Possible PayPal loophole to stop scammers...

Wouldn't a letter work better? If they see the postcard, the scammer might refuse to sign for it. If it's in a letter, they won't know what it is and may be more likely to sign for it.

But how many sales will you lose if you withdraw the allure of an instant download?

Jack,

Dont sweat it. Are you willing to chop your golden goose just becouse of a few rotten eggs.

In every industry there are scammers. You just cant run from them.

When this has happened to me, i had wanted to start a name and shame associatiion forum of sort, where all IMers can gather and do a group Ban or something...

But after thinking about it, i just thought that it was not worth the negativity , and i dropped the ball..

Yeah, wish there was something. Anything by mail would reduce the buyers from outside the country (and most are legit).

But it's a pain in the *** when someone decides to scam you.

PayPal requires a signature on transactions exceeding $250. Anything less than that must be verifiable through an on line source like USPS. Delivery Confirmation will cover you for that.

John

We all know that Paypal can be such an ***hole sometimes. Even though you have the postcard thing implemented, the whole process will just drain you off. If it's just a hand full of bad apples, just forget it and move on.

That's only true for people claiming unauthorized transaction. And the ones that are fraudulently claimed unauthorized, normally dont give you time to mail the post card before the complaint is filed.

This can be dealt with most of the time by sending proof of delivery (ip address) to the person via email with a threat of giving it to PayPal to use for geo tracking to see if its the buyers ip and complaint ip are the same.

In my experience, they cancel the complaint most of the time.

This is just totally wrong. PayPal does side with the seller of digital products. I know this for a fact because I have only lost 2 disputes in 3 years of selling digital products.

If there is a dispute filed inside of paypal and you make it clear that the product is available online, that the cutomer has to log into a protected members area and that you have proof of their IP address logging into your protected area and downloading your product then you can win disputes.

Blanket statements like this are nothing but inacurate and completely misinformed.

I think you guys are mixing apples and oranges.

If you SELL a digital download product and someone pays via PayPal and later files a dispute trying to get a refund, PayPal will NOT HONOR IT. As soon as it's escalated to a "Dispute" rather than a "Complaint", PayPal will close it immediately. They do not deal with disputes for digital download products, period.

OTOH, if someone pays via PayPal that's funded from a credit card, then PayPal's hands are tied if the buyer files a chargeback with the credit card issuer. PayPal has a process they are required to follow. You can appeal the chargeback, but without some pretty solid paperwork, you're not going to be successful.

(I've experienced both issues with PayPal, and frankly, they've been very helpful with them. There's just not much they can do when it comes to chargebacks.)

I don't think that using an escrow service would protect you against chargebacks, either. If you read the "fine print", there's probably a clause in there that says you're liable to repay the escrow service if they get hit with a chargeback from the buyer. That's because consumers have up to 6 months to dispute credit card charges, which are related in part to identity theft issues.

One online biller has a particularly "nasty" policy (from the consumer's standpoint), but it's great from a seller's perspective -- CCBill.com. Their Terms of Service make it virtually impossible for anybody to succeed with a chargeback because you basically give them the right to file a lien or judgement against you in the amount of the chargeback plus legal and other fees. (You can imagine the online services they cater to...)

In order to protect yourself fully, you need a written agreement that sets forth the various obligations of each party, including situations like this. I'd include a clause that says something like, once I've delivered anything to the client, they agree to payment in full. And if a credit card is used for payment, they agree that if a chargeback is submitted, they agree to reimburse me in full for the outstanding amount within a small time-frame, including all fees and related charges. They also agree that failure to honor any of their payment agreements will allow me to file a judgement in any court and submit it to a collection agency. I'd also throw in some stiff penalties.

Having a contract like this will not prevent someone from filing a chargeback. But if they DID, I'd send them a copy of the agreement saying they have 10 days to pay in full, or reverse the chargeback; otherwise, you'll file a judgement against them. Since they've already agreed to your terms, it's virtually impossible for them to dispute in court. Have a lawyer draft it up in such a way that you can file for summary judgement without any problems.

In this particular instance, you could get a lawyer to write a letter to the other party threatening to report them to several places for committing credit card fraud -- the chargeback form is an affidavit and if she told you she was having trouble with her bills, but she filed an affidavit citing another reason, there might be some grounds for legal action against her. It's like somebody screaming "Fire!" when there wasn't even any smoke. Fire Departments are not amused. Neither are credit card companies. It all depends how nasty you want to get.

-David

Big Mike has it right. i.e. "I'm not wasting $100 of my time to win back $10"

Really that's what it's all about. It is frustrating when you've delivered a legitimate product or service and someone scams you for a refund and I can understand Mark Andrew's position.

I had the opposite thing happen when I saw a female warrior on the forum saying she needed to earn money by the weekend to pay her rent and asking for work. I asked her for a quote for some small project and she quoted $25. I then asked her how much she needed to pay her rent and she told me she was $100 short.

The upshot was that I sent her $100 via Paypal. $25 to do the initial work and an advance against future work of $75.00 so that she could get her rent paid.

I had to push and cajole her to do the initial work and then when I asked her to do the next small job she did not respond. Again I had to chase her (my time used again) and she said she would get the job done. Result? Despite chaising agin I never heard from her after that.

I considered trying to get the money back but then reasoned as Big Mike said that it was just not worth my time to do so. Put it down to experience and moved on.

If you're talking about $50, or even $10, I agree with Mike.

But ... if it's hundreds, it's worth a letter from my lawyer. (PrePaid Legal is great for that kind of stuff!)

If it's thousands, I'll get a contract written up FIRST.

Hi guys

sometimes it can work on its own merit a while ago i purchased some design work on the wf and they didnt deliver and paypal did actually refund me even though it was virtual goods.

Lots of other people complained too so my feeling on it is that if people stick together and complain they will do something about it.

The biggest flaw i find with paypal is the record delivery carry on for example if i was to sell clothes on ebay and didnt send it by recorded the person could complain and i could do nothing as certificate of posting isnt accepted. So if you sell tangiable goods please get recorded delivery or you could end up out of pocket.

kind regards


sam
X

I agree, I HATE SCAMMERS FULL STOP. I hate when people say they are great at something and you later find through searching and learning about them, that THEY ACTUALLY ADMIT THEY SUCK at what they are charging you TONS of money for and saying they are a professional when they are not...

I always provide a 100% money back guarantee, and feel anyone that has a GOOD REPUTATION online should also do the same. I also feel if you have a GOOD REPUTATION online, you usually provide a privacy policy, which I do as well. I would never share the info about a customer with anyone else, ever. Its PRIVATE...after all (privacy policy, duh).

If a customer is unhappy in any way, I just give a refund...especially if its been only 1 day for a service you couldn't begin for a few days ...I'm usually always working on someone else's project as well...and thats what I told this person too....couldn't begin for a few days!

If they did not RECEIVE Their product, AT ALL, of course...they should get a refund if they asked for it...its only fair.

I also always approach vendors directly when I have any problems. I talk it out w/ them FIRST....and if they are being EXTREMELY unreasonable, and will not provide a 100% hassle free guarantee and refund as they said they would, then I have no choice but to pursue matters in other ways.

Hey, and if they buy something and want a refund within say only 1 day...especially if it is a service related service that I could't even start for a few days (and told them so)...then when they asked me for a refund a DAY later...duh...why the heck wouldn't I give a refund. makes sense...

and the last thing I would do to a customer is try to upsell them on 50 other services I may also provide...that they did not want, ask for, or need...I would FOCUS on giving them the 1 service they asked for...and doing that really well.

But thats just me...thats how I would handle it...

But I feel if the customer is nice enough to approach me directly prior to taking up matters in other ways, I always try to bend over to help, especially if its only a day after payment for a service that I couldnt begin for a few days.

Interesting stuff...but I agree, I HATE SCAMMERS FULL STOP!

Do folks feel that this issue is more prevalent in the IM than other markets? I have been selling products in the Health Niche and I am yet to encounter any problem. Having said that these are people who email me asking me what 'Confirm your subscription by clicking on the link' means and what they should do.

Jack...

I've always done this. As an example, I sold a product for $473.
I provided instant download AND I mailed them a copy on CD with
the delivery confirmation.

I did it all through Pay Pal. My only guarantee was if the product
was defective I would replace it.

I sold well over $100K worth of this product and had less than 10
requests for refund. I denied every request because the buyers admitted
to me via email that the product worked 100% as advertised.

In each case the buyer opened a Pay Pal dispute. In every case I
simply replied that the dispute was not reviewable per PP policies on
physical products that had been delivered. I provided the USPS tracking
code number in my response.

In every case Pay Pal denied their claim and closed the dispute.

Tsnyder

Hi guys I just came across this post and I wish to put in my contribution. Two ways I think we can combat user scammers is to make the email bot autorespond or send confirmation before downloading. The email as well can be set to request for email opened reciept.... i.e if the email was opened a receipt is generated to indicate that the email was opened buy the recipient and date stamped sent back to the sender of the email. This can be used as proof of download of the digital product as you should always keep a copy of all emails sent out.

Mmm. Funny situation huh. Every time I got scammed when I buy digital products, I always lost my money in the dispute process. Paypal always said something like they cant do anything for me since it is digital and there is no way to proof that the seller is a scammer.

The postcards strategy might works. Those people who scammed me in the past even use some fake delivery confirmation and it works as well.

Must be a just US paypal thing, because i never lose dispute by telling them its a digital download.

My software stores their IP address and the number of times they logged in, so i have proof they had access to the product, another reason to use membership software to deliver all your products, if there is evidence of logging in then paypal excepts that as proof they got their product.

Robert

Sending postcard does not prove the delivery...it's better to send the CD with the program, if anything. Or just implement online protection system and if they do a refund, ban their license.

Just as a note it is quite possible to win disputes/chargebacks with Paypal. I have simply sent archived copy of the sales page and email/download log from time of transaction. Only problem is that it took me 5 minutes to gather data and them about 3 months to respond so by the time I had won, the held money had gone down in the exchange rate considerably anyway. The problems of guilty until proven innocent but pretty much unavoidable online it seems.

If you use kunaki for cd delivery, then kunaki will provide you w/ a tracking number for every item. I've been able to resolve most disputes like this by providing paypal w/ the tracking number from kunaki.