Paypal Dispute/Claims For Digital Goods

22 replies
I can't tell you how many times I have heard complete OPPOSITE answers to this question that is asked a million times in every single forum. That's why I'd like to get a clear community consensus on whether or not a SELLER of digital goods will win or lose a customer dispute?

- Many have said Paypal always sides with a BUYER on digital goods
- Many have said Paypal always sides with a SELLER of digital goods, because the paypal protection policy clearly says its not covered
- Some SELLERS have said that when receiving a dispute, if you escalate the dispute into a Claim and add a comment reminding paypal/customer that it is a digtal item, then they always win


So I would like to hear everyone's PERSONAL experience only, not what you have read or heard from someone or somewhere.

Other side questions I would be interested in hearing from digital goods sellers are:
- is there a dispute to sales ratio that can limit your paypal account?
- maybe BOTH buyers and sellers can actually win, depending on other circumstances?
- has any seller had to agree to a paypal money reserve due to disputes on digital goods?
- has any digital goods paypal seller had their account closed for reasons in this topic?

Thanks to all who participate!
#digital #dispute or claims #goods #paypal
  • Profile picture of the author J Bold
    Here's the real answer.

    It depends.

    Sometimes they side with the seller, sometimes with the buyer. I've had both happen.

    I won one dispute as they opened the dispute and never responded to any of the messages and evidence, including that it was a digital product.

    I even told them I'd refund them if they removed the dispute, and they never responded to me or paypal so I won.

    I lost a chargeback, though, and I would guess those are harder to win because it's up to the credit card company. It was a bogus claim, but they won. Such is life.
    {{ DiscussionBoard.errors[7857987].message }}
  • Profile picture of the author Alex Blades
    Many have said Paypal always sides with a SELLER of digital goods, because the paypal protection policy clearly says its not covered
    That is nonsense, Paypal always sides with the buyer when it comes to digital goods. I remember many years ago a rep told me there is nothing she could do, that maybe I should burn it on a dvd and ship it to be protected.

    Paypal has no choice really, they are at the mercy of the credit card companies, who will do a chargeback without any process.
    Signature
    " I knew that if I failed, I wouldn't regret that.
    But I knew the one thing I might regret is not ever having tried. "

    ~ Jeff Bezos

    {{ DiscussionBoard.errors[7857989].message }}
    • Profile picture of the author J Bold
      Originally Posted by Alex Blades View Post

      That is nonsense, Paypal always sides with the buyer when it comes to digital goods. I remember many years ago a rep told me there is nothing she could do, that maybe I should burn it on a dvd and ship it to be protected.

      Paypal has no choice really, they are at the mercy of the credit card companies, who will do a chargeback without any process.

      Sorry but that was not true in my case. I was the seller, and I won. I said it was digital goods and not protected, which it isn't, and I won.

      Chargebacks are different though. But we are talking about a paypal dispute, not a chargeback.
      {{ DiscussionBoard.errors[7857997].message }}
      • Profile picture of the author Alex Blades
        Originally Posted by J Bold View Post

        Sorry but that was not true in my case. I was the seller, and I won. I said it was digital goods and not protected, which it isn't, and I won.

        Chargebacks are different though. But we are talking about a paypal dispute, not a chargeback.
        That might happen sometimes, when the buyer fails to respond. I only fought one dispute many years ago, so Paypal may have loosened up a little since then
        Signature
        " I knew that if I failed, I wouldn't regret that.
        But I knew the one thing I might regret is not ever having tried. "

        ~ Jeff Bezos

        {{ DiscussionBoard.errors[7858025].message }}
    • Profile picture of the author Beatrice
      Originally Posted by Alex Blades View Post

      That is nonsense, Paypal always sides with the buyer when it comes to digital goods
      NOT in my case. I bought a digital product and wanted a refund but Paypal REFUSED stating that they didn't refund digital products. I repeatedly asked the seller to refund me but he flatly refused as he knew I didn't have a leg to stand on as the product was digital
      Signature
      FREE Video to Build Your Website:

      http://www. createmyownwebpage.net

      This Step-by-Step video guide will show you how to buil your website from scratch!(For FREE)
      {{ DiscussionBoard.errors[7861442].message }}
  • Profile picture of the author Entrecon
    I had someone buy a directory listing on my website. Bad timing the site went down due to a hosting error within minutes of her paying. Site was back up in about 6 hours (when I woke up in the morning and realized it was down). She filed a complaint. This was the final disposition by PayPal:

    We are denying your buyer's claim because the item you sold was virtual, digital, or intangible, which is not covered under PayPal Purchase Protection. We only cover claims involving physical items that can be shipped and tracked.
    Signature

    Visit My website http://kipferguson.com

    {{ DiscussionBoard.errors[7858012].message }}
  • Profile picture of the author Istvan Horvath
    That's why I'd like to get a clear community consensus
    You are aware that Paypal will not give a sh*t about the community "consensus", right?
    No matter what the consensus is here - Paypal will do what they want, over there.

    So, what did you hope to achieve with this thread?
    Signature

    {{ DiscussionBoard.errors[7858030].message }}
  • Profile picture of the author rafsco
    I do accept payment with PayPal but for expensive items I accept only Money Order or Cashier Checks. I am talking about stuff I sell on eBay that are worth more than 1k. I had payment reversed even after 3 months from the CC company that through PayPal paid me. And there is really nothing you can do, it is a risk of doing business.
    Signature

    Joe Falcade
    Make Money with greedyjoe.com

    {{ DiscussionBoard.errors[7858036].message }}
  • Profile picture of the author salegurus
    Why not phone PayPal and ask them yourself?
    I tried once, Paypals answer was "sorry we don't cover our customers for digital products ".
    Signature
    Think of how stupid the average person is, and realize half of them are stupider than that.

    ― George Carlin
    {{ DiscussionBoard.errors[7858197].message }}
    • Profile picture of the author Tony Marriott
      PayPal T&C's may well state all sorts of things. They can also change at PayPal whim. And be interpreted as they please.

      Any consensus of opinion on the forum will be as varied as any other you read.

      In practice, for digital products you are better off spending your time promoting your product where you can make more money than trying to fight of a few dollar from a refunder/dispute.

      Much of the time a dispute is just a lazy refunder.

      You can fix every Paypal dispute (except fraud) by clicking "Refund buyer and close dispute".

      Do that, move on, don't take it personally, get on with your main business.

      You will find plenty enough distractions without adding adding any more

      If you have so many disputes that it becomes a problem then you need to look at your own product and sales page to fix the issue rather than looking to find "loopholes" to avoid refunding.
      {{ DiscussionBoard.errors[7858262].message }}
  • Profile picture of the author revforcemayan
    i paid 40$ to a blog commenting service here and they seller never responded after the payment was made, i post a paypal dispute and afters days of waiting they replied me saying they do not cover digital products, ever since that i only use paypal when its really nesasary bcz if they dont give a F abt us when we buy digital products, why should we use their service
    Signature
    Facebook Marketing - USA And Worldwide Fan Page Likes - Price Starting 8$ Per 1000, PM Or Skype - Sangap5
    {{ DiscussionBoard.errors[7858830].message }}
  • Profile picture of the author Silas Hart
    PayPal believes that sellers do not lose anything of actual financial value if they sell an intangible product and then refund the customer.

    Source: PayPal Representatives - eBay Live, Philadelphia 2012

    I've sold a lot of intangible products through eBay, it's simply a cost of doing business with PayPal knowing that they offer no protection for buyer or seller for intangible purchases so they will refund the buyer to minimize risk to themselves.

    I personally don't feel it is such a bad thing even though it works against me.
    {{ DiscussionBoard.errors[7858941].message }}
  • Profile picture of the author Bill_Z
    Entrecon above is correct. On digital goods, if the seller makes it clear during the Dispute or Claim process that the product is digital then the seller will win every time. As a seller, I have won 100% of the disputes and claims against me.

    Chargebacks are a different story, however. I've only had one and lost but I know from other sellers that the buyer usually wins these as Paypal typically doesn't do much to fight the credit card companies.
    {{ DiscussionBoard.errors[7859020].message }}
    • Profile picture of the author PerformanceMan
      Originally Posted by Bill_Z View Post

      Entrecon above is correct. On digital goods, if the seller makes it clear during the Dispute or Claim process that the product is digital then the seller will win every time. As a seller, I have won 100% of the disputes and claims against me.

      Chargebacks are a different story, however. I've only had one and lost but I know from other sellers that the buyer usually wins these as Paypal typically doesn't do much to fight the credit card companies.
      This is why people seem confused.

      If customers pay via PayPal but using a credit card they can still file a chargeback with the credit card company. In this case the seller will LOSE 100% of the time.

      For native PayPal payments the seller will WIN 100% of all disputes because 'buyer protection' is for tangible items only.
      Signature
      Free Special Report on Mindset - Level Up with Positive Thinking
      {{ DiscussionBoard.errors[7859167].message }}
  • Profile picture of the author sbucciarel
    Banned
    I escalate it to a claim and file proof of purchase and any communication, etc. Sometimes I win, sometimes I don't.

    Always isn't in Paypal's vocabulary. While they may state a policy, a human still reviews those disputes and makes a judgment based on the info they receive.
    {{ DiscussionBoard.errors[7859217].message }}
    • Profile picture of the author PerformanceMan
      Originally Posted by sbucciarel View Post

      I escalate it to a claim and file proof of purchase and any communication, etc. Sometimes I win, sometimes I don't.

      Always isn't in Paypal's vocabulary. While they may state a policy, a human still reviews those disputes and makes a judgment based on the info they receive.
      There is no judgment to be rendered.

      Either it's an intangible item (not covered) or it isn't.

      If you're losing these disputes Suzanne it's because the orders aren't being recorded correctly as intangible.

      There's no reason to ever lose a dispute like this as a seller. I would assume the losses are coming into play when the buyer says it was a physical product. When that happens they'll ask for proof you shipped the item. Since you don't have shipping proof you could lose. But that's a telltale sign that you should just call your PayPal rep and explain it.
      Signature
      Free Special Report on Mindset - Level Up with Positive Thinking
      {{ DiscussionBoard.errors[7859242].message }}
  • Profile picture of the author Malcolm Thomas
    Paypal will sometimes side with the buyer and sometimes side with the seller.

    It all depends on the circumstances and evidence available.
    {{ DiscussionBoard.errors[7859222].message }}
  • Profile picture of the author seobro
    OK so pay pal hates digital downloads because those have a very high percentage of returns from serial refunders that like getting stuff for zero money. Problem is that if enough people complain about your digital download pay pal will pull your account and it does not matter how big you are. Look at how amazon stopped selling sim city on amazon. Too many complaints is a sure ticket to getting your account pulled from under you.

    Best solution is to sell reports on paper. That way it is a physical item that pay pal enjoys. If you want to sell an e-book use amazon. They will pull you if they get enough refunds, but the bar is higher and your need a lot of one stars to lose your account on amazon. Sadly, pay pal is picky and you need pay pal to sell on ebay, there fore many people are using money bookers and other services.
    {{ DiscussionBoard.errors[7859413].message }}
  • Profile picture of the author itsjinx2
    Wow, I see the exact responses that I was expecting. And yet, there are still divided opinions

    Let's make a few addition distinctions clear:
    - A chargeback is not what I was wondering about. Most people know that chargebacks are a different animal. I'm strictly referring to disputes and claims filed within paypal's own system
    - Secondly, I understand that "Paypal will not give a sh*t about the community 'consensus', right?". I'm asking opinions of individual experiences.
    - Also, (Tony Marriott) obviously if someone has many disputes then there is a problem with their service/product. Again, that is not what me, being the OP, is asking about. I agree with everything you're saying and I do genuinely appreciate your post though, and EVERYONE's input as well
    - To clarify, I'm not trying to find an absolute consensus, but rather looking for RELIABLE personal experiences which are as close to fact as we can get. The reason it would be reliable is because as long as we are assuming the same situation and factors, which in this scenario we already defined those factors, then an assumable outcome would suffice.

    It appears that those sellers with personal experience(and same defined factors) say emphatically that they, as a digital product seller, will always win a dispute as long as it's fought back properly as previously defined.

    It also appears that those sellers with personal experience(but varying defined factors) say that it can go either way; However, this begs the case for those sellers to apply the same factors which in turn would presumably reach the same conclusions as the other sellers.

    Then it appears there are buyers/casual-sellers who save seen it go both ways from both point of views.

    I'd love to get other input from more sellers and anyone elses thoughts!

    (please do not say 'move on', or anything unproductive to this convo. This is a discussion for the betterment of the forum so be nice)
    {{ DiscussionBoard.errors[7861378].message }}
  • Profile picture of the author Istvan Horvath
    please do not say 'move on', or anything unproductive to this convo.
    Reminder: you are not in position (nobody really is) to impose restrictions on what people want to post...

    This is a discussion for the betterment of the forum so be nice
    The forum and its members will decide (and that will be a real community consensus, btw) whether the thread started by you is indeed for the "betterment"... or just the n+1 Paypal thread.
    Signature

    {{ DiscussionBoard.errors[7861397].message }}
  • Profile picture of the author GarrieWilson
    PayPal gives buyers have ZERO protection for intangible goods. (Digital products & services.) The TOS even says as much.

    All a seller has to do is reply with a message like; "digital item. not covered with PayPals buyer protection." and include the download link again.

    Garrie
    Signature
    Screw You, NameCheap!
    $1 Off NameSilo Domain Coupons:

    SAVEABUCKDOMAINS & DOLLARDOMAINSAVINGS
    {{ DiscussionBoard.errors[7861940].message }}
    • Profile picture of the author itsjinx2
      Originally Posted by GarrieWilson View Post

      PayPal gives buyers have ZERO protection for intangible goods. (Digital products & services.) The TOS even says as much.
      Very true. I wonder though if any paypal buyer has received a refund on a dispute or claim for a digital item? Or even if any buyer has successfully FOUGHT a claim/dispute where paypal has decided in their favor???
      {{ DiscussionBoard.errors[7867129].message }}

Trending Topics