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Author Topic: How to sell Bitcoins on PayPal and not get scammed.  (Read 3560 times)
MertinTerm
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June 24, 2011, 12:45:22 AM
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First, I apologize for my English. It isn't the best. I have only been speaking it for 2 and a half years now, so bear with me. If someone with perfect English could re-write this, I'd be very thankful.

How to sell Bitcoins on PayPal and not get scammed

As many of you are familiar with by now, selling Bitcoins on PayPal is not smart. Once you send the Bitcoins, all the buyer has to do is dispute the transaction, and you will lose out on your Bitcoins AND the money they paid you.

Well, there is a way to prevent this.

PayPal has always had ill-will out towards digital transactions. They prefer sellers dealing with actual physical items that can be tracked. So, rather then selling off a digital item such as a bitcoin, lets sell off something physical.

Bitcoin certificates.

If you print out a Bitcoin certificate, it is now a physical item. It can be shipped, and it can be tracked, unlike an actual Bitcoin. Sadly, a Bitcoin certificate isn't a bitcoin. It is a worthless item with no value. So... why not sell that along with our actual digital bitcoins?

If you have a buyer that wants to purchase some bitcoins from you via PayPal, follow these guidelines:

1. If you are selling through eBay or an online store, make sure the title is for a bitcoin CERTIFICATE. It is very important that they know the purchase is for the certificate. If they are doing a direct payment through PayPal, make sure they state in the notes that it is for a bitcoin certificate.

2. Describe that along with a certificate in the mail, they will be receiving an actual bitcoin. They will be getting both.

3. Print out your bitcoins, and ship them off to the buyers address. Make sure to ship it with a service that has tracking. THIS IS VERY IMPORTANT. If a buyer tries to scam you and get their money back, you will have proof that a certificate has been sent. Don't just do normal postage mail, a tracking number is needed.

4. After enough time has passed for your parcel to go out and the tracking number to generate (usually about 24 hours), send off the digital bitcoin. Make sure the buyer knows that the digital bitcoins won't come immediately. You need enough time to know your certificates are being shipped and the tracking number is generated.

If you follow these steps, you will have a foolproof way to sell your bitcoins with PayPal.

A tip, if a buyer tries to get you to not send the certificate, ignore it. The certificates must go out whether they want it or not. You NEED to have proof that a shipment has gone out.

Soon, I will update this post with some designs that you could use for your worthless bitcoin certificates.

I hope this helps you all out. :-)

Once again, if someone would very good English could re-write this, I'd be very thankful.

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dodgrr
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June 24, 2011, 12:47:21 AM
 #2

is there anything that would protect against the seller from sending the cert, but not the credit?  They'd be in the clear as far as paypal was concerned because the cert would have been delivered Huh

MertinTerm
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June 24, 2011, 12:51:51 AM
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is there anything that would protect against the seller from sending the cert, but not the credit?  They'd be in the clear as far as paypal was concerned because the cert would have been delivered Huh

It would be a case of the buyer needing to trust the seller (IE, the seller has feedback and rep).
nhodges
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June 24, 2011, 12:52:48 AM
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is there anything that would protect against the seller from sending the cert, but not the credit?  They'd be in the clear as far as paypal was concerned because the cert would have been delivered Huh

You can print out a wallet with a specified amount (a la http://forum.bitcoin.org/index.php?topic=20917.0 or http://forum.bitcoin.org/?topic=3716.0) and say the sale is for the redeemable bill. You will be able to prove with blockexplorer when this bill is consumed.

dodgrr
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June 24, 2011, 12:53:22 AM
 #5

yes, it's always a case of the buyer needing to trust the seller..  Wink

MertinTerm
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June 24, 2011, 12:55:03 AM
 #6

yes, it's always a case of the buyer needing to trust the seller..  Wink

Until now, with PayPal, it was a case of the seller needing to trust the buyer. Now, the seller has security finally.

And nhodges, that is a great idea.
dodgrr
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June 24, 2011, 01:20:22 AM
 #7

Yeah, thats the point.  Buyer: sell me some bitcoins! Seller: ok, plus you get a free cert! Send the payment to this paypal address... Buyer: sent! Seller: ok, your certs in the mail! Buyer: what about my bitcoins? Seller: what bitcoins? Paypal sides with seller who provides proof of shipment.

beyond
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June 24, 2011, 01:21:41 AM
 #8

just go use virwox, you have to trade it through sll but otherwise much easier than all this!

I've exchanged about 350$ through there, since I am not in the states and cant use dwolla, and didnt want to pay the fees to do bank transfers in/out of gox (which was a good thing when they got hacked lol)
JoelKatz
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June 24, 2011, 01:33:32 AM
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Yeah, thats the point.  Buyer: sell me some bitcoins! Seller: ok, plus you get a free cert! Send the payment to this paypal address... Buyer: sent! Seller: ok, your certs in the mail! Buyer: what about my bitcoins? Seller: what bitcoins? Paypal sides with seller who provides proof of shipment.
Will Paypal really side with the seller if the buyer claims the item wasn't as described and he shipped the certificate back?

I am an employee of Ripple.
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dodgrr
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June 24, 2011, 01:41:57 AM
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Not if the seller proves the description accurately described the product delivered..  I'm not sure if there's a "set in stone" rule set, as I've seen paypal decide stuff based on who knows what.  Who's gonna step up and form "bitpal??" Wink

beyond
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June 24, 2011, 01:52:32 AM
 #11

Thats what I was saying, the virwox exchange allows you to buy and sell bitcoins through paypal.  However to skirt the rules they require you to first trade your usd or btc into second life currency, then into the other currency.  Its a two step trade instead of one, but it works very well.

If you try and trade btc directly your going to have issues with paypal.
Shuffle
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June 24, 2011, 02:18:00 AM
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one problem with this, when you mention bitcoins on paypal they freeze your account, a buyer of mine mentioned bitcoins and my account was frozen the day after.  To get it unfrozen they are asking for what im selling and ifi have a license to sell in canada.
nhodges
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June 24, 2011, 02:26:56 AM
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"a well known cryptocurrency"

Delicious
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June 24, 2011, 04:45:21 AM
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Yes, this should work.  I had a similar idea in the sense of something like yoville, farmville, etc. set up so you can purchase digital items(house furniture, whatever) and get "free" bitcoins with them.  Where the items would actually be priced at BTC value (1, 5, 10, etc).  Max of 10 items in playhouse so one's house doesn't fill up with 1btc lamps. Wink  All you have to do is sell an actual product along with them (since BTC not considered a product)

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virtualfaqs
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June 24, 2011, 06:34:43 AM
 #15


As many of you are familiar with by now, selling Bitcoins on PayPal is not smart. Once you send the Bitcoins, all the buyer has to do is dispute the transaction, and you will lose out on your Bitcoins AND the money they paid you.



This is where the problem lies. What we're talking about is trust here and most people aren't establishing that before sending their BTC.

Here's one way to stop 99.99% of PayPal scammers:

Ask for a $1 payment to receive a confirmed shipping address and phone number. Afterwards ask for PayPal Mass Pay funded by a Money Pak. Send a consent email asking the buyer to acknowledge payment was authorized. Ask for screen shots of the Money Pak. Check Email headers to make sure consent form is sent from the same email. Next check if phone number matches address. Get IP address and check if it matches with address. Ask the buyer to open up a dispute and close it. Then do a Google background check to make sure nothing else out of the ordinary.

And if you have no idea what I just said then you probably shouldn't be accepting PayPal at all.

Mailing something on eBay doesn't work. It works against amateurs, but not against real scammers who know the system better than you.

They can refuse your shipment after you sent the BTC to their client. And if you wait until after the shipment arrives, then no one's going to buy from you because they want virtual items delivered quickly. After shipment a credit card chargebacks would still stop you cold. The issuing bank does not care or know what's going on about BTC and there's no real proof you can submit that the issuing bank will buy.

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Alex Beckenham
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June 26, 2011, 04:08:56 AM
 #16

So far Mertin is 24+ hours late in sending the digital coins... I wonder if the 'certificates' have been sent...

If you've just gone for a weekend fishing trip, it might be good to let buyers know that you're unavailable on weekends.

Sukrim
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June 26, 2011, 01:15:15 PM
 #17

You can print out a wallet with a specified amount (a la http://forum.bitcoin.org/index.php?topic=20917.0 or http://forum.bitcoin.org/?topic=3716.0) and say the sale is for the redeemable bill. You will be able to prove with blockexplorer when this bill is consumed.
What stops me as a Bitcoin seller from keeping a backup copy of that wallet? Roll Eyes

Also as it has been pointed out, if you sell a certificate, gift card or whatever, then that's what the other person pays for. Not bitcoins.

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JoelKatz
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June 29, 2011, 08:32:54 AM
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Not if the seller proves the description accurately described the product delivered..
So we're right back to where we started. The buyer says the product wasn't as described because he didn't get the promised BitCoins, he only got the certificate. If you say the buyer gets both a certificate and BitCoins, and the buyer says he only got the certificate and sent it back, then he's saying the product wasn't as described. So you're back to having to prove to PayPal that he got the BitCoins.

I am an employee of Ripple.
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Alex Beckenham
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June 29, 2011, 10:15:54 AM
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Mertin has pretty much disappeared anyway... he hasn't responded to me or another buyer since last Friday.

He should at least come back and rename the thread "How to scam people when selling Bitcoins on Paypal".

virtualfaqs
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June 29, 2011, 10:48:02 PM
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Not if the seller proves the description accurately described the product delivered..
So we're right back to where we started. The buyer says the product wasn't as described because he didn't get the promised BitCoins, he only got the certificate. If you say the buyer gets both a certificate and BitCoins, and the buyer says he only got the certificate and sent it back, then he's saying the product wasn't as described. So you're back to having to prove to PayPal that he got the BitCoins.

Actually this would work for PayPal. I believe PayPal doesn't get involved with SNAD disputes and asks you to resolve it between the buyer and seller. However it wouldn't work for a credit card chargeback.

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