EXECUTION Do you guys accept Paypal payment option? If so, how do you deal with chargebacks / disputes?

[fastlanedoll]

Holla fellow faslaners,

Am just starting out here, and trying to get my algorithm all sorted out before I take my first step into this business

I've been an avid user of Paypal for over 10 years as a consumer, but never as a seller.
From what I've seen, Paypal protects the buyer, not the seller.
Say, if you're dropshipping and you don't ship the product yourself, what happens if a customer files a non-receipt dispute (since I'm not the shipper, I can't prove it's been shipped)

Or what if they file something more obscure, like 'item not as described' etc. etc., which to an extent, is in the eye of the beholder.

I think a lot of consumers won't buy without it because of this reason.

What's your take on this issue?

 

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[MJ DeMarco]

Scammers and schemers are simply a cost of doing business. It really shouldn’t be something to worry about in the grand scheme.

 

[minivanman]

MJ is correct but I know a lady that flips glassware.... lots of it. More than most people make in a year is how much she makes. She has a very large following. She accepts cash or checks. If you send her a check, she waits until is has cleared and then she mails out your glassware. She has a top notch reputation. She does not deal with any type of online payment form. It seems to be working great for her, but I understand, it won't work that great for others.

 

[fastlanedoll]

Kudos to her. No offense, but I see two major problems right away. Glassware is heavy to ship & fragile. Also, does not deal with online payment eh?
I guess what she sells must be pretty damn special.
I haven't sold a single thing yet, but maybe this isn't going to be as hard as I thought.

EDIT: Does she have a large following solely due to glassware?

 

[minivanman]

She only sells glassware. It is a special kind but I don't remember what it is. I'm a guy so the name didn't stick with me like say, she was selling Camaro or Mustang parts. lol Now I'd remember that. She says she has almost no breakage. I haven't conversed with her in a few years but I can see if my friend Marsha has. I'll ask her if she remembers what type of glassware it was if you want....

 

[Tourmaline]

I remember once upon a time, I shipped an order to a customer. Seemed like any other order. Billing address and shipping address matched, I thought nothing of it.

It comes back to me a few months later as a chargeback. Apparently this person was dead, and someone used their credit card to buy things and had it shipped to the dead person's house.

I was out the product and the money from the order.

Just how it goes...

There's always going to be some lowlifes, but most people are not like this so in then end it's alright.

 

[Scot]

It depends on what your products cost...

But MJ really hit the nail on the head. My products cost $6/unit. If someone wants to scam me out of a $6 bottle of salad dressing... ok, cool. Its a write off.

If you're selling computers and someone swindles $1,000 off you, you need to have a much better paper trail and system set up. For example, I bought a 60"TV from Amazon. Amazon delivered it, then proceeded to unbox, and install it. Wow, white glove service I thought. Nope, he told me they needed to turn it on, verify it worked, took a couple of pictures. This way, if I wanted to tell Amazon they shipped me a broken tv, they had proof I was full of crap.

 

[minivanman]

Ok, so I got the low-down on how she did it. So she used Facebook and Craigslist. At first, she only took cash or a cashiers check from the bank only. Not from anywhere else but a certain bank. Then when WalMart started doing the WalMart to WalMart thing, she used that method. She was kind of a hard@ss like me and would tell people if they didn't want to pay using her methods then they could buy from some place else. But she had built a huge following and made a lot of money. 3 months ago she had a big sale and got out of the business. Apparently her and her sister moved to Florida. She sold a lot of depression glass and Hummels along with some Fenton but apparently the Fenton wasn't a big money maker for her. Some how she didn't have much breakage.

 

[Ecom man]

As a seller you are actually far more protected by PayPal than through a regular payment provider that you use to accept credit cards.

PayPal accepts a tracking number as delivered as proof of the items received in the event of item not received chargeback. Credit cards require signature confirmation as proof of delivery. In regards to an item being fraudulently charged (real or not) PayPal still has the edge as they have PayPal seller protection that at least gives you some protection.

TBH the whole online payments is rife for an entrepreneur to come in and fix the system as the current system is bad for pretty much everyone involved (besides the card companies who don’t bear any risk for “fraud”.

Customers can way too easily get credit info stolen and have to spend tons of time fixing it and retailers carry the entire cost of chargebacks so they are out the product as well as chargeback fees on top of it.

 

[cy-]

TBH the whole online payments is rife for an entrepreneur to come in and fix the system as the current system is bad for pretty much everyone involved (besides the card companies who don’t bear any risk for “fraud”.

I agree, though I find it very difficult for somenone to change the fundamentals.

See for example Stripe, they did a lot of good things for merchants in terms of simplifying getting a merchant account and get going with online payments.

But they can never change the chargeback game in that sense, since VISA & Mastercard set the ultimate rules and fees.

In my local entrepreneurship group on Facebook I see a lot of business owners asking for a payment processor who doesn't take a percentage of their processed revenue, but its just not going to happen, since VISA & Mastercard will always charge their partners per credit card charge and so fourth.

Now we will have a competing credit card from Apple and having worked at Apple I predict they will be even more relentless than VISA & Mastercard.

There is a saying for businesses working with Apple and it is that you don't negotiate with Apple, you apply to their terms or you don't do business with them.

I expect it to be the same for merchants & retailers..

 

[LittleWolfie]

But they can never change the chargeback game in that sense, since VISA & Mastercard set the ultimate rules and fees.

In my local entrepreneurship group on Facebook I see a lot of business owners asking for a payment processor who doesn't take a percentage of their processed revenue, but its just not going to happen, since VISA & Mastercard will always charge their partners per credit card charge

How much of their budget have they allocated to funding the development of visa/mastercard replacement? How much are they currently paying in fees?

Literally any cryptocurrency will allow that, in fact it is a major advantage sung by the proponents of the cryptocurrency world, decentralisation means no one party controls it and can charge % fees. Plus it is irreversible.

What is wrong with Gulden.com as a payment processor?

 

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[cy-]

How much of their budget have they allocated to funding the development of visa/mastercard replacement? How much are they currently paying in fees?

Literally any cryptocurrency will allow that, in fact it is a major advantage sung by the proponents of the cryptocurrency world, decentralisation means no one party controls it and can charge % fees. Plus it is irreversible.

What is wrong with Gulden.com as a payment processor?

Because it is not about what the merchant wants, I think you are looking at it from the wrong angle.

As a merchant you want to integrate the solution that causes less friction for your customers thus increasing your revenue as much as possible.

When customers purchase online I suppose credit cards are the most favorable and fast solution there is for customers in most developed countries. At least the ones I operate in.

So assume the customers reaches your checkout point and now has to pay for their product.

They see this thing called "Gulden" that they have to buy and store, maybe even make an account for. (I read about it on their page and this is what I understand you have to, correct me if I'm wrong).

Then most or at least a large percentage of these customers will think "wtf is this, I don't trust this, I'm buying somewhere else".

So its really about what the customer wants and not what merchants want.

So merchants are "forced" to obey VISA & Mastecard rules if they want to have the highest possible revenue when selling products online in many developed countries.

 

[LittleWolfie]

Because it is not about what the merchant wants.
I think you are looking at it from the wrong angle.

I think it is a bit of a chicken and egg or marketplace problem.

As a merchant you want to integrate the solution that causes less friction for your customers thus increasing your revenue as much as possible.

Yes and the more payment processors you offer, the more choice there is availble, skrill , paypal, visa,mastercard, amex, paysafe, SEPA

When customers purchase online I suppose credit cards are the most favorable and fast solution there is for customers in most developed countries,At least the ones I operate in

Do you operate outside the Single Euro Payments Area (SEPA)?

They see this thing called "Gulden" that they have to buy and store, maybe even make an account for. (I read about it on their page and this is what I understand you have to, correct me if I'm wrong).

Then most or at least a large percentage of these customers will think "wtf is this, I don't trust this, I'm buying somewhere else".

Yes, the exact same problem paypal had. Create an account, send them money and then pass it via email? wtf is this, I don't trust this, I'm buying somewhere else.

Then most or at least a large percentage of these customers will think

Yes, critical mass is important as well as early adopters.

Looking at the paypal playbook the way to achieve this was through continual application of money to the customer side, (in he early days they paid people to sign up and to sign up their friends) to gain enough critical mass)

since the customers are unwilling to pay, someone has to, will the merchants?

Most customers like lower prices, less

So its really about what the customer wants and not what merchants want.

Do you think customers want lower prices or better products? Merchants could split the savings from eliminating the fees, via reducing their prices or improving their products quality.

Adverting $ can persuade customers as to what they want. How many customers do you think wanted paypal? It is about what the people spending $ want.

So merchants are "forced" to obey VISA & Mastecard rules if they want to have the highest possible revenue when selling products online in many developed countries.

As long as they have that attitude,they always will and will never disrupt the card payment industry.

 

[Vigilante]

Play for the 99%, deal with the 1%. In 15 years of Paypal, I have had maybe 1-2 chargebacks total. Non-issue.

 

[LittleWolfie]

Play for the 99%, deal with the 1%. In 15 years of Paypal, I have had maybe 1-2 chargebacks total. Non-issue.

Probably why so few merchants are ready to spend the dosh to have alternatives made.

Total non-issue they would just like to complain about.

 

[SeanLewis]

I've heard horror storys with paypal and people getting their account closed with $50k+ in it. Make sure you withdraw the cash from your account as soon as possible..

 

[Vigilante]

I've heard horror storys with paypal and people getting their account closed with $50k+ in it. Make sure you withdraw the cash from your account as soon as possible..

Regularly sweeping any third-party account is always a good practice.

 

[Vigilante]

Reminder to DO AS I SAY, NOT AS I DO.

Reminder to SWEEP YOUR PAYPAL ACCOUNT REGULARLY.

I didn't.

I have a trade show coming up in a few weeks, so today I :
1. Wired a supplier in Asia a large paypal transfer from cash on hand and then I
2. Requested a Paypal credit card reader

Something within the combination of those two things triggered an account review by Paypal. While I wasn't frozen completely, they requested a bunch of additional documentation. A 20 minute Google study of this request triggered the stories about the 180 day cash freeze Paypal is FAMOUS for.

Then, I realized I really didn't want the money I had sitting in Paypal (several thousand dollars) frozen. For some reason, I was fine with it sitting there, but not fine with the loss of control.

So do as I SAY, not as I do. Sweep your account regularly. Paypal is NOT regulated, and thus doesn't play by the same rules when you violate theirs (or even if you don't).

I triggered a transfer, and in a subsequent discussion I had with Paypal on the phone I was able to get the account restored back to normal. So, personal contact in these situations is highly recommended. I also gave them everything they asked for, which probably helped.

Anyway, that's not the point. The point is ... establish the discipline that on certain thresholds or with scheduled frequency sweep the money. Stay in control.

And if you ever run in to issues, post here at the forum and we can help you through them.