I’ve used Escrow.com a number of times and I’ve been quite happy with the process. They don’t have a minimum charge and their fees are comparable. They do allow paypal and credit card as well as bank wires for most transactions (less than $5k I think?). They don’t take possession of the domain but will not release funds to the seller until the transfer is successful. Of course, I’ve had good buyers/sellers so I’ve not had any issues that would require any resolution procedures through Escrow.com, but I’ve felt more comfortable using them for large transactions and that’s what counts. I agree, anything over about $500 is my limit for straight paypal payments.
Thanks for the post!

Great article Chef, thanks for doing some proactive dirty work with PayPal! I have used PayPal for about 40 domain transactions and have had no issues, but I attribute that largely to using common sense when using the service. I have sold a domain for $750 using PayPal, but that was a repeat customer that I often talk with on the phone.

I always take screenshots and file push/transfer confirmations just in case something comes up – not sure if these would help in the event of a dispute.

Keep up the great writing!

Cole

Unfortunately this has become a growing issue. Many people rely on Paypal because of its convenience and widely accepted use across many industries. Because we are in the domain industry, we are not entitled to some of Paypal’s normal protection because of how they classify domain names. Regardless of how we think domain names should be classified, PayPal has decided they are “intangible” property as Chef stated.

As domainers, our best protection in using PayPal is to only do business with someone you trust 100%. Another step is to secure a signed written contract prior to transferring any money.

Ultimately, as Chef suggested, the best solution is to avoid PayPal entirely. Bank wire or an escrow service is a much safer way to go.

This is one of those things you try on chance and hope you do not get screwed. Which lucky I have not yet.

I’ve purchased a domain at $500 using PayPal and got burned, so I prefer a lower cap of $200-$300 per transaction for purchasing a name and the same standard when selling. Escrow.com make take some time to complete transaction but it’s very safe for larger sales and purchases.

-Dan

same goes for programming. I am trying to get refunded from a “programmer” that promised a 7-14 day turnaround. 5 months later paypal said it’s past the 45 day term and the “programmer” keeps coming up with new excuses. buyer beware.

I pay via credit card and and usually gets refund if there is a problem.

IF the total transaction is $1k and more, I ask for 30% via paypal and the rest on money order.

This is precisely why trust, transparency and accountability are such important factors when doing business with other individuals and companies online.

Domain sellers that don’t have a facebook page, a blog, credible whois info or some type of verifiable online identity, simply don’t get money from me. I require wires for any sales over $300 and I’ve Never been burned on PayPal. Escrot is good, but I’ve never needed to use it. Primarily because most buyers and sellers that I deal with understand the value of their reputation and how quick it can be burnt to ashes if they tried to pull something shady. The domain industry is one big echo chamber.

By the way, am I the only one that uses domain sales agreements? There’s certainly something about the power of a person’s real signature that tends to make the deal feel much more legitimate and secure.

Interesting post Patrick.

It’s unfortunate that over the years Paypal has become more of a nuisance to it’s members than anything else.

Regardless of what you’re selling, you MUST take every additional step necessary in order to prevent yourself from being scammed.

You know they’re bad when you sell an item and you think to yourself, “Please don’t pay with paypal, anything but paypal.”

I honestly prefer a personal check, money order, heck even an IOU is better than paypal.

Why do I say this?

Let’s just say that I have some experience with Paypal. I too have contacted their “Customer Support” a few times and can honestly say that it’s hit or miss with them. Some are knowledgeable and others…well…no comment.

I buy and sell domains.

Here are a few pointers:

When buying domains:

Research the seller.
Research the domain.
Inquire about additional payment methods.
Use an escrow service if possible.

When selling domains:

Thoroughly research the potential buyer.
If buyer pays with paypal, wait a few days to transfer the domain.
Don’t let them pressure you into transferring as soon as possible. If they want it bad enough, they’ll wait.

Use an escrow service if the amount is over $200.
Take screen shots of EVERY SINGLE STEP of the transfer process and save them in a folder.

There are 2 reasons for doing this:

1. It may help you if there is a dispute with Paypal.
2. It may help your registrar get the domain back into your account.

Remember this very important thing about Paypal.

There is a 6 month window of opportunity for scammers to take advantage of you.

This means anyone can dispute any/all transactions within 6 months of transaction date.

It has not happened to me, but I have heard stories of people getting reversals 22-23 weeks after they completed a transaction and didn’t even know about it until the bank called them to let them know they were in very serious overdraft.

This is why I prefer check/money order/escrow. You don’t have to keep monitoring it for fear of losing your hard earned money.