Protection From Paypal Buyer Scam (Suggestion)?

[Growth & Learn]

Hey all,
Would love some actionable advice on this. So, we process thousands of transactions per year with Paypal as our merchant account/payment processor.

Unfortunately, 1 out of very 6,000 or 7,000 transactions we'll receive notice that a buyer has disputed their purchase with their credit card company. It's always a punch in the gut because we have digital proof that the buyer has both received and used the product.

This happened one other time about 7 months ago and I showed proof again in that situation. A couple weeks later we received word that Paypal sided with the buyer. For the life of me I couldn't figure out why as we had provided proof.

Anyway, fast forward 7 months later. So, this morning and I wake up and see another one of these chargebacks for a new account and go through the same routine as last time. Showing proof, detailing transactions, correspondence with buyer etc.

I go through Paypal's fine print and see they have this listed….

Seller Protection
"Items Not Covered
Items that don't match your description, intangible items like services or digital goods, items that violate our or eBay's policies, and items you sell or deliver in person. All are not covered."


Does anybody have suggestions for how to combat this for the future? We sell digital goods so it looks like we will just automatically lose in this situation which seems very unfair. It doesn't happen that often but none the less I don't like being scammed by buyers. Plus, I have to pay an additional fee every time a buyer requests a chargeback.

 

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[OzzieRob]

You can't fight paypal when they have made a final decision but the buyer must return the goods to you, yes?

Sometimes i have a buyer open an "item not as described" instead of "wrong size/doesn't fit"...they made the mistake as they don't always read the description... so i contact ebay and say the buyer made a mistake and wants to return the goods.

ebay always give me the selling fee refund and i refund the customer when the goods are returned.

I tell the buyer i am going to deduct the postage fee as that is fair. Unless your item is not as described you shouldn't have a problem unless the buyer is not willing to co-operate.

Try to get the buyer to respond. If they are scamming you then you still need to reecive the goods back in Myebays return section.

If still no luck, get the members full details through ebay member request and threaten a law case.

Good luck. It's getting harder on ebay i know as i've been a seller since 2005.

Cheers
Rob

 

[Growth & Learn]

This is a digital product and education content. There are pdf's and files etc. but it's very hard to return education.

 

[OzzieRob]

okay...sorry as digital products and education content is not my expertise. Maybe a member can chime in here with the relevant experience.

 

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[Growth & Learn]

I suppose I could have them return pdf's to us but that would feel a little silly on our parts

 

[OzzieRob]

Not if it invokes a response from the buyer, lol

 

[OzzieRob]

1 out of very 6,000 or 7,000 transactions

Whoah...that's not a bad rate. I get 1 in every 30 transactions and before it was 1 in very 10.
You can't please every buyer but i find the more you describe your items with photos the less likley a buyer is to file a dispute.

 

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[Mattie]

Charge backs have to do with credit cards. I know a lot of people that run into this problem. Basically they say, someone else used their credit card, or the names don't match with transactions and the names they use when buying don't match, they don't want to pay for the item or service so they know how to jack the system and getting away with it. Basically there's nothing you can do, but show them proof of the transaction and take a screen shot of the transaction at the time for evidence and match names to credit card and what they filled out.

Credit card charge backs are hard to fight. And they know that right off the bat. It's just like on KDP people who read my books and return them before seven days so they don't have to pay. People just like to find the loop wholes in buying things and getting it free if it's digital or a service of some kind. So you may even want to put on there no refunds! I know this has helped some people I know in proving the case to paypal, they have a screen shot of the date of the transaction and no refund policy. And if Paypal's nice enough they'll fight it, but it's basically out of your hands. And I'm sure there is sometimes a $20.00 fee or some sort of fee for a charge back isn't there. So yes, this sucks!

 

[Growth & Learn]

I wonder if there's a payment processor or merchant account that is a little more seller friendly? Paypal makes a shit ton of money off of us. So, I'm always surprised they don't go to bat more for us.

The irony of this is that my time gathering all the materials and responding to the claim is worth way more than the amount the buyer charged back. I'm aware that me chasing this down may not be very fast lane in terms of time efficiency

None the less, it's the principle of the matter. I don't like being scammed. We pride ourselves on delivery of what we promised.

Perhaps my wealth stagnates with my principles…lol.

 

[Growth & Learn]

Whoah...that's not a bad rate. I get 1 in every 30 transactions and before it was 1 in very 10.
You can't please every buyer but i find the more you describe your items with photos the less likley a buyer is to file a dispute.

When there is a disagreement or an issue where a buyer is unhappy we're very quick to take care of them. That's why we don't get many chargebacks.

It's often a pain in the butt but the vast majority of the time we try to put our buyer's needs before ours. It works for us…except in these rare chargeback circumstances.

 

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[theag]

Had this happen 2x this week. Just about $50 each so I dont care about the money, but I care about being F*cked. So on monday I'm going to file criminal complaints against both. Let the police do the work. I have proof of the order and delivery.

Even if nothing comes from this, I still have the satisfaction of them opening the mail, finding a letter from the state attorney and having their day ruined. Hilarious.

 

[OzzieRob]

Had this happen 2x this week. Just about $50 each so I dont care about the money, but I care about being F*cked. So on monday I'm going to file criminal complaints against both. Let the police do the work. I have proof of the order and delivery.

Yep...same thing happens to me as well from time to time. Usually i start off by "requesting more details about an ebay member" in ebay and then the buyer also gets this email and wonders what the heck they are getting enquired about. Then i write to the buyer and write up a mock letter saying we are going to meet with such and such law court at their expense in my state and the scammer often baulks and totally change their attitude and apologises. Sometimes they will ignore this so i step it up a bit. Is you name so and so and you live at such and such and your phone number is...how about if you return my product to my PO Box xxx and we will call it a day. Sometimes they will say, guess what it turned up but it doen't fit so i want a refund.

One of my customers says she was deaf and the parcel was delivered and signed but it wasn't her that signed it, WTF?...i lost the dispute and was out of pocket $300. It cost more money to have that extra postal service for the actual person to sign but it's not worth it as i don't see it working out.

Often i deliver with USPS to customers around X-Mas time and some end up never making it out of NY customs. Lucky for insurance.

The best way around all this nonsense is to mark up my goods, take a hit every now and again and take it on the chin as time is my friend.


Cheers
Rob

 

[Equilibrium]

in the past of digital sales i ALWAYS copied a heavily watermarked (multiple colors, alternating font size, inter-lapping through text)
anything gets sent out I take a picture
anything gets sent via email, a copy is saved.
if its a package, ill take a video when its put into package and sealed
if that client every tries to scam, I have their info and
1. terms of service for doing business with me
2. copy of what they paid for
3. all correspondence

 

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[Maxjohan]

You're losing 1 in 6,000-7,000 sales. And you can't handle the humiliation. Is that right?? Some of those ClickBank products gets like 20% refunds (uses 60-days money back guarantee) and are making millions. They must be losing sleep. You have the wrong attitude with this. Especially when it's digital products.

 

[DaRK9]

Drop PayPal and get a real payment processor.

 

[Equilibrium]

name one?
I use stripe.

 

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[theag]

Drop PayPal and get a real payment processor.

Stupid statement.

Please provide proof with statistical signifiance where disabling paypal as a payment method does NOT lead to massive decreases in revenue.

@Maxjohan gets it.

 

[DaRK9]

Stupid statement.

Please provide proof with statistical signifiance where disabling paypal as a payment method does NOT lead to massive decreases in revenue.

@Maxjohan gets it.

Please provide proof where I say disabling paypal increases revenue. I've been here long enough to know your mode of posting.

Seller Protection
"Items Not Covered
Items that don't match your description, intangible items like services or digital goods, items that violate our or eBay's policies, and items you sell or deliver in person. All are not covered."

Obviously all disputes end up at the banks judgment and not the payment processor but in my experience, Stripe works with you instead of instantly reversing the payment.

I also use www.signifyd.com

 

[theag]

Please provide proof where I say disabling paypal increases revenue.

I never referred to you saying that. You simply don't get it.

 

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[DaRK9]

I never referred to you saying that. You simply don't get it.

Whatever makes your day better man. My sales rates haven't dropped since switching from Paypal to Stripe as my main processor. I've only had one person use the Paypal option in the last 4 months.

If I was selling eBooks, ClickBank BS or anything under $80 that was an emotional buy then yes, Paypal might be the better option. Remember that buyers remorse generally comes from emotionally driven quick sells.

For digital goods save all IP logs, use a download platform that links user account, IP and download time, and completion.