If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account?

Mark Brian · 06-24-2009, 02:27 PM

One of my web design clients got his funds frozen for a refund claim, Paypal says he needs to prove he shipped the item before they release the funds...

My question is since Paypal pretty much have a "valid" reason for freezing accounts, what's the situation like if we use a real merchant account like Authorize.net? Will they also freeze our account for chargebacks like those?

Garch · 06-24-2009, 04:21 PM

That's a good question. Can't answer it as we have not received any chargebacks on our merchant account.

Mark Brian · 06-25-2009, 02:29 AM

Yeah, I want to know if it's worth getting a merchant account if they won't freeze the account in case of refunds like Paypal does.

Anyone can shed a light?

Brad Gosse · 06-25-2009, 06:22 AM

My private merchant account deposits money into my business bank daily. When I have a refund request it doesn't go to the bank it comes to me.

Only chargebacks go through the bank and they don't allow those very much anymore. The buyer has to make a strong case for non delivery. THey will freeze the chargeback funds for sure

globalpro · 06-25-2009, 07:10 AM

Brad,

Who/what are you using for a merchant account?

Thanks,

John

kempos · 06-25-2009, 07:36 AM

Hi,

I think they will freeze the amount that is disputed. Not the whole account (is this the case with your client?

If only the funds disputed got frozen then it is pretty normal and it will probably happen even with merchant accounts.

Quentin · 06-25-2009, 08:51 AM

What will happen with a merchant account is if you get to many complaints they will ask for it to be underwritten.

What this means is you will be asked to put a certain amount into an account to cover any discrepencies. This is what they did to us and why we use 3rd party merchants like Paypal etc.

Its a lot easier with Paypal as all you have to do is prove the products were delivered and in most cases they will approve or act on your behalf.

So when you send out the product make sure you keep a receipt. If digitally delivered we keep the ip and download times for the product and send it in PDF. It has their name, email, IP and number of times they downloaded it.

Quentin

INFOSEEKER-2009 · 06-25-2009, 10:12 AM

Quote:

Originally Posted by Brad Gosse

My private merchant account ... chargebacks go through the bank and ... THey will freeze the chargeback funds for sure

Your right about that Brad,

Like any other payment processor, Chargebacks have to be covered and paid by somebody ... and it's not the "Payment Processor" ... lol

Have a Great Summer Everyone !

.

seasoned · 06-25-2009, 10:36 AM

Authorize.net is a GATEWAY(TO a merchant account), NOT a merchant account! They FACILITATE accepting credit cards, but do NOT actually do it!

Merchant accounts WILL hold funds, and handle chargebacks, like paypal! They may EVEN shut down your account entirely if you don't show the proper concern, or have too many.

Steve

06-24-2009, 02:27 PM	#1
Mark Brian Spartan Warrior War Room Member Join Date: Jul 2008 Location: PH Posts: 689 Thanks: 56 Thanked 60 Times in 36 Posts	If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? One of my web design clients got his funds frozen for a refund claim, Paypal says he needs to prove he shipped the item before they release the funds... My question is since Paypal pretty much have a "valid" reason for freezing accounts, what's the situation like if we use a real merchant account like Authorize.net? Will they also freeze our account for chargebacks like those?

06-24-2009, 04:21 PM	#2
Garch Active Warrior Join Date: Jun 2009 Location: Northeast USA Posts: 42 Thanks: 0 Thanked 0 Times in 0 Posts	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? That's a good question. Can't answer it as we have not received any chargebacks on our merchant account.
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06-25-2009, 02:29 AM	#3
Mark Brian Spartan Warrior War Room Member Join Date: Jul 2008 Location: PH Posts: 689 Thanks: 56 Thanked 60 Times in 36 Posts	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? Yeah, I want to know if it's worth getting a merchant account if they won't freeze the account in case of refunds like Paypal does. Anyone can shed a light?

06-25-2009, 06:22 AM	#4
Brad Gosse Senior Warrior Member War Room Member Join Date: Jan 2009 Location: Orangeville, Ontario Posts: 1,202 Thanks: 166 Thanked 164 Times in 107 Posts Social Networking	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? My private merchant account deposits money into my business bank daily. When I have a refund request it doesn't go to the bank it comes to me. Only chargebacks go through the bank and they don't allow those very much anymore. The buyer has to make a strong case for non delivery. THey will freeze the chargeback funds for sure
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06-25-2009, 07:10 AM	#5
globalpro John Burnette War Room Member Join Date: Aug 2007 Location: S.E. USA Posts: 532 Thanks: 94 Thanked 68 Times in 58 Posts	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? Brad, Who/what are you using for a merchant account? Thanks, John
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06-25-2009, 07:36 AM	#6
kempos Active Warrior Join Date: Jun 2009 Posts: 48 Thanks: 3 Thanked 5 Times in 5 Posts	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? Hi, I think they will freeze the amount that is disputed. Not the whole account (is this the case with your client? If only the funds disputed got frozen then it is pretty normal and it will probably happen even with merchant accounts.
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06-25-2009, 08:51 AM	#7
Quentin DIY Internet Marketing War Room Member Join Date: Jul 2002 Location: Australia. Posts: 3,234 Blog Entries: 9 Thanks: 1 Thanked 179 Times in 92 Posts Social Networking Contact Info	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? What will happen with a merchant account is if you get to many complaints they will ask for it to be underwritten. What this means is you will be asked to put a certain amount into an account to cover any discrepencies. This is what they did to us and why we use 3rd party merchants like Paypal etc. Its a lot easier with Paypal as all you have to do is prove the products were delivered and in most cases they will approve or act on your behalf. So when you send out the product make sure you keep a receipt. If digitally delivered we keep the ip and download times for the product and send it in PDF. It has their name, email, IP and number of times they downloaded it. Quentin
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06-25-2009, 10:36 AM	#9
seasoned Senior Warrior Member War Room Member Join Date: Jan 2003 Location: , , USA. Posts: 9,928 Thanks: 58 Thanked 81 Times in 69 Posts	Re: If Paypal Freezes Accounts for Refunds or Chargebacks... How About in a Merchant Account? Authorize.net is a GATEWAY(TO a merchant account), NOT a merchant account! They FACILITATE accepting credit cards, but do NOT actually do it! Merchant accounts WILL hold funds, and handle chargebacks, like paypal! They may EVEN shut down your account entirely if you don't show the proper concern, or have too many. Steve