I just started taking PayPal in addition to my standard payment processing company and have noticed a lot of fraudulent transactions coming from PayPal. I keep getting payment on hold notices from PayPal while they investigate. Does anyone have any ideas of techniques I can implement to minimize my PayPal fraud exposure?
Use MaxMind's MinFraud to detect the likelihood of fraud before giving them the PayPal option. Use Geotargetting databases to deny trouble countries altogether.
So if I understand this application correctly I can deny a person from even doing a PayPal Checkout if their email adress is funny, if their password choosen matches a fraud list, if their IP address comes fom a high fraud country etc... Or is this check done after the purchase?
What I do is not to provided automated delivery with paypal transactions. I will vet every incoming transaction and if they come from unverified or unregistered accounts, I will refund their money right away and not delivery any products. Dealing with verified account holders give you an additional sense of security. At least that works for me.
I sell long distance services, so I don't qualify for their seller protection policies and I can't restrict it to just US as I rely more on international orders. It's always tougher to do fraud provention on real time delivery products.
Just be glad they don't have chargeback fees. They can do some evil things to your business. Between chargebacks on fraud and refunds you can end up in the hole quickly.
Last I knew Paypal sure does have chargeback fees. The receiver is able to issue a refund for up to 60 days, and this has no fees. If the Payee starts a chargeback there is a $10 or $20 fee, if you lose the dispute, and the money is frozen during the dispute period This is all very accurate as of 6 months ago, has it changed?
Ahh you are probably right. I haven't had to deal with negative PayPal issues much lately, I really try to end things on a most positive note as possible. I am still shaken over several hundred dollars magically disappearing from me last year due to fraud causing chargebacks, right in time for the holidays. That's about the time Google shunned my site as well. I've not been able to get on the right track since.