Hello guys and gals So i am a online individual software seller. I sell a individual software license for around 49$. The problem is lately, i have been recieving many fake chargebacks (obviously cuz the license code is used after payment and then after a week, a month or even after 4 months of sale) a chargeback dispute is created in my paypal account from which 49$ have been deducted. I have already set on the payment page and on tos that the payment would be non-refundable. But these scammers won't really ever get this into brains So now my problem is: 1 ---------> Even if i accept the chargeback to be my fault and just tries to accept it as my liability and refund that money, i am charged 10$ extra from my account + the money is also sent back to buyers account. i.e. means 49$ sell, 49$ chargeback and on accepting the liability (to refund) i am charged another 10$ from my account Suppose a situation There are 10 sales of a application: Account Balance: 49 x 10 = 490$ I have that money as it was in my account After few days / months, chargeback were created (with the reason Unauthorized payment, fake obviously), so Amount Deducted: -49 x 10 = -490$, Account Balance: 0$ Now i have i think 2 weeks to respond to a chargeback (or is it 1 only). If i don't respond to the chargeback then i am charged extra 10$ for each chargeback, which means: Amount Deducted: -10 x 10 = -100$, Account Balance: -100$ And if i accept it as my liability and close the case, same goes: Amount Deducted: -10 x 10 = -100$, Account Balance: -100$ So in all, there is no earning, the buyer enjoyed the service (application here in the case) and i got a negative balance just because i was trying to sell an application. Huh! Thats crazy Now, i want to know from experience seller over here that what to do in this situation. It was even fine that to simply refund the money, but the negative account being added, what can be more worse then that 2------------> Most of these negative payments are as a result of chargebacks, not of Paypal dispute. So is there any ways to prevent accepting payments through credit cards (so that no chargebacks could be created later, only paypal dispute). The reason i am asking for a paypal dispute is that here the paypal team is the judge and i can provide proof to them and decision is more likely in seller favour (if sufficient proof is given). However in case of a chargeback, decision is in Credit Card company's hand to which i don't even have a contact with. Any way to do so? Also, is their any kind of paypal payment selling box where i can show a paypal agreement and make user agree to it before paying that the money being paid would be non-refundable in any case. (dispute or chargeback) Any further tips would be helpful Thank you
We all have the same problem and there is no solution until concurrence explains to Paypal that they should treat us better....But where is the concurrence now ? Still thinking ? Incredible that Paypal is let alone doing this business ! Hate them !
The only solution is to charge people extra who pay with paypal. Offer another options, just from credit cards, and then have a notice on paypal that the price is higher when using paypal due to a higher fraud rate. Make it a big difference, too, like at least 20% more. This will make people think twice about paying with paypal. Unfortunately, if they already have it set in their mind they want to scam you then they will still do it because they will just issue a charge back. The only real solution is to no accept paypal.
What percentage of your orders are being charged back? Can you make a function in your software that deactivates it if the user disputes a transaction?
You have a few options here,First, Wherever you are marketing your software, post in big red bold letters at the top of the description "Software will be de-activated if a chargeback is filed". You could even add something like "All chargeback fees will be handled by the customer if they choose to chargeback". Phrases like these tend to scare off potential threats fairly easily.Second, Do what the above poster stated. If you are experienced enough to create this software, it shouldn't be a problem to implement a "kill-switch" if you will, to de-activate the software when a buyer issues a chargeback.Third, Stop accepting credit card payments through paypal. This one is probably the easiest of them all, but could limit your business. Chances are, if a buyer is wanting to use a credit card, they are going to charge back. From my experience on ebay as a seller, i had a much better selling experience after i quit accpeitng credit card payments. I sell high dollar items, and people seem to think they can pull this chargeback scheme off quite easily. You can go into your paypal account settings and turn off the credit card payments option. This would mean they can only pay with a direct balance, or with an E-Check, both of which can not be chargedback.hope this helps! Good luck
Hey! I'm new to this forum, so just poking around a little. I know this is an old feed, but I'm curious to know how things have played out. Are you still in business?! I know that if more than a certain percentage of your sales end up as chargebacks, you could loose your processor (and get a fee that is a lot more than $10!).
Hi, I have had the exact same problem before, but unfortanley there isn't any cure for this problem, we'll just have to wait out for PayPal to start taking actions against these scammers.