PayPal makes good on the purchase of fake goods

Steven wrote to the Gripe Line several months ago asking for help resolving a dispute over an online purchase he’d made: “I purchased a Rado True Active watch from Online Global Mart. I paid for it with PayPal. The watch was advertised as being authentic.”

Steven paid the price advertised by the merchant: $300. At the official Rado site, this watch sells for $1,150 — and the FAQ at the site states clearly that buying Rado watches online is risky. That’s a red flag when it comes to counterfeit products: a price that’s too good to be true.

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“It arrived while I was out of town,” he reports. “When I returned, I opened the box to find a crudely labeled watch box with the words Rado on it. This is no Rado watch! It is a poorly made counterfeit. I immediately contacted the seller with my complaint — never to hear from him again.”

Steven immediately contacted both PayPal and Discover, the credit card linked to Steven’s PayPal account, complaining that the seller knowingly sold him a counterfeit watch while claiming it was authentic. Discover immediately issued a temporary credit.

Later, says Steven, “I received a letter from Discover informing me that it had revoked the temporary credit because the dealer had completed their part of the bargain.” He called Discover to find out how that could be true — the watch was a fake. “The issue was a simple one,” he reports. “I still had the watch.”

Steven wanted to return it but could not find an address on the seller’s website nor get the company to respond to his requests to return it; if the company accepted a return, he wouldn’t have needed the help of his credit card company or PayPal. He contacted PayPal and was told the dealer had provided evidence that it had completed the transaction, which was, of course, true. “But when I informed the customer service person that my complaint was regarding fraud,” says Steven, “I was told to contact IC3 since PayPal could not do anything about it.”

Steven was dismayed. “Aren’t organizations such as PayPal and Discover supposed to protect us from fraud?” he asks. “To me, this seems like implicit approval of counterfeit products and their sale.”

Based on my viewing of the ad for this watch on the site and in the documentation Steven provided, it appears that this merchant claims this watch is authentic. But when I contacted the seller, I was informed, “We told Steven a lot of time before order that the watch you order is replica A+ quality.” The vendor also insists it would have accepted the return within seven days, but Steven missed that date. “He claimed for return after one month,” a spokesperson told me. “So in this case we can’t accept the return.”

Many sites that sell counterfeit Rado watches and other fakes make it clear that you are getting a watch “inspired” by the real thing. They often have site names like Hotreplica.com to further clarify that you are not buying the real deal.

The PayPal user agreement seemed to me to offer protection against goods that aren’t what they claim to be, and PayPal told me it does not tolerate the sale of counterfeit merchandise either on or off eBay.

“PayPal takes instances of fraud very seriously,” a spokesperson told me. “We always review seller accounts when we receive buyer complaints and take appropriate action to ensure that both the buyer and seller community are protected.”

For several weeks, Steven, PayPal, and I exchanged emails. With the return of his $300 seeming to take forever, Steven became increasingly disenchanted with the consumer protection offered by his payment methods. He even contacted a lawyer who, naturally, suggested he sue.

“This is turning out to be an expensive lesson,” he wrote, sure that knowledge was the only thing he would be able to get out of this transaction. He also cancelled his Discover card because of the company’s refusal to help him with this transaction.

But PayPal and I kept at it, and three months later, I received this comment from PayPal: “PayPal refunded Mr. Melnyk following review of the transaction.”

Why did it take so long?

“PayPal typically needs to wait until the card issuer has made a decision on the transaction before reviewing the case,” came the reply.

Steven is now very pleased — and surprised — by PayPal’s willingness to step up and do the right thing by a longtime customer.

Got gripes? Send them to christina_tynan-wood@infoworld.com.

This story, “PayPal makes good on the purchase of fake goods,” was originally published at InfoWorld.com. Read more of Christina Tynan-Wood’s Gripe Line blog at InfoWorld.com.