A long list of transaction types are not covered by PayPal's Purchase Protection, including friends and family payments, NFTs, donations, gift cards, vehicles, real estate, and items bought for resale.
This analysis describes what PayPal's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The breadth of exclusions means a significant portion of transactions conducted through PayPal are not eligible for Purchase Protection coverage, and consumers who are unaware of these exclusions may believe they are protected when they are not.
Exclusions expanded to include NFTs, gambling/gaming activities, and donations while removing references to business purchases and industrial machinery.
View full change record →Consumers who pay using PayPal's friends and family feature, purchase gift cards, donate through crowdfunding platforms, or buy NFTs receive no Purchase Protection coverage, and any disputes related to these transaction types must be resolved outside this program.
How other platforms handle this
If you believe an error has occurred in connection with a transfer or that a transfer was made without your authorization, you must contact us as soon as possible. You have 60 days from the date we send you a statement or notification of the transfer to report the error or unauthorized transaction. ...
You and Teachable agree to resolve any disputes through final and binding arbitration, except as set forth under Exceptions to Agreement to Arbitrate below. You also agree that disputes will only be resolved on an individual basis and not as a class, consolidated, or representative action.
Notwithstanding any statute or law to the contrary, any claim or cause of action arising out of or related to your use of our Services or this User Agreement must be filed within two (2) years after such claim or cause of action arose, or will be forever barred.
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"The following items or transactions are not eligible for PayPal's Purchase Protection program: Real estate, including residential property. Vehicles, including, but not limited to, motor vehicles, motorcycles, recreational vehicles, aircraft, and boats, except for personally portable light vehicles used for recreational purposes like bicycles and wheeled hoverboards. Non-fungible tokens (NFTs). Gambling, gaming, and/or any other activities with an entry fee and a prize. Donations, including payments on crowdfunding platforms as well as payments made on crowdlending platforms. Personal Payments including payments sent using PayPal's friends and family functionality. Items intended for resale, including single item transactions or transactions that include multiple items.— Excerpt from PayPal's PayPal Buyer and Seller Protection
REGULATORY LANDSCAPE: The exclusion of specific transaction categories may interact with FTC regulations on disclosure of material limitations in advertised consumer protection programs. The exclusion of crowdfunding and crowdlending payments may engage state securities and money transmission regulations depending on the nature of the platform involved. CFPB oversight of payment services is relevant to the extent excluded transactions involve electronic fund transfers. GOVERNANCE EXPOSURE: Medium. The exclusion of friends and family payments is a well-known feature of PayPal's program, but the breadth of exclusions, including NFTs, items intended for resale, and single-item transactions that may be purchased for resale, may not be clearly communicated at the point of payment, creating potential consumer protection exposure. JURISDICTION FLAGS: State consumer protection laws in California and New York may impose disclosure obligations on payment platforms regarding material limitations in consumer protection programs. The exclusion of NFTs may engage state or federal regulatory discussions regarding the classification and consumer protection implications of digital assets. CONTRACT AND VENDOR IMPLICATIONS: Merchants and marketplace operators that direct buyers to use PayPal friends and family payments should be aware this eliminates Purchase Protection coverage, which may create reputational and legal risk if consumers suffer losses on such transactions. COMPLIANCE CONSIDERATIONS: Compliance teams should assess whether consumer-facing disclosures at the point of payment selection adequately communicate the exclusion of friends and family transactions and other high-risk exclusion categories. Particular attention should be given to disclosures for transactions involving NFTs, crowdfunding payments, and items potentially bought for resale.
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The breadth of exclusions means a significant portion of transactions conducted through PayPal are not eligible for Purchase Protection coverage, and consumers who are unaware of these exclusions may believe they are protected when they are not.
Consumers who pay using PayPal's friends and family feature, purchase gift cards, donate through crowdfunding platforms, or buy NFTs receive no Purchase Protection coverage, and any disputes related to these transaction types must be resolved outside this program.
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