If you are paying for anything online with PayPal, think before you buy or it could end up costing you. This is because PayPal offer no protection to customers buying intangibles, services and other items.
THOUGHT YOU WERE PROTECTED with PayPal? Well you are not for a whole range of purchases. This may come as a surprise to most people because it is generally believed that paying online transactions using PayPal is much safer. After all, PayPal's primary justification for using its payment services is that "It's safer!"
In reality, however, you can often be safer paying with a credit card directly because, if you read the fine print in the PayPal User Agreement, you will see that PayPal offers NO buyer protection for a whole range of items including services, intangibles, cars, tickets, etc.:
13.4 What items are not covered by PayPal's Protection for buyers
PayPal's protection for buyers only applies to payments for certain tangible, physical goods. Payments for: intangibles, services, real estate, businesses, vehicles (including, without limitation, motor vehicles, motorcycles, caravans, aircraft and boats), custom made items, airline flight tickets, eBay classified advertisements, items prohibited under our Acceptable Use Policy or licences and other access to digital content are not eligible under PayPal’s protections for buyers. Please also note that "Significantly Not as Described" Claims which are associated with a purchase of an item outside of eBay are not eligible for re-imbursement under PayPal's protections for buyers unless the purchase was funded via your PayPal Account with PayPal Credit. Please also note that personal transaction payments are not eligible for re-imbursement under any of PayPal's protection for buyers.
[Quoted 20 May 2010 from the Paypal.com website]
This means that if you buy a service using PayPal and you don't get it (and can even prove you really didn't get what you paid for), don't think you can just go running to PayPal and they will sort out a refund for you. If you do, all you are likely to get is a "broken-record" service representative informing you that there is "no protection for services and intangibles".
So whatever you do, do not use PayPal unless you are sure that what you are paying for will be covered by their Protection for Buyers policy. Otherwise, use Google checkout if you want a checkout service (their policy seems more protective but check it yourself here before using their service).
We feel it is dishonest of PayPal to bang on about safety being a primary reason to use their service when, in their terms and conditions (which quite frankly few read), they quietly absolve themselves from any responsibility when dealing with a large range of purchases.
You have been warned!