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How to deal with PayPal Chargebacks?

by Social Experts
14 replies
Ok, every time I bump a WSO on average I get one person who marks that transaction as one they did not make. So I have to give proof that I delivered the product..

How do you guys deal with this?
#chargebacks #deal #paypal
  • Profile picture of the author Josh Anderson
    Originally Posted by Matt Minto View Post

    Ok, every time I bump a WSO on average I get one person who marks that transaction as one they did not make. So I have to give proof that I delivered the product..

    How do you guys deal with this?
    With a chargeback you are under the burden to prove that the individual did authorize the purchase and that you delivered. Provide as much evidence as possible including IP addresses that they made the transaction with and accessed the product with and any communication that you may have had with the individual that could prove they authorized the transaction and made the purchase.

    It is quite difficult to win a digital product chargeback because you do not have shipping and delivery confirmation proof... so usually you will lose.

    A chargeback is different than a PayPal dispute.

    With a PayPal dispute show as much evidence as you can that you delivered the product and include any information you can about their IP address and where the transaction originated as well as any evidence you have that the individual is an existing customer or has had contact with your personally.

    Also if it is a PayPal dispute point out that the product is a digital product and that it is not covered by their buyer protection policy.

    Personally for disputes on digital products where the client claims they did not make the purchase I side with the client and immediately refund the purchase.

    This is the best practice.

    Though rare I have won chargeback disputes on PayPal for digital products.

    Expect to lose most of them.
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  • Profile picture of the author ecoverbox
    It happened to me that after delivering graphics to a few clients, a year later, I get a chargeback. Clients claiming they never ordered. Although I provided all email correspondence about the order and proof of delivery of files, didn't do any good. This really sucks. Imagine if all clients did this!It's really unfortunate that paypal doesn't give protection to sellers as they do to buyers when it comes to digital products.
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  • Profile picture of the author atwellpub
    I'm wondering what the best way to deal with chargebacks for digital products is.
    I've noticed that Paypal does not give me the option to refund the transaction if a chargback is initiated, and after a long dialog with Paypal I discovered that no matter what if a chargeback is filed I will get fee'd.

    It seems unfair, and fraudulent, but there is nothing I can do. Does anyone have any advice for avoiding fees? Or is it truly impossible with chargbacks and paypal?
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  • Profile picture of the author italiandude
    It's hard when you get a chargeback for a digital product on paypal. Unlike physical where you can provide a shipping tracking number you can't do that for digital products. When i sell a digital product for over $100.00 I usually like to go ahead and also mail the customer a copy of what I sold them on a CD and provide the tracking number in paypal.
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  • Profile picture of the author Gary Becks
    Although I tend to simply refund people when they do a chargeback, paypal does not cover any digital products. So if you call them and let them know that it was a digital product they will most likely close any disputes in your favor.
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  • Profile picture of the author BloggingPro
    Chargebacks on digital products are a bitch and are completely different from physical product chargebacks.

    In very RARE cases you will win. Most of the time if you get a chargeback for a digital item you can count on losing. It's why for my next big launch I plan on sending out paper-packets via registered mail so that I can have a tracking number. Time consuming? Yes. I'd like to see how a chargeback gets handled then since I'll have the tracking code.
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    • Profile picture of the author Gary Becks
      Originally Posted by BloggingPro View Post

      Chargebacks on digital products are a bitch and are completely different from physical product chargebacks.

      In very RARE cases you will win. Most of the time if you get a chargeback for a digital item you can count on losing. It's why for my next big launch I plan on sending out paper-packets via registered mail so that I can have a tracking number. Time consuming? Yes. I'd like to see how a chargeback gets handled then since I'll have the tracking code.
      Sorry, but this is complete misinformation. Paypal does not cover non tangible goods and if a person files a dispute or raises a claim on a non tangible good you will win 99% of the time.

      On the other hand, if someone says that they never authorized the transaction to begin with, paypal will side with them most times regardless of whether you have a tracking code or not.
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      • Profile picture of the author BloggingPro
        Originally Posted by Gary Becks View Post

        On the other hand, if someone says that they never authorized the transaction to begin with, paypal will side with them most times regardless of whether you have a tracking code or not.
        Oh really?

        Then explain to me why at my job when we get a chargeback and we provide them a tracking code the dispute ALWAYS closes in our favor. We ship physical goods.

        So by simply taking your digital download and turning it into a physical good (CD's) and shipping it I should be just as covered as they are at my job. I've lost money on digital items due to chargebacks. That's what I'm talking about here, not paypal disputes--which are different.
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        • Profile picture of the author Gary Becks
          Originally Posted by BloggingPro View Post

          Oh really?

          Then explain to me why at my job when whether we get a chargeback or paypal dispute and we provide them a tracking code the dispute ALWAYS closes in our favor. We ship physical goods.

          So by simply taking your digital download and turning it into a physical good (CD's) and shipping it I should be just as covered as they are at my job. I've lost PayPal claims on digital items due to chargebacks. That's what I'm talking about here, not just paypal disputes--which are different.
          Not here to argue, just speaking based on experience and the facts. I have been selling products online for a while now and have never been asked to provide a tracking number for a digital download as paypal does not offer buyer protection for them.

          From the paypal website buyer protection policy.
          13.3 Ineligible Items. PayPal Purchase Protection only applies to PayPal payments for certain tangible, physical goods. Payments for the following are not eligible for reimbursement under PayPal Purchase Protection:
          1. Intangible items, including Digital Goods
          2. Services
          3. Real estate, including residential property
          4. Businesses
          5. Vehicles, including motor vehicles, motorcycles, caravans, aircraft and boats
          6. Custom made items
          7. Travel tickets, including airline flight tickets
          8. Items prohibited by the PayPal Acceptable Use Policy
          9. Items which you collect in person, or arrange to be collected on your behalf, including at the retail point of sale
          10. Items that violate eBay’s Prohibited or Restricted Items Policy
          11. Industrial machinery used in manufacturing
          12. Items equivalent to cash, including prepaid or gift cards
          13. PayPal Direct Payments
          14. Virtual Terminal Payments
          15. Personal Payments
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          • Profile picture of the author BloggingPro
            Originally Posted by Gary Becks View Post

            From the paypal website buyer protection policy.
            13.3 Ineligible Items. PayPal Purchase Protection only applies to PayPal payments for certain tangible, physical goods. Payments for the following are not eligible for reimbursement under PayPal Purchase Protection:
            That's all fine and dandy, and yes that does count for PayPal disputes, however the OP was specifically speaking about Chargebacks which PayPal has absolutely no control over.

            When a Chargeback is filed by a customer it is done through their bank or credit card tied to the PayPal account. At that point PayPal is simply mediating the process.

            However, in those cases if you cannot provide a tracking number and/or information stating that they really did order the product you are going to lose.

            Definitely not trying to argue with you, but there is a big difference between a PayPal dispute and the various Chargebacks that can be filed by customers through their financial institutions.
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            • Profile picture of the author Gary Becks
              Originally Posted by BloggingPro View Post

              That's all fine and dandy, and yes that does count for PayPal disputes, however the OP was specifically speaking about Chargebacks which PayPal has absolutely no control over.

              When a Chargeback is filed by a customer it is done through their bank or credit card tied to the PayPal account. At that point PayPal is simply mediating the process.

              However, in those cases if you cannot provide a tracking number and/or information stating that they really did order the product you are going to lose.

              Definitely not trying to argue with you, but there is a big difference between a PayPal dispute and the various Chargebacks that can be filed by customers through their financial institutions.
              I do understand the difference and what you are saying, but as I stated before - I have not had much trouble with them unless the buyer says that it was an unauthorized transaction.
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  • Profile picture of the author luzern
    Chargeback sucks, but there's nothing much you can do about it. Mostly you'll loose. So I don't have any tip to win chargeback.
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  • Profile picture of the author mrorange
    I've won chargeback cases against me with Paypal. However, they were ALL for services and products delivered and paid for via CREDIT CARD. I think your best bet is some sort of written or maybe digital approval by the customer. Paypal is pretty fair about chargebacks, but Ebay is horrible. When dealing with an Ebay related Paypal chargeback you are almost invariably screwed.
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  • Profile picture of the author ghostrecon
    Chargebacks are truly a bitch, and 99.5% of the time PayPal sides with the buyer regardless of the information you provide. All I can say is try to be as transparent as possible and if you see that you have a lot of chargebacks coming in consecutively, switch your primary PayPal account because too many and it will get limited/closed.
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