dispute/claim, do NOT let a seller convince you to close it. 

PayPal will only freeze the funds in the seller's account if it's over $100.00 so it's important that buyers select sellers wisely by checking feedback left and received by the seller, recognizing the red flags to a fraudulent transaction like posted here and looking for the PayPal Buyer Protection in the auction for up to $1000 coverage, see icon here.

In the event that the auction is removed from the eBay site and you have received an email from eBay stating this with information saying you should not send payment, you need to file a claim right away.  You can file a claim like this:

PayPal.com > Login > Security Center > Item Not Received

Make sure you escalate the dispute to a claim immediately. 

If the claim is found in the buyer's favor-

If the auction doesn't qualify for the PayPal Buyer Protection and the amount of the claim is not in the seller's account then it's up to the seller to do the right thing and refund.  If the seller does not refund and the account is empty then PayPal refers the claim to the eBay Standard Protection Program also called the SP3.  See here.  If a buyer is refunded using the eBay Standard Protection Program there is a $25.00 USD processing fee for eBay to refund the buyer.

If the auction does qualify for the PayPal Buyer Protection for up to $1000 coverage, there are some requirements that the buyer has to have met to qualify for the refund.

1. File the dispute via the PayPal Online Dispute Resolution process within 45 days of the date of the payment, and then escalate the dispute into a claim.
2. Send a single PayPal payment for the full price of the item to the PayPal account specified by the seller in the listing. If the buyer sends payment to a different PayPal account, even at the seller's request, the transaction will not be covered by PayPal Buyer Protection.
3. Associate the PayPal payment with the eBay listing. For example, when paying through the Send Money tab, the buyer must select "eBay Item" as the payment type and must enter the correct Item Number before making the payment.  ***Be aware of sellers that say "For credit card payments pay this account, for eChecks & instant transfers, pay this account" buyers will lose PayPal Buyer Protection by paying this way***

To be sure you meet the above requirements, PayPal suggests paying via the gray "Pay Now" button on the closed eBay listing.

This policy applies only to the sale of tangible, physical goods.

The above information is from this link.

Once PayPal has closed the claim in the buyers favor, the buyer is free to file a chargeback dispute with their credit card company.  If the buyer used a debit card for the purchase through PayPal and the card has the Mastercard or Visa card logo, the buyer may have chargeback rights, the buyer needs to contact their issuing bank for more information.  Buyers must wait until PayPal/eBay closes the the claim before filing with their credit/debit card company, PayPal can and has closed PayPal accounts for this, from the User Agreement:

iv. Consistent failure to pursue the Buyer Complaint Process described below before pursuing any alternate reversal process provided by the buyer's issuing bank.  Policy is here.

If a buyer feels as though they will miss the deadline in filing the credit/debit card chargeback by waiting for the investigation to be closed by PayPal/eBay, buyers are protected.

If PayPal resolves a claim in the buyer’s favor but the buyer does not receive a full recovery of their payment, and if the time for processing of the claim results in the buyer’s loss of credit card chargeback rights, then PayPal will provide a full recovery to the buyer.

Section 5 here.

It is strongly suggested that buyers purchase from sellers that have the PayPal Buyer Protection in the auctions, especially if the buyer doesn't have a credit or debit card for chargeback rights.

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