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No protection from Paypal on my member site

by jasonallvall
13 replies
So I have been running a members website and use paypal as the merchant to collection the monthly subscription fee.

Quite a few of my clients' monthly subscription date kicked in. They money was taken from their account and a few of them then cancelled their subscription profile (which is fine as its up to them). However, the alarming thing was that some of these members then claimed an 'unathorised transaction' claim!

How can they do that when they tick and agree to the Paypals TOS that the money will come out of their account every month until cancelled. The even more concerning thing is Paypal will make them win and me lose becasue its a digital good!

Is there any protection for us?
#member #paypal #protection #site
  • Profile picture of the author drewfioravanti
    Let me get this straight...they thought they cancelled their membership...which you recognize. But since they did not do it via Paypal, and instead did it via the website they subscribed to, they are not entitled to any refund? So...you get their money and that's all that matters?

    I hope "Paypal will make them win and you lose", too.
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    • Profile picture of the author Thriftypreneur
      Originally Posted by drewfioravanti View Post

      Let me get this straight...they thought they cancelled their membership...which you recognize. But since they did not do it via Paypal, and instead did it via the website they subscribed to, they are not entitled to any refund? So...you get their money and that's all that matters?

      I hope "Paypal will make them win and you lose", too.
      I think you're reading it wrong.

      Pretty sure he's saying that people signed up for and authorized a membership (through Paypal) for his site, then, once their free period was over and they finally got billed, they cancelled and disputed the charges. And, because Paypal offers zero protection for digital goods, he loses every dispute.
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      • Profile picture of the author Steve B
        In my opinion, the business owner needs to be extra diligent about explaining to the subscribing member exactly what he is doing by signing up, and exactly how Paypal will be taking automatic payments out of his CC account.

        Your explanation should be exact but simple, straightforward, and direct. You want the customer to understand how and when your monthly payments are being extracted.

        The idea is to leave the subscribing customer with NO surprises. If he wants to cancel at any time, that is his choice and you should honor it.

        If a subscriber is confused or has any question at all about why money is coming out of his account automatically, he is going to cancel his membership and ask for his money back.

        Good luck to you,

        Steve
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      • Profile picture of the author jasonallvall
        Spot on.

        The content get released at the beginning of every month, so when the customers got access to the next months worth of content and then cancelled their membership, they then disputed ever sending month 2's payment!

        My issue here is that how can they dispute sending it when they tick and agree to paypals TOS which clearly states to be billed every month until cancelled. My further issue here is how can paypal allow these people to win. Its basically going against what they have asked the person to sign and agree too!

        Does that make sense

        Originally Posted by Thriftypreneur View Post

        I think you're reading it wrong.

        Pretty sure he's saying that people signed up for and authorized a membership (through Paypal) for his site, then, once their free period was over and they finally got billed, they cancelled and disputed the charges. And, because Paypal offers zero protection for digital goods, he loses every dispute.
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        • Profile picture of the author Thriftypreneur
          Originally Posted by jasonallvall View Post

          Spot on.

          The content get released at the beginning of every month, so when the customers got access to the next months worth of content and then cancelled their membership, they then disputed ever sending month 2's payment!

          My issue here is that how can they dispute sending it when they tick and agree to paypals TOS which clearly states to be billed every month until cancelled. My further issue here is how can paypal allow these people to win. Its basically going against what they have asked the person to sign and agree too!

          Does that make sense
          I'm honestly surprised that you're losing the disputes. Anytime that I've been the victim of a completely garbage digital product (some even in the hundreds in cost) and disputed the transaction, Paypal has told me to go play in traffic because the product was digital.
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          • Profile picture of the author jasonallvall
            Exactly!!!!!!!!!! why is it that when we are the victim of this we lose and then when someone claims against us I lose too!

            I just thought there was no protection against digital goods so i automatically lose anyway.

            PS my content is quality, a % of my customers are just cheap

            Originally Posted by Thriftypreneur View Post

            I'm honestly surprised that you're losing the disputes. Anytime that I've been the victim of a completely garbage digital product (some even in the hundreds in cost) and disputed the transaction, Paypal has told me to go play in traffic because the product was digital.
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  • Profile picture of the author drewfioravanti
    Oh. OK. I see now. I do apologize.
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  • Profile picture of the author stoltingmediagroup
    I suggest putting your energy towards supplying quality content. You may then find yourself not having to battle PayPal, and even worse, battling customers for a game of win or lose. Because the fact is, even if you "won" whatever it is you wanted to win, (money from a customer who decided they don't want to stay?) then the member will still not come back because they obviously thought your content was not worth their hard earned money.

    So why not put your focus on providing a great membership with great content. (your opinion doesn't count, customers will show whether it is or not) Instead of spending time worrying about how people can possibly tick off check boxes and then claim unauthorized transactions etc etc...

    Just saying.
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  • Profile picture of the author Moneymaker2012
    that is happening now and then, the seller is not protected. Paypal has always been unfair with seller.
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  • Profile picture of the author LilBlackDress
    Originally Posted by jasonallvall View Post

    So I have been running a members website and use paypal as the merchant to collection the monthly subscription fee.

    Quite a few of my clients' monthly subscription date kicked in. They money was taken from their account and a few of them then cancelled their subscription profile (which is fine as its up to them). However, the alarming thing was that some of these members then claimed an 'unathorised transaction' claim!

    How can they do that when they tick and agree to the Paypals TOS that the money will come out of their account every month until cancelled. The even more concerning thing is Paypal will make them win and me lose becasue its a digital good!

    Is there any protection for us?
    It really does sound like there is a communication problem in making it dirt clear how it is subscription based and how they can cancel their subscription. But if you are not sure on this, why not reach out to a few who did report this as an unauthorized transaction and ask them why they filed.
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  • Profile picture of the author brutecky
    Originally Posted by jasonallvall View Post

    However, the alarming thing was that some of these members then claimed an 'unathorised transaction' claim!
    This kind of thing happens a lot. To be quite blunt buyers who pay with PayPal can be real jerks (sometimes). They just hit that dispute button and select one of the reasons without any thought to it. It never occurs to them that in the eyes of PayPal they are reporting fraud. Either that or they just dont care and are to lazy to just ask for a refund or a cancellation. This is dispute abuse plain and simple by jerky buyers who would prefer to report you for fraud rather than give you a chance to refund them yourself. It sux but there are people like this out there.

    Originally Posted by jasonallvall View Post

    The even more concerning thing is Paypal will make them win and me lose becasue its a digital good!
    Actually you have this backwards. Paypal will NOT protect them because it is a digital product. If you actually escalate this to a 'claim' (or they do) they will not win, you will not have to refund them. However you should just give them the refund anyway.
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    • Profile picture of the author LilBlackDress
      Originally Posted by brutecky View Post



      Actually you have this backwards. Paypal will NOT protect them because it is a digital product. If you actually escalate this to a 'claim' (or they do) they will not win, you will not have to refund them. However you should just give them the refund anyway.
      Yep very true. Buyers of digital goods generally do not win or get a refund UNLESS they claim it to be an UNAUTHORIZED TRANSACTION in which case they usually do get the refund.
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  • Profile picture of the author owais211
    Banned
    A great concern but i think you need to take your prospect members through all the information about you membership site before they proceed with membership subscription.Had they known that after the trial subscription they will billed automatically,you could be on the safer side.
    This will help in avoiding such situations in future.
    Cheers
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