"Friends and Family" use among hobbyists buying and selling - is it proper?

[fearlessBuffalo]

Okay PayPal forum, I’d like you to settle a question about the proper use of Friends and Family. 

I belong to a certain forum in a certain hobby, let’s say “Beanie Babies.”  When people on that forum are selling Beanie Babies, they often will request that payment be made as “Friends and Family.”  Personally, I think they are stretching the definition of “friends” since we never meet in person or talk by the phone, etc..  But I think a reasonable argument can be made that since we share a common interest and interact quite a bit on this forum (and sometimes “in person” friendships do result), that these people who share a common interest can be considered as being “friends.” 

I went so far as to use the words “fraudulent” and “stealing” to describe the use of “friends and family” for payment through this forum, but in retrospect I regret using such language.  However, I cannot find enough clarity in your FAQs about whether or not this is actually appropriate usage.  Can you tell me if the usage I’ve described is acceptable under “Friends and Family?”

THANKS!

[minty1]

Hi fearlessBuffalo

It should be a premier acc or business acc to sell items

This way payments can be disputed if there are problems

Family/friends payments shouldnt be used for selling as payments cant be disputed if there are problems

If ppal think they are selling on a regular basis they will ask them to upgrade their acc

https://www.paypal.com/selfhelp/article/FAQ2347/1

[fearlessBuffalo]

Thanks for your reply, Minty1!

The advantage buyers have of disputing if there are problems doesn't seem to deter buyers or sellers in my hobby.  Both seem willing to accept the risk, especially since there is a feedback forum if a deal goes bad.  F&F seems to be an accepted norm there.  

A few points...

"If ppal thinks they are selling on a regular basis...." Define "regular."  If PayPal does not define it, it's a gray area that will be exploited by people who with to avoid PayPal fees.

Then there is this point, in the PayPal Personal account:

• PayPal account types - Personal account

If you just need to make purchases and send money to family and friends, a Personal account is probably for you.

You can use a Personal account to:

• Repay a friend for your share of lunch.
• Send money as a gift.
• Buy a book online.

When I see "Buy a book online," I don't think they are referring to eBay.  But my best guess - since it is unclear - is that PayPal means buying a book on some sort of online forum for book-lovers.  And that is very similar to my situation with my hobby.  So based on what I've heard so far, it is sounding to me like F&F *is* acceptable.

For what it is worth, I don't think anyone in my hobby forum is making a living - even a part-time living - selling items there.  We tend to obsessively over-collect things, then "thin the herd" every so often.

Do you agree with my assessment, or disagree?  Need more info?

[minty1]

I cant define regular as I dont work for ppal so dont know how they work that way

It seems that  people are happy paying F/F payments for the hobby u are in as u share the same interest so if u are happy with that carry on

At the end of the day its up to the individual how they want to pay as long as they know the consequences of disputing F/F payments, because yes F/F payments are exploited

[PayPal_Frank · Accepted solution]

Hi fearlessBuffalo and minty1,

This is an important topic so I wanted to chime in to make sure we avoid any problems for customers using this feature. 🙂

I must echo minty1 on this.  The friends and family option is designed to only be used for friends and family.  Meaning people you trust.  Maybe you're sending a gift or need to pay someone back for lunch the other day.  Things like that. I do not recommend using it for payment of any goods or services for the following reasons:

• There is no buyer/purchase protection for these payments.  PayPal is assuming that both parties trust each other.  If a buyer has a problem with a personal payment, they may not be able to get a refund.
• There is no seller protection for these payments.  Many sellers may think that because there is no buyer protection, they don't have worry about the risk of reversals on these payments.  Unfortunately if you are using them to sell a good or service, it is still possible for someone to use a stolen PayPal account, card or bank to make the payment.  If that happens, the payment would be reversed and there is no protection for the seller.  We recommend following all requirements for Seller Protection.  One requirement is to not use personal payments.
• Receiving personal payments is also not a guarantee to avoid a fee.  If the sender is in a different country from the recipient or they choose to fund the payment with a card, there may still be a fee.  So the seller may still pay a fee but without any seller protection.
• Lastly, it is against the PayPal User Agreement to accept personal payments for the sale of goods and services.  The ability to receive personal payments could be disabled if the feature is abused.  That's not something we want to have happen with any customer as they would then completely lose the option. Even for friends and family.

I hope this helps to clarify.

Thanks,

- Frank

[fearlessBuffalo]

Thank you for your reply Frank,

You say: “The friends and family option is designed to only be used for friends and family.  Meaning people you trust.” In the case of this forum in question, people DO trust each other.  If someone was a bad seller, if would become known quickly and that person would be banned.  I’ve never heard anyone be concerned there about the lack of protection when they use F&F. 

I think the struggle I’m having here is all about semantics.  Defining “friends and family,” for example.  “People you trust” is not sufficient by itself – it if were, then the users of this forum would qualify.

However, your last point is, in my opinion, overwhelmingly the relevant issue: “Lastly, it is against the PayPal User Agreement to accept personal payments for the sale of goods and services.”  When I visit that link, 4.1 seems to answer the question clearly (though unfortunately it does not specifically mention “Friends and Family”):” 4.1 Receiving Personal Payments. If you are selling goods or services, you may not ask the buyer to send you a Personal Payment for the purchase. If you do so, PayPal may remove your ability to accept Personal Payments.”

4.1 does it for me.  I am having a conversation with someone else in this forum who things F&F is acceptable, and I don’t think he will be able to persuade me otherwise in light of 4.1.  If he comes back with arguments I can’t counter, I’ll return to see what you think.  Thanks very much for your help!