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Paypal Keeps Flagging My Sales As Unauthorized!

by nicheblogger75
13 replies
This is getting frustrating. 3 times in the last week Paypal has held funds form a sale claiming that they think it was not authorized by the buyer. The first two times I simply closed the case and refunded the money. The second time I got an email from the buyer thanking me for the free product! WTF??? That's when I started to think that Paypal might be wrong.

Now it's happened again and this time I'm not refunding the money. I'm going to let Paypal do their little investigation, and discover that is was not a fraudulent sale. I know it wasn't because I already got a nasty email from the buyer asking why he did not get his download. I replied that Paypal was holding the funds pending an investigation, and he was NOT happy.

This is getting old REAL fast. I'm getting sick of losing money due to Paypal. It's not like I don't already pay them a ton in fees every month.

Does anyone have any experience with this happening to them? I mean, I do 400 plu s transactions per month, and it's never happened before. Now all of a sudden it's happened 3 times in one week??? What the heck is going on over there?

May be time to start looking for an alternate method of collecting payment? Anyone have any good ideas about that?

Thanks.
#flagging #paypal #sales #unauthorized
  • Profile picture of the author nicheblogger75
    Originally Posted by DianaHeuser View Post

    Thanks for pointing me to that thread. Ya know, if it is indeed an unauthorized transaction, I have absolutely no problem refunding the buyer who got scammed. But it makes no sense that Paypal just automatically decides to do an investigation just because they "think" it was an unathorized transaction. Wouldn't it be prudent to let the buyer contact them first instead of just assuming that it was unauthorized? I was under the impression that you should just refund the payment and close the dispute, but now I'm going to take my chances fighting them. At least then I have a 50/50 chance of geting paid for my product.
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    • Profile picture of the author Dee Scofield
      This has happened to me several times. Like you, I would refund the payment to the buyer, even though I knew it was a legitimate sale. Hard to argue with PayPal.

      But this last time I simply did nothing. Within a week, I got an email from PayPal saying that they'd concluded their investigation and added the funds back into my account.

      I can't say for sure why a particular transaction gets flagged in the first place. But in my case, when I've paid attention, I've noticed that there's usually some kind of small incongruency in the transaction. For example, perhaps the address the buyer gave didn't exactly match their billing address. Since I'm not shipping physical products this doesn't matter to me, but apparently it does to PayPal.

      But, at the end of the day, that's just a guess. PayPal will never tell us for sure why they do some of the things they do. As long as you don't have a large number of disputes and chargebacks, the occasional 'investigation' doesn't appear to be a serious matter.
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      • Profile picture of the author nicheblogger75
        Originally Posted by Dee Scofield View Post

        This has happened to me several times. Like you, I would refund the payment to the buyer, even though I knew it was a legitimate sale. Hard to argue with PayPal.

        But this last time I simply did nothing. Within a week, I got an email from PayPal saying that they'd concluded their investigation and added the funds back into my account.

        I can't say for sure why a particular transaction gets flagged in the first place. But in my case, when I've paid attention, I've noticed that there's usually some kind of small incongruency in the transaction. For example, perhaps the address the buyer gave didn't exactly match their billing address. Since I'm not shipping physical products this doesn't matter to me, but apparently it does to PayPal.

        But, at the end of the day, that's just a guess. PayPal will never tell us for sure why they do some of the things they do. As long as you don't have a large number of disputes and chargebacks, the occasional 'investigation' doesn't appear to be a serious matter.
        Not that I'm happy that it's happened to you, but it's good to know it's not an isolated incident with my account. I spoke with a rep the last time it happened and was told that my account is in great standing, as my refund rate is lower than .5%.

        However, there have been 3 of these investigations opened in the last week on my account. It may just be that I did a large number of transactions this month and I guess those discrepancies in the email and billing address are bound to happen once in a while when you have a large number of transactions.

        I don't plan on arguing with them, but I am not just going to refund the money anymore, either. I'm going to let them do their investigation in hopes they find the transaction was legitimate and return the money to my account.
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  • Profile picture of the author George Wright
    I've had that (OP problem) happen twice.

    I've had two of my accounts shut down.

    A phone call always (so far) has had things fixed within hours.

    I suggest you call them and simply ask them to check things out, explaining your position on the matter and keep asking for "someone else" until it gets fixed.

    George Wright, P.S. (my opinion) Be Nice.
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    "The first chapter sells the book; the last chapter sells the next book." Mickey Spillane
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    • Profile picture of the author nicheblogger75
      Originally Posted by George Wright View Post

      I've had that (OP problem) happen twice.

      I've had two of my accounts shut down.

      A phone call always (so far) has had things fixed within hours.

      I suggest you call them and simply ask them to check things out, explaining your position on the matter and keep asking for "someone else" until it gets fixed.

      George Wright
      Well, they have not put my account on hold for any of these. Why would they? I can't control if someone who buys from me is doing a fraudulent purchase. There is no way I could know that, so why would they punish me for it?

      I did speak to a rep and they informed me to just refund the payment and close the dispute, which I did twice. However, I'm not sure that is the right course of action for me, especially since the buyer actually contacted me on the second one and thanked me for giving them a free product.

      Not the buyer's fault, but that kind of rubbed me the wrong way. Here I am thinking that I was refunding a payment to someone who got scammed, all the while I was giving back money from a legitimate transaction.

      Sure, once in a while it's the cost of doing business online, but I've lost $75 this week already. I can't just refund the money anymore. I need to let them do the investigation. However, I am afraid that if I keep letting them do the investigation, they will shut down my account. Kind of a lose-lose situation for me I guess.
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      • Profile picture of the author bluetechseo
        I know exactly how you feel paypal are very nervous when it comes to downloadable products. Paypal's system only works best when there is a physical item that is posted.

        I have even had an account shut down due to selling e-books about 4/5 years ago, but I think they have gotten used to people selling these types of products now.

        Just 2 years ago when I was running my own content company I had a large payment from a customer ( a few thousand dollars ) which was held for 2 weeks while they investigated me and my client before releasing the money.

        I am not a scammer but an honest business man, but I have to use techniques such as having many different paypal accounts all linking to each other just to protect myself from them.

        A good alternative is using 2checkout as this is a merchant service that allows you to recieve money from paypal.

        Lastly I would fight every case with them and not refund any money, if you have 400 transactions a month with them you will be considered a valuable customer so they shouldnt shut your account down.

        Get one of these paypal e-books that tell you how to set up many accounts they are very informative, if you cant find one I can send you mine.
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        • Profile picture of the author nicheblogger75
          Originally Posted by bluetechseo View Post

          I know exactly how you feel paypal are very nervous when it comes to downloadable products. Paypal's system only works best when there is a physical item that is posted.

          I have even had an account shut down due to selling e-books about 4/5 years ago, but I think they have gotten used to people selling these types of products now.

          Just 2 years ago when I was running my own content company I had a large payment from a customer ( a few thousand dollars ) which was held for 2 weeks while they investigated me and my client before releasing the money.

          I am not a scammer but an honest business man, but I have to use techniques such as having many different paypal accounts all linking to each other just to protect myself from them.

          A good alternative is using 2checkout as this is a merchant service that allows you to recieve money from paypal.

          Lastly I would fight every case with them and not refund any money, if you have 400 transactions a month with them you will be considered a valuable customer so they shouldnt shut your account down.

          Get one of these paypal e-books that tell you how to set up many accounts they are very informative, if you cant find one I can send you mine.
          I do appreciate the offer and the advice. I was under the impression you could only have two Paypal acounts, a business/premier and a personal.

          I rarely have a problem with them, but this is one that I have not encountered before.

          If you could PM me with that ebook, I'd greatly appeciate it.

          As for 2CO, I have read about a lot of people having big problems with them lately. I'm thinking of ponying up the $50 and opening a Clickbank account as a back-up.

          I could also use Google checkout with my E-Junkie account. I'd rather use Clickbank, though, because then I could still accept Paypal.
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  • Profile picture of the author bluetechseo
    Buzz me an email to hanafi@bluetechseo.co.uk

    Can't PM Yet.
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  • Profile picture of the author MaryAnnF
    Paypal is not the only one with problems at least they notify you

    some merchant account processors simply take the money and run without you noticing until its too late

    unfortunately its hard to prove a online sale is legit since theres a lot of CC fraud out there
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    • Profile picture of the author nicheblogger75
      Originally Posted by MaryAnnF View Post

      Paypal is not the only one with problems at least they notify you

      some merchant account processors simply take the money and run without you noticing until its too late

      unfortunately its hard to prove a online sale is legit since theres a lot of CC fraud out there
      That's true. I've contacted the buyer and they are going to contact Paypal. It still doesn't make sense to me to have a flagging system for a transaction even when a buyer has not complained.

      I can see if a buyer contacts them and questions a transaction, but there is no way they should just be flagging them on a hunch.

      The more I think about it, the more ludicrous it seems.
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  • Profile picture of the author webgineering
    Certainly Paypal does tie itself up in knots. My recent issue was the reverse - I bought some software - paypal then issued me a fraud suspicion email to say reversed and cencelled transaction - - -they then took the money from my account a few days later - held onto it - not passed to seller - conducted an investigation - then returned funds about 15 days later!! One thing I did was use the 'louise help' and say NO to her did this resolve your issue - then at least got to speak to them by phone. Just a tip hope it may be useful if not known.
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  • Profile picture of the author ezmystic
    You could try a different pay system like goldpay I think it is, or neteller, don't know if they are as good for IM stuff though
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  • Profile picture of the author nicheblogger75
    Guys, thanks for sharing your personal experiences with this. I could change payment processors, but it would probably be a bad idea and somehtng that should only be done if completely necessary. After all the BS I think I'll just have to grin and bear it. I just wish they had some kind of close competition so that us marketers had a few good choices.
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