Paypal "chargeback" dangers if I become and exchanger?

[Desolator]

I know the reason that no exchange wants to touch Paypal is because of "chargebacks."  Well that's the credit card term but same deal.  Here's the problem, and this is a real example:

Use Paypal to buy an in-game virtual item in SRO by Joymax of Yahoo Games Korea.  Claim the item was never delivered.  Paypal sides with you and Joymax has no way of proving they delivered the virtual item, the transaction is reversed and Joymax gets screwed.

Virtual items are generated for free but with electronic currency, you'd be super screwed if people did this.

I want to become a low volume exchanger for people where I can take Paypal payments and send them BTC so people so here's my question for you Paypal experts:

If someone uses a buy it now or add to cart button that's Paypal backed, there's an item description and shipping info tied to it so people can file a claim saying they never got the item it represents.  Requests for money sent from me are often treated as invoices so that could be a problem too.  So would it make me immune to this Paypal chargeback scam if I just simply have the person send me a generic member to member Paypal payment.  If, as far as Paypal is concerned, there was no item or purchase involved in the transaction and it was just one member sending another money, then there's no grounds for a chargeback to be filed.  Is that correct?

[Graet]

Sounds great till you get a couple of unhappy customers (for real or imagined reasons) and they contact paypal with info that you are dealing in BTC, your acct gets locked and/or charegebacks occur. What do you do then?

I think there is a very real reason established exchanges dont use paypal.

I thought one of the ideas of BTC was to replace high fee companies like paypal and make life easier for all of us

[PiGames]

Sounds great till you get a couple of unhappy customers (for real or imagined reasons) and they contact paypal with info that you are dealing in BTC, your acct gets locked and/or charegebacks occur. What do you do then?

I think there is a very real reason established exchanges dont use paypal.

I thought one of the ideas of BTC was to replace high fee companies like paypal and make life easier for all of us

And I personally can't wait for that to happen

[Jered Kenna (TradeHill)]

You're violating their ToS by buying / selling BTC so they can shut you down in a heartbeat. Even if you're not scamming it's going to be really hard to defend yourself when you're doing something that's "against the rules"

That and they're very customer friendly on chargebacks anyways.

Paypal and Bitcoin are like oil and water. It could be a nice gateway if it were non reversible but it's not going to happen any time soon.

Jered

[Ten98]

I think a lot of the "chargebacks" on BTC transactions are from Paypal themselves.

They see Bitcoin as a *significant* threat and will do anything they can to destabilise / discredit it.

[Nagle]

I want to become a low volume exchanger for people where I can take Paypal payments and send them BTC so people...

That's called "smurfing" in the money laundering community.