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Dealing with Chargebacks for Virtual Products

Discussion in 'PayPal' started by freshdevelopment, Oct 18, 2011.

  1. #1
    As a seller, does anyone have any experience dealing with chargebacks and "unauthorised purchase" reports against your account?
    SEMrush
    I sell software and what happens a lot is users buy the software, contact paypal and pretend their account has been compromised and get there money back. It seems I have no protection from Paypal but just checking if there is a way around this.

    The same goes for credit card chargebacks.
     
    freshdevelopment, Oct 18, 2011 IP
    SEMrush
  2. olie122333

    olie122333 Peon

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    #2
    Assuming you use licence keys, you could add code that checks the licence code is still valid each time the program starts, then you can revoke licences.
     
    olie122333, Oct 21, 2011 IP
  3. freshdevelopment

    freshdevelopment Notable Member

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    #3
    Yes I do this already, I was just wondering if there was a way to stop the actual chargeback or get more protection.. Paypal don't seem interested. I am looking into a merchant bank account and my own credit card processing.
     
    freshdevelopment, Oct 22, 2011 IP
  4. expertvm

    expertvm Peon

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    #4
    Unfortunately there is still no solution to the chargeback nightmare that most online sellers are experiencing because it is the bank that is enforcing it and online merchant/processors can't really do anything much about it I'm afraid.

    All the best!
     
    expertvm, Oct 22, 2011 IP
  5. Cucumba123

    Cucumba123 Well-Known Member

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    #5
    If your monthly income exceeds a certain limit, then you can apply for a service where you get personalized care to help you avoid like such problems. I really don't recall where on the site you can apply for such but if you call them up, they will direct you.
     
    Cucumba123, Oct 22, 2011 IP
  6. vididong.com

    vididong.com Member

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    #6
    Keep your customers login and logging, and keep them with your CRM, treat them nice but keep all the records
     
    vididong.com, Oct 23, 2011 IP
  7. Ausdrez

    Ausdrez Well-Known Member

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    #7
    Best suggestion in this case would be the obvious - kick Paypal. I would have suggested you Liberty Reserve (My first choice always) to you - But with seeing your real location being in UK, I would suggest Moneybookers. It is way better than Paypal in many terms, especially it doesn't allow disputes or chargeback. Most important thing is, Moneybookers is originated from UK itself and is the most popular payment processor of UK. Even popular than Paypal in some regions.

    PS: I am not sure how your buyers do it every time. Because every time someone raises a dispute of "Unauthorized" payments from his Paypal, his account is limited and he has to go through a lot of hurdles to get his account and the money back. How are your clients able to do this on frequent basis?
     
    Ausdrez, Oct 24, 2011 IP
    freshdevelopment likes this.
  8. vididong.com

    vididong.com Member

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    #8
    Maybe he got many accounts so limitation is not a big problem
     
    vididong.com, Oct 24, 2011 IP
  9. freshdevelopment

    freshdevelopment Notable Member

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    #9
    I will look into Moneybookers, many thanks for that. I don't have much confidence in them as I haven't used them. Also I am considering Google Checkout.

    To answer your question, it happens with a few different users. It seems to be a common trick to steal software as they know that the seller is not protected. They have to go through a lot of hurdles etc. but it is worth it to them I guess.
     
    freshdevelopment, Oct 25, 2011 IP
  10. Ausdrez

    Ausdrez Well-Known Member

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    #10
    Better than paypal at least. One of the major payment processor. Best thing is - no chargeback, no dispute, just nothing. No matter what.
     
    Ausdrez, Oct 25, 2011 IP
  11. newspanel

    newspanel Peon

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    #11
    sorry to hear about this, and i wish you the best of luck, but thank god i found you, in a few months, i will be building a social networking site, and i will be using an amazon affliate store for users, will deffo be purchasing this!
     
    newspanel, Oct 25, 2011 IP
  12. freshdevelopment

    freshdevelopment Notable Member

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    #12
    Thank you, it isn't a major problem but it is annoying and I don't like thieves getting away with it! Anything you need just let me know, hope to see you on board soon :)
     
    freshdevelopment, Oct 25, 2011 IP
  13. newspanel

    newspanel Peon

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    #13
    yea, i understand how you feel, the site that im building in a few months - i will be taking card processing payments and i know their will be some real fraud and just people making up false lies, you should try and get an merchant account with 2co checkout.

    as what someone else suggested, moneybookers is good alternitive but not everyone has a mb account, and it will take new users who reg at mb to verify their bank/card - so a few days - possible sale opportunies lost their - however with 2co checkout, there's no verifing anything and their systems have Verified by visa and mastercard secure, so anyone who use their own card and saying that they didn't make the purchase - chances are, they are leing.

    Back on to your product - I'm looking to have both uk and us amazon products to shown up on the amazon store, i understand you support this, im just wondering how does it work, - do you have country flags, like us and uk, so like when you click it, it will show you amazon uk products, same with the usa flag?

    Just thinking of a good way to implement both usa amazon/uk amazon together, - making users make purchases easy.

    thanks
     
    newspanel, Oct 25, 2011 IP
  14. vididong.com

    vididong.com Member

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    #14
    vote for MB
     
    vididong.com, Oct 25, 2011 IP
  15. YouCom

    YouCom Peon

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    #15
    I think paypal always have a problem with sellers , they always think that buyer is right. So I think you should either sell to genuine buyer or use some kind of serial key protection in your software
     
    YouCom, Oct 26, 2011 IP
  16. flintR

    flintR Peon

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    #16
    I've experienced a similar situation, after frustration with the limitations that I experienced, I tried to use third-party service, in my case its 2CO and that minimize chargeback, alot..
     
    flintR, Oct 27, 2011 IP
  17. subuno

    subuno Peon

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    #17
    Are these "friendly" fraud or stolen card or account fraud. While it seems to be the same to merchants, fraud is fraud. But one can be addressed while the other can't. Friendly fraud or buyers remorse is something that can't be stopped. However, if fraudsters are using stolen accounts or credit cards to purchase from you, there are a variety of tools that you can use to screen them out.

    Often, an easy way to tell is by look at your transaction data. Look at the IP address, does the geolocation point closely to the billing address. Look at the email address, look it up on a website like Spokeo. Look at the billing address, you can use reverse address of White Pages to see if the address matches the customer's name. If these all fit, then it seems to be more likely that it is friendly fraud and not stolen card fraud. Having said that, fraudsters are often very sophisticated and will make sure that those types of checks match up. But this little exercise might help you in figuring out what kind of fraud you are seeing.
     
    subuno, Nov 1, 2011 IP