PayPal - New refund AND chargeback rates...DOUBLED!

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Michael Oksa 14 years ago

Originally Posted by Steven Wagenheim

Good luck with that.

So, how has your day been?

A guy can dream, can't he?

My day is going quite well, so far.

~Michael
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- Jill Carpenter 14 years ago
  
  I think I fall into this category
  
  If you're in our PayPal Preferred program, you won't pay chargeback fees for your eBay transactions.
  
  Although I need to double check that as I don't believe I've ever encountered a chargeback (knock on wood). That is different than a refund.
  
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14 years ago

That's weird that you just got that email, Michael. I got it about two weeks ago.

I've never had a chargeback, yet, so I didn't spend any time thinking about it but I have to agree that PayPal needs to come down a little more even-handed with things.

It seems that all someone has to do is say "oops, wasn't me" and you're stuck footing the bill. Surely they can't really believe that so many people are getting unauthorized charges?

Tina

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14 years ago

PayPal's chargeback penalties are still less than most merchant account's fees. Also, PayPal is much more tolerant of chargebacks than merchant accounts. A merchant account will freeze your account if you go over the 1% mark. PayPal will continue to work with you even if you have 8 or 9%... although if your chargeback rate is that high, then you need to check your business!

There are a lot of horror stories about PayPal, but I can assure you that there are far worse horror stories about the major banks.

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14 years ago

Originally Posted by E. Brian Rose

PayPal's chargeback penalties are still less than most merchant account's fees. Also, PayPal is much more tolerant of chargebacks than merchant accounts. A merchant account will freeze your account if you go over the 1% mark. PayPal will continue to work with you even if you have 8 or 9%... although if your chargeback rate is that high, then you need to check your business!

There are a lot of horror stories about PayPal, but I can assure you that there are far worse horror stories about the major banks.

You may have a point, but I also wonder if PayPal has more volume than any single merchant account provider? That would certainly help to keep costs lower. And, I'm not sure how merchant accounts differ, but PayPal is all electronic (with a few exceptions) which could also be a reason why their costs are lower.

But I know your post isn't about WHY there are differences in rates, just something I was thinking about.

There usually are horror stories for anything. Just because those other horror stories exist, doesn't mean we have to be happy about the doubling of chargeback fees.

All the best,
Michael

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14 years ago

Originally Posted by avenuegirl

I think I fall into this category

If you're in our PayPal Preferred program, you won't pay chargeback fees for your eBay transactions.

Although I need to double check that as I don't believe I've ever encountered a chargeback (knock on wood). That is different than a refund.

You may be in the PayPal Preferred program, but note that this will ONLY apply to chargebacks on eBay transactions.

So, if anybody gets a chargeback on anything else, then they are not covered.

To me, that line in the email message tells me that PayPal knows there is an issue with problem buyers.

All the best,
Michael

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14 years ago

Originally Posted by Michael Oksa

You may have a point, but I also wonder if PayPal has more volume than any single merchant account provider? That would certainly help to keep costs lower. And, I'm not sure how merchant accounts differ, but PayPal is all electronic (with a few exceptions) which could also be a reason why their costs are lower.

But I know your post isn't about WHY there are differences in rates, just something I was thinking about.

There usually are horror stories for anything. Just because those other horror stories exist, doesn't mean we have to be happy about the doubling of chargeback fees.

All the best,
Michael

Nobody is ever happy to hear that their fees are being doubled, but let's look at how a chargeback effects PayPal.

When a chargeback is filed, PayPal MUST respond to the accusing bank. You will also get an email and a chance to submit your evidence.

A real person must review your evidence and submit it to the accusing bank. If the bank sides with the customer, you are sometimes given the opportunity to file an appeal and submit more evidence, which is again reviewed and submitted by a real person.

Let's assume that the total time that a PayPal employee spends on your case is one full hour. If that person is making $13 or $14 an hour plus employee benefits and payroll tax, it will probably cost PayPal around $20 for that hour of work.

If PayPal continued to charge a $10 fee for chargebacks, then they would basically lose $10 almost every time a chargeback is filed.

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14 years ago

Originally Posted by E. Brian Rose

Nobody is ever happy to hear that their fees are being doubled, but let's look at how a chargeback effects PayPal.

When a chargeback is filed, PayPal MUST respond to the accusing bank. You will also get an email and a chance to submit your evidence.

A real person must review your evidence and submit it to the accusing bank. If the bank sides with the customer, you are sometimes given the opportunity to file an appeal and submit more evidence, which is again reviewed and submitted by a real person.

Let's assume that the total time that a PayPal employee spends on your case is one full hour. If that person is making $13 or $14 an hour plus employee benefits and payroll tax, it will probably cost PayPal around $20 for that hour of work.

If PayPal continued to charge a $10 fee for chargebacks, then they would basically lose $10 almost every time a chargeback is filed.

I definitely have no problem with PayPal charging for chargebacks, and they can charge whatever they like.

My point isn't even so much about how much they are charging, as it is about them doing so little about bad buyers. How many times does one person get to claim a fraudulent charge? I don't know, but at some point they become a problem buyer and should be dealt with.

For the sake of argument (in the best sense of the word), let's say the person only gets paid $9 an hour and it only takes 20 minutes of actual time to clear up a case. Then it comes out to about $4.50 ($9 = about $13.33 after benefits, payroll tax, etc. X 1/3 of an hour).

Of course, neither of us has any real way of knowing what the people handling these cases make per hour or how long they take. I was just using an example where it could easily cost less than $10.

That being said, I find it kind of funny that this wouldn't be an issue if PayPal always charged $20.

I hope I'm not coming across as anti-PayPal. I'm not. I like using them and find their service to be widely accepted and convenient. My main issue is how they seem to be unbalanced when it comes to going after sellers and not buyers.

All the best,
Michael

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14 years ago

Originally Posted by Michael Oksa

My main issue is how they seem to be unbalanced when it comes to going after sellers and not buyers.

All the best,
Michael

If PayPal aggressively went after buyers, then you would have a bunch of PayPal Buyer Horror Story websites and that would hurt us all.

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14 years ago

Originally Posted by E. Brian Rose

If PayPal aggressively went after buyers, then you would have a bunch of PayPal Buyer Horror Story websites and that would hurt us all.

True enough.

I don't think I used the word 'aggressively' though. All I want to see is balance.

The threat of Buyer Horror Story websites, to me, is not a good enough reason to not re-tip the scales so they are more balanced.

~Michael

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14 years ago

The problem I have is with the attitude that THEFT (cause that's what it is)
is part of the cost of doing business and aside from banning refunders
(again, horse already out of the barn) there's not much we can do.

Theft is a part of the cost of doing business, though. Doesn't matter whether it's an online business or offline. I spend years in the retail and restaurant fields and if you sell something, theft will always be a part of your operating costs.

Sure, you always do your best to minimize that expense but it is still there and any one who wants to stay in business for more than a week knows that they must account for it.

Tina

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14 years ago

Originally Posted by TMG Enterprises

Theft is a part of the cost of doing business, though. Doesn't matter whether it's an online business or offline. I spend years in the retail and restaurant fields and if you sell something, theft will always be a part of your operating costs.

Sure, you always do your best to minimize that expense but it is still there and any one who wants to stay in business for more than a week knows that they must account for it.

Tina

That is very true, Tina. All we can do is do our best to reduce how often it happens to us.

However, that type of thing is between the seller and their customers. Now, enter a third party, in this case PayPal, that makes you pay extra to have somebody steal from you - without doing much (if anything) to go after those same thieves. That's where I see as the main issue.

But, for all we know, this could simply be part of a bigger plan. Maybe PayPal is working on this very issue right now.

Like I said earlier...a guy can dream, can't he?

All the best,
Michael

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Dennis Gaskill

14 years ago

Originally Posted by JayXtreme

OK...

Why should Paypal take a "stance" against serial refunders?

They process payments each way. Nothing more.

Why should it be paypal's job to crack down on your/our shoddy customers?

Jay, I love your insights. You often plant "thought seeds" in my mind that help me clarify my own thinking or give me an additional perspective to view a topic from, so let me see if I can return the favor.

It would be in Paypal's best interest to take a stance on serial refunders. We vendor's are their customers as much as the buyers, more so if you only consider volume. If not for us, their business and profits would be a fraction of what they are now.

The way you used "our shoddy customers" makes it sound as if we own them or have something to do with their behavior. They are also Paypal's customers in many, if not most cases, because they also have Paypal accounts. So they are also Paypal's shoddy customers.

Only Paypal has access to that customer's every purchase, so they are the only ones that know if a person is a serial refunder - which is a nice way of saying a thief and fraud artist - so Paypal is the ONLY entity that has any chance to stop their fraud at macro vendor level rather than the individual merchant level. We can try to ban their IP, but they can use a firewall, and many do still have a dynamic IP address...but even if we're successful at that, that still leaves them free to commit fraud against the rest of the world.

This fraud also costs Paypal time, money, and manpower, which they pass the cost of onto us, which we pass on to our customers. If they protected both parties equally it would be in the best interests of everyone but the fraudsters. I'm sure they could find a way to do this that would be effective and satisfy the credit card companies. Perhaps something as simple as requiring a digital signature to some legalese.

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Aussie_Al

14 years ago

Originally Posted by E. Brian Rose

There are a lot of horror stories about PayPal, but I can assure you that there are far worse horror stories about the major banks.

Well said - these days it seems popular to bash paypal but if you do like it get a merchant account and see how they treat ya

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14 years ago

Originally Posted by Aussie_Al

Well said - these days it seems popular to bash paypal but if you do like it get a merchant account and see how they treat ya

Hi Al,

I just wanted to be clear. I am NOT bashing PayPal. I like using them, and they suit my needs just fine.

Asking for a balanced approached isn't bashing them. It may be a fantasy, but it's not bashing.

All the best,
Michael

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Aussie_Al

14 years ago

Originally Posted by Michael Oksa

Hi Al,

I just wanted to be clear. I am NOT bashing PayPal. I like using them, and they suit my needs just fine.

Asking for a balanced approached isn't bashing them. It may be a fantasy, but it's not bashing.

All the best,
Michael

I got you - and I wasn't singling you out - but it does sem at times almost daily some one will post a "paypal horror story" on this forum

I actually had a transaction this week where the buyer went to his bank and demanded a charge back and the money was refunded without it even going through paypal's dispute channel - I actually spoke to an American (not some Indian help desk person) who saw that I had sent the good with atracking number and it was out for delivery that day (meaning the customer as soon as he had recieved the packaged had demanded a refund) and got it

The super helpful guy at Paypal saw what this customer had done and agreed it was wrong and unfair and the very next day issued me with a full refund using little bits of charge back money.

Thank you for contacting PayPal.

I didn't receive a response from the buyer regarding the stop payment we
discussed yesterday. I have issued you a courtesy credit for the total
amount that was reversed of $164.76 USD. You will see a number of
different postings in your history that say fee reversal (this is the
fastest way to get funds into your balance), so don't be alarmed. If
you have any other questions let me know.

Thanks for sharing your concerns with us. We value what you have to say,
and we know situations like this can be difficult. If you have more
questions, visit our Help Center by clicking "Help" in the top right
corner of any PayPal page.

Sincerely,
Dan

Just thought I would share that with you

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Dennis Gaskill

14 years ago

Originally Posted by Aussie_Al

Well said - these days it seems popular to bash paypal but if you do like it get a merchant account and see how they treat ya

Hi Al - I've had a merchant account for about 11-12 years. They treat me very well and are much easier to work with than Paypal. The rates are about the same too, so I'm not sure what your point is. Maybe you had a bad experience with one?

However, I still use Paypal because if I don't some customers can't, or won't, buy.

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14 years ago

Originally Posted by Dennis Gaskill

However, I still use Paypal because if I don't some customers can't, or won't, buy.

I drive this point home in my teachings all the time, but some are too swayed by the PayPal horror stories that they have read on websites owned by competing merchant accounts.

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Dennis Gaskill

14 years ago

Originally Posted by E. Brian Rose

I drive this point home in my teachings all the time, but some are too swayed by the PayPal horror stories that they have read on websites owned by competing merchant accounts.

I'll be honest with you, I let those stories sway me for a while too, so I can understand that. There wasn't anything specific that I recall that prompted me to give them a try. I think I just decided to find out for myself. I still only use them for digital products though. My physical products go through my regular merchant account, with the exception of someone asking to pay by Paypal, then I have them email me the funds.

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Dan C. Rinnert 14 years ago

Originally Posted by Dennis Gaskill

I'll be honest with you, I let those stories sway me for a while too, so I can understand that.

Me too to an extent. I was already using PayPal before reading a lot of those stories, but they made me worry about continuing to use them.

But, what I've come to realize is that often there is a little tidbit or something that the storyteller leaves out. Something that makes you go, ah-ha!. We never see PayPal's side of the story. It's only when the storyteller slips or when other people squeeze it out that we find out there was more to the story than what we were initially led to believe.

On top of that, there are suggestions that some people make that just seem certain to raise red flags at PayPal, such as the suggestion of withdrawing large amounts from PayPal right after they come in. How could that not raise red flags with PayPal?

So, I remain cautious with using PayPal but I also remain cautious about reading too much into the horror stories.
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Aussie_Al

14 years ago

Originally Posted by Dennis Gaskill

Hi Al - I've had a merchant account for about 11-12 years. They treat me very well and are much easier to work with than Paypal. The rates are about the same too, so I'm not sure what your point is. Maybe you had a bad experience with one?
.

I forget which merchant account we were using at my day job but there would 100% take the side of the buyer every time - even when we showed them proof of the order, proof of shipping etc we would have 5-10 chargebacks a week , the bank was never helpful and didn't care to review any of our evidence ever, so we did switch over to 100% paypal

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07084464458

Banned 14 years ago

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Michael Oksa 14 years ago

Originally Posted by 07084464458

the fact remains that sell a good product that buyers will not have the chance to request for a charge back.

That is completely false.

People request chargebacks for all kinds of reasons. Unfortuantely, most of those reasons are not what chargebacks were designed for.

~Michael
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14 years ago

Originally Posted by 07084464458

the fact remains that sell a good product that buyers will not have the chance to request for a charge back.

Another comment from the clueless (and nameless) peanut gallery.

You obviously know nothing about this business or you wouldn't make such
a ridiculous comment.

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14 years ago

Originally Posted by Steven Wagenheim

Another comment from the clueless (and nameless) peanut gallery.

You obviously know nothing about this business or you wouldn't make such
a ridiculous comment.

Nor would they make spam posts, or have a user name that is a premium cell phone number in the UK.

Just sayin'

~Michael

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KathyK 14 years ago

Originally Posted by Michael Oksa

Nor would they make spam posts, or have a user name that is a premium cell phone number in the UK.

Just sayin'

~Michael

LOL - try googling that number... 07084464458 - he's evidently been around.
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Robert Domino

14 years ago

Actually, people will chargeback no matter what. Paypal is bull****.

I sold a game time card on Ebay about 2 months ago for 13.85. The buyer left positive feedback saying how the transaction went flawless. 24 hours later I get a message from Paypal saying how it was an unauthorized payment.

Yeah right. They never reimbursed me even though the person had left POSITIVE feedback.

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14 years ago

Originally Posted by Robert Domino

Actually, people will chargeback no matter what. Paypal is bull****.

I sold a game time card on Ebay about 2 months ago for 13.85. The buyer left positive feedback saying how the transaction went flawless. 24 hours later I get a message from Paypal saying how it was an unauthorized payment.

Yeah right. They never reimbursed me even though the person had left POSITIVE feedback.

The decision on whether or not a chargeback is granted is not up to PayPal. The final decision is made by the cardholder's bank. Most of the time they will side with the person that pays them the mnthly interest payments.

These credit card companies should be held accountable as accessories when fraudulent chargebacks are granted by them, but they indemnify themselves in the contract that you agreed to when you opened your merchant account (PayPal had to agree to it as well and that is why they have to pass that agreement on in their agreement with you).

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George Wright 14 years ago

Originally Posted by 07084464458

the fact remains that sell a good product that buyers will not have the chance to request for a charge back.

Sorry but that is not a fact. Fortunately for me I've never had a charge back, but it's not that my products are any better than anyone else's it's because my customers are better.

Those IMers who do tons of business with a LOT of people inevitably get charge backs from people who just like to buy stuff and do charge backs. Call them ignorant of how to refund, serial chargebackers or thieves or scum or whatever. Good products have nothing to do with them and that is what worries us here. "The Fact" is that "good products" and great customer service have nothing to with this discussion.

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Chris Worner

14 years ago

Well, irregardless of the horror stories, as has been pointed out, they are still cheaper to deal with, but it would be nice if they tackled the serial refunders as well. I dont remember receiving this email.

Chris

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14 years ago

Originally Posted by TMG Enterprises

That's weird that you just got that email, Michael. I got it about two weeks ago.

I've never had a chargeback, yet, so I didn't spend any time thinking about it but I have to agree that PayPal needs to come down a little more even-handed with things.

It seems that all someone has to do is say "oops, wasn't me" and you're stuck footing the bill. Surely they can't really believe that so many people are getting unauthorized charges?

Tina

Originally Posted by skyfox7

Well, irregardless of the horror stories, as has been pointed out, they are still cheaper to deal with, but it would be nice if they tackled the serial refunders as well. I dont remember receiving this email.

Chris

Interesting.

I would think if PayPal is instituting big changes, they would alert all of their sellers at the same time.

Also, I agree that they can charge what they like, and that they may be among the best options, but it would be nice if they would go after serial refunders and chargebackers a bit more. After all, aren't there always more buyers than sellers?

All the best,
Michael

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14 years ago

OK...

Here's sumthn.

It's old news, Michael

But seriously.

Why should Paypal take a "stance" against serial refunders?

They process payments each way. Nothing more.

Why should it be paypal's job to crack down on your/our shoddy customers?

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14 years ago

Originally Posted by JayXtreme

OK...

Here's sumthn.

It's old news, Michael

But seriously.

Why should Paypal take a "stance" against serial refunders?

They process payments each way. Nothing more.

Why should it be paypal's job to crack down on your/our shoddy customers?

Then whose job is it Jay? We have no power to do anything about it.

So who then?

Just askin.

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14 years ago

Originally Posted by Steven Wagenheim

Then whose job is it Jay? We have no power to do anything about it.

So who then?

Just askin.

It's your problem.

I can't complain at the bank who provide my merchant account.. they process payments. Nothing more.

It's your product, your business, your website, your customer, your problem.

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14 years ago

Originally Posted by JayXtreme

It's your problem.

I can't complain at the bank who provide my merchant account.. they process payments. Nothing more.

It's your product, your business, your website, your customer, your problem.

But it's not one I can do anything about. I can't refuse to offer the refund
and if it's a chargeback, it's totally out of my hands. I have no recourse at
all.

So while it may be MY problem, it is one I have no control over.

So in other words, it sucks to be us?

Seems to me there should be some kind of seller protection or do sellers
not matter?

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LB

14 years ago

Originally Posted by Steven Wagenheim

But it's not one I can do anything about. I can't refuse to offer the refund
and if it's a chargeback, it's totally out of my hands. I have no recourse at
all.

So while it may be MY problem, it is one I have no control over.

So in other words, it sucks to be us?

Seems to me there should be some kind of seller protection or do sellers
not matter?

When someone does a chargeback against Paypal it affects their merchant account so basically they are on the same side as you. At least they allow you to provide evidence so you can fight it. The decision is ultimately made by the card-issuer's bank.

What needs to happen is that when fraudulent chargebacks are filed, that people need to start getting sued in small claims for it. When someone purchases from you, gets support, you have their IP and contact info, etc. and then without warning chargebacks and pretends to not know you...that's theft and fraud and certainly worth pursuing. Most thieves count on the amount in question being so small that you won't bother.

Most of the time, they're right.

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14 years ago

Originally Posted by Michael Oksa

That seems like a fair enough question, Jay.

The way I see it, what they are doing now is taking a stance against sellers. Why should they do THAT if they're only processing payments each way?

Besides, they could certainly increase their revenue if they did something about bad buyers, too.

I don't see it as "old news" as I just received the email a few hours ago.

Ultimately, this is just my opinion, and PayPal can do what it likes.

I still plan on using them.

All the best,
Michael

I was only jokin' a little about old news

I do see your point.

But in avoiding taking a stance against bad buyers, I don't think they are necessarily taking a stance against sellers.

They are simply not getting involved in a fight that doesn't concern them. I think it is best for Paypal and their business.

It makes complete sense for them to stay out of it.

There are fields where serial refunders are a non-issue. Some of us choose to operate in fields where serial refunders are a big issue.

That is our own fault.

Originally Posted by Steven Wagenheim

But it's not one I can do anything about. I can't refuse to offer the refund
and if it's a chargeback, it's totally out of my hands. I have no recourse at
all.

So while it may be MY problem, it is one I have no control over.

So in other words, it sucks to be us?

Seems to me there should be some kind of seller protection or do sellers
not matter?

That's a very victim like mentality.

You make a choice to sell in the niches/fields that you do.

It is very easy to find a pattern of serial refunders and block IP's from your sites.

Or sell in other niches.

Or stop using Paypal.

I'm not singling you out, Steve.

Just saying that this really isn't a Paypal problem.

If you owned a restaurant, and this guy came to eat every week, ate half his meal and then complained about the quality.. so you had to waive him on the bill.. you would stop serving him, right?

Or if you sold clothing...

This lady buys a dress every week... She wears it for a Friday night out, and then returns it the next day for a refund.

You'd stop her from buying your dresses, no?

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14 years ago

Originally Posted by JayXtreme

I was only jokin' a little about old news

I do see your point.

But in avoiding taking a stance against bad buyers, I don't think they are necessarily taking a stance against sellers.

They are simply not getting involved in a fight that doesn't concern them. I think it is best for Paypal and their business.

It makes complete sense for them to stay out of it.

There are fields where serial refunders are a non-issue. Some of us choose to operate in fields where serial refunders are a big issue.

That is our own fault.

That's a very victim like mentality.

You make a choice to sell in the niches/fields that you do.

It is very easy to find a pattern of serial refunders and block IP's from your sites.

Or sell in other niches.

Or stop using Paypal.

I'm not singling you out, Steve.

Just saying that this really isn't a Paypal problem.

If you owned a restaurant, and this guy came to eat every week, ate half his meal and then complained about the quality.. so you had to waive him on the bill.. you would stop serving him, right?

Or if you sold clothing...

This lady buys a dress every week... She wears it for a Friday night out, and then returns it the next day for a refund.

You'd stop her from buying your dresses, no?

Every person who buys from me who refunds quickly enough to suspect
as a serial refunder OR puts in a chargeback saying they never authorized
the purchase, I block in DLGuard from making any future purchases.

But the horse is already out of the barn.

They did their damage and I have no recourse.

You want to call it victim mentality, fine.

I call it just plain wrong.

But again, this is just typical of anything I say.

I say white, you say green.

So none of your response surprises me.

It's just more of the same...I'm always wrong in YOUR eyes.

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14 years ago

Originally Posted by Steven Wagenheim

But again, this is just typical of anything I say.

I say white, you say green.

So none of your response surprises me.

It's just more of the same...I'm always wrong in YOUR eyes.

FFS, Steve..

Come on.

Can't we have one discussion without you saying I am getting at you?

My first post in this thread was talking to Michael. Then you replied to me. My stand in this debate was already clear before I replied to you. I didn't change just because I was replying to Lord post-a-lot.

Forget this... I was trying to have a reasoned debate with you.

I'm done. It's pathetic.

Enjoy your little pit of doom and gloom, Steve.

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E. Brian Rose 14 years ago

Originally Posted by Steven Wagenheim

and if it's a chargeback, it's totally out of my hands. I have no recourse at
all.

This is not true at all. I have filed criminal charges against people for fraudulent chargebacks. You have the option to file suit, as well.

Filing a fraudulent chargeback is credit card fraud, which is a felony offense.

You can also add to your terms and conditions that all fraudulent chargebacks or chargebacks that were filed without going through your specified refund steps will result in a $150 research fee. That fee is a binding debt and you can use collection tactics to retrieve it.

These procedures may not suit your business plan, but it is certainly not right to throw a blanket statement out there that says you don't have any recourse.
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14 years ago

Originally Posted by JayXtreme

OK...

Here's sumthn.

It's old news, Michael

But seriously.

Why should Paypal take a "stance" against serial refunders?

They process payments each way. Nothing more.

Why should it be paypal's job to crack down on your/our shoddy customers?

That seems like a fair enough question, Jay.

The way I see it, what they are doing now is taking a stance against sellers. Why should they do THAT if they're only processing payments each way?

Besides, they could certainly increase their revenue if they did something about bad buyers, too.

I don't see it as "old news" as I just received the email a few hours ago.

Ultimately, this is just my opinion, and PayPal can do what it likes.

I still plan on using them.

All the best,
Michael

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Robert Domino

14 years ago

The payment processor Moneybookers offers 100% seller protection against chargebacks and overall lower fees than Paypal. Problem is that they're established more in Europe and not as much in NA.

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Chris Worner

14 years ago

Steven seems unusually pissed off today, cant think why though :rolleyes:

Chris

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14 years ago

I don't have a problem with the fees as I know that it's far less than most merchant accounts would charge, if I could even qualify for one.

The only change I would like to see made is that sellers get more protection from those who are clearly trying to rip us off. It's not hard to determine the intent when someone goes for a refund or chargeback within the first 2 minutes.

And to be fair, as Jay (I believe) pointed out, it may not be PayPal that is doing this. Perhaps the credit card companies haven't cottoned on to the way digital business is done. Wouldn't be the only thing that hasn't caught up to new technologies.

Tina

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14 years ago

This is not true at all. I have filed criminal charges against people for fraudulent chargebacks. You have the option to file suit, as well.

Filing a fraudulent chargeback is credit card fraud, which is a felony offense.

You can also add to your terms and conditions that all fraudulent chargebacks or chargebacks that were filed without going through your specified refund steps will result in a $150 research fee. That fee is a binding debt and you can use collection tactics to retrieve it.

These procedures may not suit your business plan, but it is certainly not right to throw a blanket statement out there that says you don't have any recourse.

E, I would like to hear more details about this. I was not aware that you could file charges in this manner. Although, wouldn't that be pretty costly in terms of legal fees when you're only dealing with a $50 product?

Tina

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14 years ago

Okay, the steam has stopped coming out of my ears.

Brian, your solution isn't viable for a low end product.

Jay, yes, I understand that the niches we choose to do business in have a lot
to do with the number of chargebacks and refunds we get. And even at that,
I get very few. Monthly...I can count them on one hand (chargebacks, maybe
one per year)

Isn't the point.

The problem I have is with the attitude that THEFT (cause that's what it is)
is part of the cost of doing business and aside from banning refunders
(again, horse already out of the barn) there's not much we can do.

How about somebody with the stones enough to stand up to these banks
and say, "Hey, this person got my product, here's the date they got it,
and therefore their claim that they never got it is bullsh*t"

Maybe if somebody had the stones to do that and make a case out of all
this fraud, we wouldn't have to deal with it. Buyers would have to prove
that they didn't receive the item. And with a valid receipt and proof of
delivery or download (easy to do with physical products, not too hard with
digital) that would be impossible for them to do and we'd be able to win
these nonsense claims without having to hire a $300 per hour lawyer.

But it seems that there is ONLY buyer protection in this business, unless
you are a big time operator and can afford those $300 per hour lawyers.

Well, some of us don't run 7 figure corporations and can't afford to run
after a $47 chargeback with a high priced attorney.

Translation - "Oh well, you're screwed. Deal with it or get another line of
work."

This is the same apathetic attitude that has allowed a lot of the crap that
goes online (digital theft, spam, etc.) to go on.

Nobody REALLY wants to deal with the problem.

That's what I'm pissed about.

I don't think that's too hard to understand.

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14 years ago

Originally Posted by Steven Wagenheim

Brian, your solution isn't viable for a low end product.

How is it not viable to add a refund procedure and fraudulent chargeback clause to your terms and conditions? Why should the cost of the product matter at all? It takes you the same amount of time to deal with a chargeback response no matter how much the product costs.

Originally Posted by Steven Wagenheim

Okay, the steam has stopped coming out of my ears.

You should get that checked out. I'm not a doctor, but anything coming out of your ears sounds bad to me.

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14 years ago

Originally Posted by E. Brian Rose

How is it not viable to add a refund procedure and fraudulent chargeback clause to your terms and conditions? Why should the cost of the product matter at all? It takes you the same amount of time to deal with a chargeback response no matter how much the product costs.

Enforcing the clause takes legal help, does it not?

Who is going to collect the money for me?

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14 years ago

Originally Posted by Steven Wagenheim

Who is going to collect the money for me?

Often times a strongly worded letter letting them know that they have committed credit card fraud and pointing out the agreed upon procedures and penalties regarding your return policy, as well as threats to file a police report and hire a collection agency to ruin their credit, are enough to make the person pay up.

If you happen to have a lot of fraudulent chargebacks, there are many collection agencies that will go after your customers for a percentage of the fee that they collect.

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Dan C. Rinnert

14 years ago

Originally Posted by E. Brian Rose

This is not true at all. I have filed criminal charges against people for fraudulent chargebacks. You have the option to file suit, as well.

Filing a fraudulent chargeback is credit card fraud, which is a felony offense.

You can also add to your terms and conditions that all fraudulent chargebacks or chargebacks that were filed without going through your specified refund steps will result in a $150 research fee. That fee is a binding debt and you can use collection tactics to retrieve it.

Originally Posted by E. Brian Rose

Often times a strongly worded letter letting them know that they have committed credit card fraud and pointing out the agreed upon procedures and penalties regarding your return policy, as well as threats to file a police report and hire a collection agency to ruin their credit, are enough to make the person pay up.

If you happen to have a lot of fraudulent chargebacks, there are many collection agencies that will go after your customers for a percentage of the fee that they collect.

I like that. I don't make it difficult for reasonable people to get a refund. I really don't.

So, for someone to use a chargeback as a method of getting a refund, without first making any effort to get a refund, is just wrong. I realize that people will argue, well, the person's credit card could have been stolen and the thief used it to buy stuff, but I think most of us realize that probably the majority of chargebacks aren't due to stolen credit cards but buyer remorse or downright intent to defraud.

So, I like this suggestion. I don't want to hurt legitimate people wanting a refund. As a buyer, I've been burned on refunds before and I wouldn't want my customers to have that same experience with me. But, if someone is going to use a chargeback fraudulently, I don't have any qualms about going after them.

And, I would do it on principle or to make an example of some of these people.

Chargebacks are supposed to protect the consumer against fraud or unscrupulous sellers. But, when people use chargebacks fraudulently, I'm glad to know that there is some recourse that can be used against them.

And the bonus is that this is something that can be implemented that doesn't hurt or make things difficult for legitimate buyers.

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Frank Donovan

14 years ago

Originally Posted by E. Brian Rose

If PayPal aggressively went after buyers, then you would have a bunch of PayPal Buyer Horror Story websites and that would hurt us all.

Excellent point. Some sellers don't appear to realize that it's actually in their interest for PayPal to be as buyer friendly as is feasible.

Steven,

The problem I have is with the attitude that THEFT (cause that's what it is) is part of the cost of doing business and aside from banning refunders (again, horse already out of the barn) there's not much we can do.

Any business selling goods has to factor in a degree of theft. Offline retailers call it 'shrinkage' and allow for a percentage in their profit forecasts, while still working to reduce it and minimize its impact. It is a fact of doing business. Always has been. Always will be.

Frank

EDIT: Tina, you beat me to it with a similar point.

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webfighter

14 years ago

Guess I'm not a "valued customer" for them LOL.

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14 years ago

Now, enter a third party, in this case PayPal, that makes you pay extra to have somebody steal from you - without doing much (if anything) to go after those same thieves. That's where I see as the main issue.

You do realize that if PayPal steps in to do more about the theft, our rates are going to do a lot more than double, right? I'd rather take care of the issue on the other end of things, with banning IPs or the like, than to pay more to PayPal to do it for me.

Tina

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14 years ago

Originally Posted by TMG Enterprises

You do realize that if PayPal steps in to do more about the theft, our rates are going to do a lot more than double, right? I'd rather take care of the issue on the other end of things, with banning IPs or the like, than to pay more to PayPal to do it for me.

Tina

I agreee, for the most part.

However, while you can block a serial refunder, it doesn't keep them from doing the same thing to other people. I think there should come a point when PayPal does ban a buyer's IP. It doesn't have to be all that expensive to implement either.

Plus, if it reduces refunds, that could more than take care of any rate increase (if there were one). I think it could be done in a way that wouldn't have to double our rates. Not sure what that is, but I think it could be done.

All the best,
Michael

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Tina Golden 14 years ago

Well, that would actually make the most sense for PayPal, too, I should think. They have to waste their resources dealing with this stuff so if someone is doing it multiple times, yes, I agree, then PayPal should do something about it.

Shouldn't be too difficult to put in a tracking system and not allow someone to do beyond a certain number of refunds within a specified period of time.

Tina
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