How To Avoid Payment Reversals & Fraud Payments with PayPal For Digital Product Selling Business?

Remind the PayPal people that this is a digital product that has already been downloaded.

PayPal is not supposed to be offering Buyer Protection on Digital Products.

Be sure that your Refund Policy on your website is crystal clear. If you don't want to give refunds, say so, and say it clearly. Then point the PayPal people to that Policy page.

This will help you win most cases, unless it was a fraudulent transaction and in that case, there is nothing you can do to win.

Although I can't answer your question directly.

You could try using another payment processor. I've setup Google Checkout easily. They might be more on the merchant's side. I can't say from experience though.

Or, code in some sort of activation into the scripts. Then if someone wants a refund you kill their site.

Chargebacks are part of life. Like someone buying an IM product then asking for a refund after learning all the info. As long as they are a low enough % of total business you'll be fine. Also, if a person wants their money back PayPal will take their side. They want the Buyers happy first.

In normal cases, disputes, etc, paypal will never give the money back to the buyer. But, for chargebacks, the decision is at the bank, which, in most cases, won't trust paypal security and will decide in favor of their client.

On unauthorized payments, paypal will investigate and will decide in favor of buyer even if it is their responsability to ensure maximum security, and the password safety should be their problem.

However, if someone breaks into your account and use your money you won't be happy. In the first place, the buyer never intended to use your software. He was used by the scammer to get access to your product. But because the hacker downloaded a copy of your product, does not generate you so much losses because he would have never paid for it with his own money. Only that he will use it without your concern.

However, if you track the usage, and you have enough data that the account holder is the same person who use the software purchased, then paypal should be aware about this. If you built a system to track usage, think of a system to limit usage from your side. For example, make some needed data or files available only from your server, based on a licence or api key.

It always happens. All the buyer has to do is to click the Issue refund button but we have to struggle a lot.

So all you have to do is Not to worry as it s normal and submit your Item sent proof remind PayPal that it was a "digital" product and never look at it.

but be aware if you get any emails from PayPal to reply to any conversations or To take a action or the dispute will be claimed in the buyer's favor.

And yes to avoid refunds, Stay in contact with the buyer and Try to understand their problems and try to solve them as Buyers are not crazy to ask for refund just to get their money back.

Cheers!

GOLDEN SOLUTION:
Don't use PayPal. Use Liberty Reserve.
Ask your clients to get the currency converted.

Also, I know a way to evade and avoid chargebacks, but it requires some resources.

Regardless of all the what-ifs, it sounds like that most of the frustration is coming from Paypal. Do your due diligence to ensure you have clear policies on your website and if everything is good on your end, change your payment processor. There are many other companies happy to earn your business and fight for the side of the vender vs the consumer, unless of course it truly is a fraudulent transaction.

I met this situation and you first need to know, Paypal are against digital products, websites trading etc.

If you were to make a digital deal, is it better to send an invoice privately to your client, insist that on the note box "this digital product is an intangible goods, no refund, etc".

I rather had dispute after then.

The Penny Auction industry is a prime example of this. We have seen people destroy businesses because they will chargeback BIG $$$ and PayPal with automatically process it because they bought "bids" which cannot be proven it was delivered. So a PA site will send product won then get the money given to them taken away and be out product + revenue. Then they may have any additional money held for months while PayPal decides what to do with there account. Seem like a very bad hole in the system.

You lost because they were CC claims where PP sides with the buyer regardless.

I am not satisfied with paypal .Few days I sold a site and the buyer downloaded it.Then he opened a dispute saying that he did not authorize the transaction.Then I uploaded 2 live proofs showing that he authorized........But they surprisingly took the spammer side without any logic though I provided strong proofs of being cheated.

Finally I sent a mail asking the reason of refunding the cheat buyer but I got auto message saying that they are happy to help me further etc. etc! The reply is fully irreverent to my query

You can never be save from chargeback or reversals even if you adhere to all the rules.

Thanks for ur post. Lot of people like us will be helpful by it. I am sorry to say I have no answer to ur question. But I shall share my experience as soon as I get the answers. Best of Luck.

As a writer, I've had assholes who would try to get work done for free by filing disputes saying, "oh, I never got anything."

It's simple really: DO NOT use their retarded automation tool, you will not win. I'm not even sure a human eye looks at that thing. It'll just assume it was a physical product that you never sent and you will never win any of those cases.

Call up PayPal, explain to them it was a virtual good and that it was sent. Most of the time, they don't even ask any questions and they just reverse it in your favor.

HOWEVER, if someone pays via a Credit Card, then just give it up and move on. Credit Card companies could give a rats ass who's actually at fault and they'll usually favor the buyer most of the time just to keep them happy. PayPal doesn't handle Credit Card disputes unfortanutely, that's all up to the CC company.

I recently lost nearly $300 because while PayPal was fighting for me, the Credit Card company reversed it in favor of the buyer. I provided all the proof I could to the reps and they believed me, but in the end the buyer wins because it's all up to the CC company.

I really wish there was a way to know when they were using a CC or to block them altogether.