Fraudulent claims using paypal..

Starting a console gaming shopping cart site and paypal will be the only payment method available due to being unable to afford a merchant account.

I know there will be chargebacks, and claims...

If i submit all the infomation, such as delivery info am i safe?

Also do you think i should get a tracking number with EVERY order?

Thanks

 

Make some money and get a Merchant account.
If not, you will lost TONS of money.

 

what do you mean i will lose tons of money?

Do you mean by not having a merchant account, i will lose out on sales?

I plan to have the games at $10 - $15 price difference compared to the other retailers..

 

I will also suggest you to get merchant's account. As it's more safe, secure and has much more features. Otherwise you have to take extra precautions.

 

Paypal always sides with the buyer, but if you can provide proof of delivery they will reverse the charge back. Paypal does not open you up to fraud any more than any other CC processor.

 

Paypal is powerless to reverse a chargeback. Chargebacks are handled with the cc issuer and not paypal, so paypal can't do anything.

Ofcourse paypal opens you to more fraud. They can reverse the transaction if they feel it might be a problematic one. The problem is they usually do this well after a seller has posted the goods. There is also the threat of SNAD items, these are very easy to lodge through paypal.

I would think a tracking number would help you somewhat, but it's not a guarantee. If you do opt for tracking numbers, signature on delivery...etc make sure you file scans of those as buyer's have up to 18 months to do a chargeback with their cc issuer.

 

im uding paypal for almost 10 mos now. And it doesnt gave me head ache. Its a good payment method if your selling or buying over the internet

 

Best option - if you can't afford a merchant account at the moment, ship everything via Recorded Delivery and store every receipt. It's the safest way as you'll always get someone claiming they never received a product. It may mean your customers will have to pay that little bit extra for delivery but it covers your back in case they do decide to make a charge-back and/or start a dispute.

 

Crooks are crooks. Paypal does not encourage people to be anything other than what they are. It doesn't matter if you are using paypal or a merchant account, if you run into a crook you might get robbed.

 

There can be things you can do to help prevent chargebacks, of course but it also goes back to what the consumer tells the issuing bank (of the credit card) or Paypal. Depending on what method is used with Paypal (when the consumer checks out), they might be able to help you some.

I am just curious - have you looked at what some of the merchant account fees are? Once you do that, look at how much you are paying for 100 transactions. Then look at what it will cost you for a few chargebacks. It might be worth getting a merchant account, or rely on Paypal for a few months and save as much as you can to get a merchant account.

You might also consider looking at vetting the transaction before sending it over to Paypal. There are services out there like MaxMind that will help you determine if the transaction should be sent over to Paypal. Maybe also search for selling your chargebacks. This might be something you want to add to your TOS.

 

Lots of good info here. Thanks for sharing.

 

Another drawback of Paypal is that they basically allow for a customer to make 2 chargebacks. If the customer loses the paypal dispute they can still make a chargeback with their card issuer.

In any case, if you are selling a digital product like a game, you almost need to accept paypal. There's going to be a ton of customer that will want to use it for a product like that.

 

No! PayPal is famous to be bullshit with huge customers. Once you make enough money to get a merchant account, get it!

 

I've decided not to go ahead with the site until i do manage to afford a merchant account.

I spoke to someone who works for paypal and they basically said, 'try and ship everything with a tracking number, even if it costs 1 dollar more, go ahead with it' 'When someone buys something from you, you will get an auto confirmation whether you should ship the item to that address or not'

Tbh, paypal isn't safe, there is so many accounts that that's been phished. It's a ok if you are a big corporate company and you have money, but i'm not that and if i lose even one game, that's a BIG loss to me.

 

There are other payment processors besides other than PayPal you know, you can look at utilizing Moneybookers, Google Checkout, Checkout with Amazon, Authorize.Net and others for processing payments on your site until you can afford a Merchant Account. If the Big Name banks' Merchant Accounts are not approving you or their fees are too expensive than I suggest you look into opening a Merchant Account with a Community Bank in your area. Their Merchant Account rates might be more too your liking.

 

Paypal is heavily weighted in favour of a buyer, in my experience obtaining a signature is the only way to defend against any claim.

 

Have you heard of PayPal's Security Key? A small electronic device that produces a random number to add to your password giving you an extra layer of security.

 

You wont loose tons of your money with paypal. But you need to be constantly tracking the transactions. And i will go with the common advice - get a high security ssl certificate and a merchant account. Its much safe and secure.

 

may be you safe but it will be a big risk for you ...
So my opinion for you don,t do this may be its not good for you .....

 

We are selling digital products over PayPal for 6 years and I can say we won about 90% of disputes (we don't have tracking numbers, signatures etc). Yes - some loosed disputes were clear fraud from buyer but overall we are still surprised how many disputes we have won so far.