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Paypal "Payment Reversal"? WTF?

by KenTheriot
31 replies
I sold a video course last week through 1SC. This week, Paypal is reporting that the person who bought it has "reversed Payment." I've never heard of this happening before. How can someone just buy something and then steal their money back?

Does anyone have any advice for me?

I contacted the person right after his purchase and thanked him, also asking if everything was to his satisfaction. I never got a reply.

I did not offer a refund for this product, nor did this person ask for one (I would have been happy to if he was dissatisfied).

Sheesh.

Any guidance appreciated.

Thanks.

Ken
#payment reversal #paypal #wtf
  • Profile picture of the author AndyBlackSEO
    It happens. Sometimes it is genuine and other times people are just trying to get a free product.

    In your Paypal Resolutions Centre does it give any more info, as in a reason for the reversal. Was it a bank charge back or a Paypal reversal?

    All you can do is state the facts in the Resolution Centre by responding. It often goes in the buyers favor when it is a digital product, but not always.

    Andy
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  • Profile picture of the author Shaun OReilly
    It's an unfortunate part of this business.

    If someone pays via PayPal, they can request a refund
    from you (or via PayPal) or they can dispute the validity
    of the payment with PayPal or their bank/credit card
    company.

    It sounds like the person falls into the latter camp.

    It's wrong and it sucks. But it comes with the territory.

    I've had this happen to me as a seller, so I know how it
    feels.

    My advice?

    Move on.

    Let it go.

    Focus on serving your prospects and customers who actually
    want to pay you money, rather than wasting your time on
    those who want to avoid giving you money.

    PayPal will likely side with the person disputing the payment
    anyways.

    Focus on what you CAN control.

    Dedicated to your success,

    Shaun
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    • Profile picture of the author Gaz Cooper
      As has been said you will get people like that that will try and steal your product and unfortunately Paypal has very tight policy on digital products and they will refund if asked to do so for a tangible product they are better if you can prove delivery.

      Best thing is stay positive and move on its part of the business and there are way more honest people that dishonest.

      It much better focusing on getting more sales than chasing and wasttng energy on someone that is not worth it.

      Gaz Cooper
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  • Profile picture of the author Scott Skinner
    Hello Ken,

    I agree with everyone else who commented. Forget it and move on. It is a fact of life not only with PayPal but also with the people.

    I would recommend moving away from PayPal into a regular internet payment or merchant account. Good Luck...
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    • Profile picture of the author taylormarek
      Originally Posted by ScottSkinner View Post

      I would recommend moving away from PayPal into a regular internet payment or merchant account. Good Luck...
      I second that point. Move to a merchant account. At least there you are protected.
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      • Profile picture of the author Johnny Slater
        Not even close to being true. If you accept any kind of payment, PayPal, Clickbank, Moneybookers, etc. or have a merchant account it doesn't matter.

        If you accept credit card payments then you will have chargebacks every once in a while. There is no way to prevent that from ever happening.

        You best bet is instead of worrying over not getting chargebacks to use a payment processor that will at least work on your behalf when you can clearly show you are in the right.

        Originally Posted by taylormarek View Post

        I second that point. Move to a merchant account. At least there you are protected.
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  • Profile picture of the author Chris Worner
    If you have an attorney, why not have him/her draw up a very polite letter and fax it to the banks legal department informing them that you have a no refund policy and that by reversing this transaction they are aiding and abetting a fraudulent transaction which is in violation of the law.

    I have heard of several warriors using this technique with great success.

    Chris
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    • Profile picture of the author Gary King
      Originally Posted by Chris Worner View Post

      If you have an attorney, why not have him/her draw up a very polite letter and fax it to the banks legal department informing them that you have a no refund policy and that by reversing this transaction they are aiding and abetting a fraudulent transaction which is in violation of the law.

      I have heard of several warriors using this technique with great success.

      Chris
      It would depend on the cost of the product.

      If it's a $37 sale, you'll likely spend more than that getting the lawyer to draw up the papers. Although sometimes, it's worth it. I had a friend file a case against a company that cost him about $1,000 US to do... the collection was for $250.

      It was the point of the matter for him. Bad financial decision IMHO, but gave him the satisfaction of holding them accountable.

      Sorry Ken - it stinks to have this happen, but as others have said, don't dwell on it - if you have any way to block this person from future purchases of your products, do so.

      All success,

      Gary
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  • Profile picture of the author Caleb Spilchen
    I have a funny story... We're selling a backlink packet right now, and I guess someone didn't have the $5 to pay for it.

    When they got to paypal, they changed some numbers to 0.01. Lucky for me, Rapid Action Profits blocked the transaction, so we ended up with an extra penny, and the guy no files. Surprising how people try to bypass the system with stupidity like that. PayPal said they don't deal with things like that, why am I not surprised!

    Caleb
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  • Profile picture of the author Chris Worner
    Gary, the point is once you have one drawn up, you can use it as a cookie cutter for any future identical situations, you do not need a new one drawn up every single time.

    Think of it as a long term investment.

    Chris
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    • Profile picture of the author Gary King
      Originally Posted by Chris Worner View Post

      Gary, the point is once you have one drawn up, you can use it as a cookie cutter for any future identical situations, you do not need a new one drawn up every single time.

      Think of it as a long term investment.

      Chris
      Sure Chris, absolutely! It's just also important to realize that this will happen and you can waste a lot of time chasing it for little reward. I'm not saying roll over and play dead, just don't put yourself out of business chasing stuff -

      In the immortal words (paraphrased) of Paul Myers:

      "Is what I'm doing RIGHT NOW moving me forward more than anything else would?"


      Originally Posted by Caleb Spilchen View Post

      I have a funny story... We're selling a backlink packet right now, and I guess someone didn't have the $5 to pay for it.

      When they got to paypal, they changed some numbers to 0.01. Lucky for me, Rapid Action Profits blocked the transaction, so we ended up with an extra penny, and the guy no files. Surprising how people try to bypass the system with stupidity like that. PayPal said they don't deal with things like that, why am I not surprised!

      Caleb
      It's happened to me too Caleb. An unencrypted paypal button lets people see the code in the web page and they can change the price.

      Your implementation of price verification is the only way to stop it. I had a guy change a payment amount once to 1 cent. My download protector caught it and didn't send the link.

      I kept his penny too. lol
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      • Profile picture of the author FredJones
        Did Paypal actually reverse the charge?

        AFAIK, Paypal will only look into whether the promised goods were delivered, and not at whether they met the quality. So if you can send over the proof of delivery (which may not be easy for a digital good but you may still have a shopping cart with some host if you are lucky) then you may be able to get your money back.
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        • Profile picture of the author JohnMcCabe
          Ken, I had it happen to me once. Turned out the woman's kid used her account without permission. She saw the charge, didn't recognize it, and issued a dispute. Once she knew it was a legitimate charge, she dropped the dispute.

          Originally Posted by Caleb Spilchen View Post

          When they got to paypal, they changed some numbers to 0.01. Lucky for me, Rapid Action Profits blocked the transaction, so we ended up with an extra penny, and the guy no files. Surprising how people try to bypass the system with stupidity like that. PayPal said they don't deal with things like that, why am I not surprised!
          Caleb, PayPal is a payment processor. When someone sends a properly formatted request for payment, their software processes it and issues the appropriate notifications. They 'don't deal with things like that' because it's out of their control. Can you imagine the chaos if, every time someone sold something, PP had to go out to the sales page, parse it for the published price and verify it matched the price in the button?

          You can use your own solutions, like RAP, or you can encrypt the buy button. Or accept that, like shoplifters in a retail store, some lowlife grifters are going to steal a cookie from your jar...
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  • Profile picture of the author patJ
    I've had a few of those. There's not much you can do unfortunately.
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  • Profile picture of the author taylormarek
    Could be a person wanting their money back and a free product or it could be Paypal messing around with you. Either way, I would advise against using Paypal for payments period. You have no protection.
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  • Profile picture of the author Istvan Horvath
    It happens. I woke up today and see an open dispute in PP with the following message:

    I wrote you a message requesting a refund within 4 minutes of purchasing the product, because it is not what I thought it was..
    (I didn't receive the refund request but that's not the point...) The customer bought my 8 videos and you'd need more than one hour to watch them. I have no idea how he knew "within 4 minutes" what it was but it's not worth arguing. Refunded and closed the dispute.
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  • Profile picture of the author Chris30K
    Paypal freakin sucks, I don't know if they can affect your credit though, anybody know?
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    • Profile picture of the author Alan Petersen
      Originally Posted by Chris30K View Post

      Paypal freakin sucks, I don't know if they can affect your credit though, anybody know?
      What's that have to do with PayPal? It's customer initiated. Credit card companies are the same. Very easy for low-life's to abuse the charge back system.

      I had a guy buy an ebook with his credit card via PayPal, 4 or 5 months later he filed a charge back with his credit card.

      His credit card moved forward but PayPal said no way. Past their refund policy and they had history that I refunded once on something else after he filed a dispute vs. just contacting me (he was a serial refunder so I've now blocked him from buying from me again)... anyway, the charge back was denied and he didn't get to abuse the system. Thanks to PayPal.

      All this over a $19 ebook. I would have just refunded to get the pest to go away but I'm glad PayPal said hell no.

      Gave me a little satisfaction. So PayPal does some good stuff as well. It's not all bad and evil as some think.
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  • Profile picture of the author Geek3
    So sorry for you, man... it's a catch 22... so easy for a buyer to pull a refund for any reason, but PayPal is also the best web method of making transactions (especially for impulse buys).
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  • Profile picture of the author Lisa Gergets
    Welcome to IM and to Paypal. LOL

    Your best bet is to simply refund the guy and close the report. You won't win against Paypal.
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    • Profile picture of the author Johnny Slater
      Sorry Lisa, but you are wrong on this issue.

      I have fought and won every chargeback I have ever recieved, other than one.

      I have fought every refund request that was initiated on a purchase where I had a no refund policy, and won every one of them except one.

      PayPal does not have buyer protection on digital products. If you show that your product is delivered digitally, that you have a protected member area that requires a log in, and that your customer did in fact log into your member area then you can pretty much win any PayPal dispute or chargeback. It's never a 100% deal when messing with PayPal but there are ways to guarentee that you almost never lose a disupte or chargeback.

      Originally Posted by Lisa Gergets View Post

      Welcome to IM and to Paypal. LOL

      Your best bet is to simply refund the guy and close the report. You won't win against Paypal.
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      • Profile picture of the author Steve Holmes
        Originally Posted by Johnny Slater View Post

        Sorry Lisa, but you are wrong on this issue.

        I have fought and won every chargeback I have ever recieved, other than one.

        I have fought every refund request that was initiated on a purchase where I had a no refund policy, and won every one of them except one.

        PayPal does not have buyer protection on digital products. If you show that your product is delivered digitally, that you have a protected member area that requires a log in, and that your customer did in fact log into your member area then you can pretty much win any PayPal dispute or chargeback. It's never a 100% deal when messing with PayPal but there are ways to guarentee that you almost never lose a disupte or chargeback.
        Do you do this with WSO's also?
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        • Profile picture of the author Johnny Slater
          Yes, everything I sell or give away is handled via a protected member area controlled by a quality membership script.

          Originally Posted by Steve Holmes View Post

          Do you do this with WSO's also?
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  • Profile picture of the author WeavingThoughts
    Happened to me a couple of times.

    Each time I started a dispute and won because Paypal is concerned only with delivery and not with the quality of the goods.

    It was a different matter that whenever quality was a concern(maybe 1 in 1000 orders or rarer), I myself refunded the money.
    However, when the client is a cheat, you can always use the quality = irrelevant trick using Paypal Dispute and win.
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  • Profile picture of the author Steve Holmes
    I've lost about $500 in the past month from this - I don't think there is much you can do about it.

    Paypal don't care about digital products, if you try to dispute the claim it will ask for order tracking and of course - you won't have one.

    Shame WSO Pro doesn't allow you to track the ip that downloads the file but even then, there are ways around that for the buyer.

    You have to ask if it's worth your time to pursue and also, what results do you think you would get even if you did?

    I have video templates to create and I have to choose one or the other, helping my business grow or... some sort of revenge mission?

    Paypal have to do their part too, but won't.

    My advice is leave it to Karma and get on with the things YOU CAN control.

    Steve
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  • Profile picture of the author Zeus66
    This happened to me about a month ago for the first time in over 10 years of having a PP account. I called and the guy at PP told me he couldn't divulge the details, but the person in question probably had had their account info stolen and the charge was fraudulent. How they knew that within like 20 minutes of the transaction, I have no clue. I assume the rightful owner just happened to notice the charge and immediately complained.

    John
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    • Profile picture of the author Silas Hart
      If you have never heard of Payment Reversal's, you must be new to the game.

      2 out of 10 purchases for digital products will be payment reversals. It's actually 28%. You can lower this rate by shipping something with tracking to your customers so that it's harder for PayPals automated system to always favor the buyer. You will lose some even with tracking. Those doing chargebacks through their credit card companies will always have the upper-hand.

      28% is actually optimistic, most have higher forced refund rates than me.
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      • Profile picture of the author Sid Hale
        Hi Fajeeb,

        Originally Posted by FaJeeb View Post

        If you have never heard of Payment Reversal's, you must be new to the game.

        2 out of 10 purchases for digital products will be payment reversals. It's actually 28%. You can lower this rate by shipping something with tracking to your customers so that it's harder for PayPals automated system to always favor the buyer. You will lose some even with tracking. Those doing chargebacks through their credit card companies will always have the upper-hand.

        28% is actually optimistic, most have higher forced refund rates than me.
        No. They don't.

        Refund rates are no higher than with any other payment processor. I'll give you the benefit of the doubt, and assume that you're selling a quality product, but if you're experiencing 20+% (or anything near that) you might want to evaluate where your buyers are coming from.

        Your traffic sources can have a lot to do with both the level of sales and with the rate of returns.

        What Paypal shows as a Payment Reversal, is even more rare (I've had only one in over 8 years), and can occur for a number of reasons (including a few that they don't disclose, for privacy reasons).
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  • Profile picture of the author J Bold
    You should be happy.

    The more refund requests you get the more sales you get. If you are getting a few, just a sign you are doing good!

    At least that's how I'd look at it.

    It happens. Don't worry about it.
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  • Profile picture of the author donkey097
    i had one the other day, as soon as they bought it, they downloaded and requested the refund. 95% of people do it the right way, i just didnt take any notice, its just an unfortuante part of business
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  • Profile picture of the author taylormarek
    I agree with those points Johnny. I wasn't meaning "protected" in the sense of buyer chargebacks but in the sense of Paypal screwing you over. It happened to me, which is why I don't recommend Paypal and prefer an official merchant account.
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