Yesterday I told my wife about PayPal poofing. We kicked it around a bit. We were having trouble seeing how they could possibly just poof without hearing the seller's side.

I decided to play lawyer, justifying PayPal. Here's what I came up with:


If someone pays you in cash, and then when you take it to your bank you're told it's counterfeit, the payment just went poof. You were given a payment that you thought was good. It wasn't. Tough.

The analogy with an Instant Payment is pretty good. An Instant Payment is instant, but not any better than cash.


Yes, it's kind of weak. The main reason PP is nice to buyers is that there are lots more of them. It's not worth PP's time and money to referee disputes. A buyer who feels burNed may never return to PP. A seller will grumble about "the cost of doing business" and keep using PP, because the advantages outweigh the disadvantages.

Thanks for reminding me of PayPal poofing policies. The one practical thing I can think of to do is lower my threshold for insisting on an escrow service.

Ned