PayPal "Loophole" Gone

EXACTLY! I'm not going to change a thing. My refund rate right now is well below 2%. That means people are happy with the products they are purchasing from me. I believe right now for US customers they have 45 days to file a dispute on a digital goods purchase. If my customers have not asked for a refund or filed a dispute within the first 45 days, chances are pretty good that they never will. As unifiedac pointed out, if you provide quality products/services to your buyers you shouldn't have refund problems.

That being said, I am sure there will be a few buyers who may decide to take advantage of the new time limit, but that's the nature of the business. I don't foresee a lot of buyers doing that as long as they are satisfied and feel they got a good value for their money. Overall, this new time limit should not affect the businesses of people who are already doing the right thing and providing top quality products at a great price.

I almost always offer a 60-day refund policy (there are few exceptions) , and it is no questions asked. I also try and respond to any refund request within 8 hours. This helps ensure that the buyer does not get upset and begin to think that they are being blown off. Also, I have had many buyers request refunds and then come back and buy another product from me, and never ask for a refund. I suspect this is partly because they understand that I will honor my refund policy with no hassle on their part if they are not satisfied with the product for any reason.

I actually think stretching the time limit to 180 days is a positive change, because I think it will improve the quality of digital products overall, as the sellers will want to ensure that their customers are very happy with their purchases.

I have to admit, though, it does get my goat when people open a dispute instead of first contacting the vendor and asking for a refund. I think it is simple courtesy to allow the product vendor a maximum of 24 hours to address your problem/refund request before hitting the dispute button. Still, some buyers will always go for the dispute first. Again, that's the nature of the business we're in. If this happens, the best thing to do is to address the dispute as soon as you can and refund the buyer.

The only real problem I can foresee with this is if you have a refund policy that is shorter than 180 day time limit, which most do. This opens up the question of whether or not it's best to refund someone who files a dispute even if it's beyond your stated refund policy. I predict we may also see refund policies being stretched to 180 days instead of the normal 30 or 60 day policy offered by most sellers. We'll just have to wait and see how it plays out I guess.

You can provide digital products of the highest quality, once you reach a certain amoutn of customers paypal disputes will happen.

I just had this case some days ago. Guy purchases 5 digital items/services, we delivered them correctly and 2 weeks later he makes a dispute via paypal.

This happens all the time cause people use paypals buyer protection to scam the seller.

But you won't notice that if you only have a few cutomers.

That's silly If the product is targeting the IM niche which is notorious for habitual refunds.

Now If you was talking about something like a woodworking or gardening niche product, sure, very few refunds will happen.

Ray,

Part of my point here is that I think the reason for this difference is that many consumers know that PP wouldn't refund their money on an ebook but CB would. So the CB refund rate was much higher. Now that they get the protection with PP, I believe refund rates will be higher with PP. PP will potentially become a refund haven.

Everyone,

I agree with the quality product part of the conversation. The reason I called this a loophole is that I've heard people say in effect that they use PP so they can sell whatever junk they want to sell without having to refund.

One of the new rules is you can't refund just because you don't like the product. It has to be substantially different than advertised. So I think the advertising may need to be tightened up a bit.

Also they point out that proof that someone downloaded the product, I guess through log files or some other mechanism, would prove that they did receive the product and they might side on you behalf. However interestingly enough there is NO seller protection for digital goods - only buyer protection.

Talk about 180 day refund periods is also interesting when many WSOs are closed within a couple weeks, and some of the domains don't even work within 6 months of the sale.

I think the total effect will be that consumers will get the protection they deserve, scammers/frauds/crooks (on both sides) will continue, and legit sellers will need to be more diligent and more legit in the sense that they have to look at this from a more long term point of view and 6 months is long term compared to the average hit and run WSO.

Mark

That actually makes allot of sense.
CB would either have to change their refund policy as you say,
and/ or, perhaps hold on to your funds much longer from the time someone purchases, to the date you actually see the proceeds of that sale in your own bank. Obviously this would only apply to people who choose "Paypal" when buying via Clickbank.

With clickbank as a reseller, they must have a special contract with PayPal because ClickBank is really participating in what PayPal calls Aggregation, which is a violation of PayPal's Acceptable Use Policy.

But with my personal dealing with PayPal, PayPal does not understand their own definition of Aggregation, especially in the Adaptive API Department.

Best regards,
Steve Yakim

Are you saying that you don't just want to have 30 or 60 days to inspect the overall quality of a product, let's say a needle pointing course, but you want to be able to see if you can learn to needle point according to the lessons in the course, but if you don't manage to "get it" in 180 days, then the product is worthy of a refund?

If that's what you are saying, then this is actually helpful to marketers who would wonder why it sometimes takes a month or two before a refund is requested.

If that's not what you are saying, then please elaborate on what you meant by: "not enough time to fully extrapolate everything you need to know " and why you as a buyer would need 180 days?

That's true and I agree as a buyer, sometimes it's needed more than 30 or 60 days. Some marketers think that their customers doesn't have any better thing to do than testing their products. And some products have a long learning curve and also a longer developing process.
I've realized that if an IMer found a loop or a stratagy that worked OK
once, then they've get a "proof" of his results, and immidiately makes a "product" without testing in other market conditions.
IMers are always stressed to get "more products to sell" in order to fit their way of living and selling.
Another thing that I been experiencing as a buyer is that I'm being bombed by tons of "rubish marketing products".

Nowadays to find a " really new" product is almost a miracle. 90% of them are the same old crap with a new envelope and a very good landing page.

We all know these tricks. They have corrupted the market and the increased refunds rate are the result.

Trust is easy to break when you promised "heaven" in the landing page using synonims or marketing "euphemisms". A seller can justify saying..."I didn't say exactly that promise" but he knows or his copywriter knows that they really wanted to insinuate it. That's another form of cheating "my freind"...and buyers have they're own right to be defended from the "soft lies".
When I want "sweet little lies" I do prefer to listen to Flewood Mc.

In France one writer packed his book with a "doll" of President Sarkossy with all the "needles for vodoo him". He sold a lot!

Maybe SEO marketers are "missing an opportunity here to market with this strategy....I would like not to be Mat Cutts!

If IM and eCommerce has to be a freeland with no strong regulations I'm gonna buy to the mall again.

That probably wasn't mentioned here because it's not news.

Paypal has been able to freeze an account for 180 days since forever (maybe even since their inception). It has nothing to do with buyer protection and everything to do with the elimination of online fraud and criminal activity.

BTW - All online payment processors have the same/similar policies with regard to freezing an account.

??????

Where did you get that?

Dishonest buyers through JVZoo/WarriorPlus have NO requirement to refund through those platforms. With JVZoo/WarriorPlus/Clickbank/(and any other you care to name), these buyers can simply file a Paypal dispute or a chargeback (if they used a credit card to purchase).

I think this is a HUGE part of the reason why:

-Ray Edwards

Yes, it does matter. With PayPal's Adaptive API the maximum time that delayed payments will function is now 90 days which is half the time that the customer can ask for a refund. This is an added responsibility for the vendor when Chained Payments are used.

I believe Warrior Plus and JVZoo have their delayed payments set for 60 days. I have my system set for 55 days.

Unless the affiliate/vendor platform takes special security precautions to prevent affiliate fraud, this can open the door a little wider for fraudulent affiliates.

Best regards,
Steve Yakim

It matters to affiliates of products, because as I mentioned above a lot of them will be pissed they will now have to wait 6 months to get paid instead of 3 months.

Interesting find - I think you may be right.. perhaps after 90 days they "close" the transaction and dissallow any further changes..

Cheers,
Michael

Personally, it is a non issue for me. As one member said that if you are selective in what you promote everything will take care of itself !


- Robert Andrew

This may be true. However, they go out of their way to state that with the new policy, there is zero seller protection on digital goods - only buyer protection. They do indicate that on a product not received claim, the vendor can provide proof that the product was downloaded and it may help their chances for winning a dispute.

On the not as described claims there are no such indications. I think this would cover most of the complaints (see dozens/hundreds on this board) where people say they did the work as stated in the product but it did not work. I imagine most claims for refunds will be in this area.

And how will vendors prove their stuff works as stated in the sales letter? It's one thing when it's a radio - another one can be shipped out. It's another thing when you're talking about getting 67% more optins or 45,000 new visitors or hundreds of dollars in new cash because of X, Y, and Z.

Several people have said to "just put out quality products and it will be okay." We'll see if it's all okay when the vendor has to prove their secret methods work. Because if their secret method does NOT work for the customer, then the product is NOT as described and is refundable for 6 months under the new policy by the way I read this.

Now how they implement it all in real life is yet to be seen and we'll only know once it starts happening.

Mark

Times are tough!

Even honest people are starting to do sh.. they normally wouldn't do. Your customers asking for a refund, (because you know, the 3D eBook cover on the sales page looked like a real book)
or some other made up reason, can probably be expected more and more in these days.

Most of the higher volume vendors in here are already familiar with charge backs on a daily basis.
Some come in months later from the date of purchase. I would think this will also increase.

(My statements are just my personal prediction, not based on any stats.)

Interesting article here: Chargeback fraud - Wikipedia, the free encyclopedia