PayPal PayPal Nullifies Contracts Between Sellers and Buyers

On 7/21/2020, a Client of ours filed for a refund with PayPal (PP) for a $416.80, which $416.80 PP immediately removed from our PP account. The $416.80 was a NON-REFUNDABLE down payment by the Client for a unique, customized handmade device we made for the Client thru our company, Lone Star Consulting, Inc. (LSCI), relevant to locating electronic harassment transmitters. We filed fast our fast dispute with PP. PP states on its site that these types of disputes are normally resolved in 5 days. Now, 60 days have expired and PP still has not returned our money.

When we filed our dispute with PP about this chargeback, we provided PP detailed contract information to prove that the Client was NOT entitled to any refund. However, PP assumes it can nullify contracts between buyer and seller just on any whim, regardless of what type of item was sold or the provisions of the contract. But we suspect that the real purpose for PP to take ultra-long periods to resolve complaints or to never resolve them is to float or outright steal the withheld money. To do that, we believe that PP engages in fraud, fiduciary malpractice, third-party interference into legally-binding contracts, and unfair business practices. In short, clearly PP stole our money.

Lone Star Consulting, Inc. creates unique and customized electronic and mechanical devices, based on the specifications the Client specifies in our Customized Devices Application Form (CDAF) contract. Our customized devices are not available from any other source. The CDAF requires that the applicant Client fully and unconditionally agrees to the provisions of our www.lonestarconsultinginc.com/policies.htm webpage. These policies state the following, which PP nullified:
.   (1) The required 1/3rd down payment ($416.80 in our case, paid for thru PP) is NON REFUNDABLE if we attempt to provide the Client a device. We completed and successfully tested our device, and the Client received our device, so therefore, the down payment is not refundable. On this alone, PP had no right to honor the Client's complaint.
.   (2) Because our devices are unique and customized handmade by our professional staff in the U.S.A., they are much more costly for us to make than mass-produced devices using low-paid factory workers, AND our unique devices cannot be resold if returned, is why we require on our policies.htm webpage that if the Client finds a defect or omission that occurred at our end, the Client must provide us a reasonable opportunity to repair or replace the defect or omission. The Client did not take this required step. Even if the damage is not our fault, we usually repair/replace the device anyway for free because many of our Clients buy additional devices from us.
.   (3) On our policies.htm webpage, the Client fully agrees to not reverse any charges without first giving us a fair chance to repair or replace the device. PP enabled the Client to also breach this contract provision.
.   (4) The device has not even been returned to us! Much less returned to us with the Return ID# we require for safety and security reasons to make sure that the package is one expected by us. PP claims that the Client provided PP a Tracking #, but in the U.S., one can reserve a Tracking # without actually physically shipping the package.
.   (5) Against our policies about not paying us thru PP (because PP has very serious security issues), the Client paid the $416.80 thru PP. We finally relented on accepting the PP payment, because the Client needed the device right away and we did not want to delay any longer, and because hassling Clients is seldom a good thing.
.   (6) We shipped her device in excellent working condition. We tested it here and it was fully functional. The Client is located in Italy, and complained that her package was being held up in France, which means that French Customs likely damaged the device by rough handling and/or powerful X-Rays. We ship FOB our shipping point (one of our policies.htm policies), and are not responsible for damages and losses which occur enroute or at the Client's end.

If PP is permitted to arbitrarily, capriciously and for its own profit nullify business contracts, then how can businesses paid thru PP even have contracts with their Clients to begin with? A business owner would be clinically insane to allow purchases thru PP, because crooked buyers can easily rip it off. This is a gross interference and disruption of businesses, and PP is an existential threat to the free enterprise system. There are vast differences in what businesses require to successfully function, make a profit, and provide their quality products and services to the public, so a one-size-fits-all PP refund policy cannot possibly be fair and reasonable to all business types. And PP policies can change on a dime, without prior notice to or permission from PP users.

PP policies may work fine for someone selling cheap items that can be restocked and resold with little loss if a product is returned, but because our devices are all unique, custom made and costly, if refunded without reasonable justification and a chance for us to repair or replace, is a large loss to custom shops like us. Therefore, it is a very reasonable contract provision for us to require that the Client first give us a fair chance to repair or replace the device, which this Client did not do, before demanding any kind of a refund, and to require receipt of the returned item if a return later becomes justified.

Regardless of what PP claims, PP has the fiduciary duty to its business users to responsibly, fairly, reasonably and timely handle transactions of ours thru PP.

We complained to PP several times about both their unjustified ripping us off of $416.80 from our PP account and the endless amount of time it was taking to resolve our case. PP refused to justify the former, or give us an end date for the latter. It is difficult and some times impossible to communicate with PP. PP responses are often computer-generated BS that solves nothing - meanwhile, its officers live high and YOU are paying for it.

John Williams, CEO, Lone Star Consulting, Inc.