Paypal should not do Chargebacks. I believe that before a seller paying a member he should do his research and think before paying him. After you sent the money and found out that hes a scammer, i consider that bad luck. I dont think Paypal should come in between buyer and seller. Many legit sellers such as myself deal with so much chargebacks from scammers that take your service/product and do a chargeback and get their money back as paypal dont support virtual goods. We sellers are stuck with paypal as its the most used compared to others.
As a buyer you can pretty much do a charge back on anything that hasn't been physically shipped to you. This freaks me out since I do web design for a living and 50% of my business is done through PayPal.
Yeah, and we are always likely to lose the dispute as its not a physical item as we are sellers. It wastes our time and money.
Whatever PayPal do there will be always someone not completely satisfied / penalized. MoneyBookers protect the seller more than PayPal. Or it's not an option for you?
I am sure you know what Chargeback is and if you don't, here it is. A Chargeback is a service provided by the bank to its credit card holders and they can use that option if they did not receive the product/services or they are not satisfied with the order. This option is open for 180 days from the time of billing and supersedes Paypal's decisions so the only way Paypal can disallow Chargeback is to totally stop accepting credit cards altogether. Basically when a customer raise a chargeback at the bank, he would need to provide a reason for it then the bank would do a follow up with the merchant, in which case, this would be Paypal. Paypal would need to provide proof that the item is being shipped to the customer in good order and this is where you need all the shipping documents which would show that the item is shipped and the customer received it. If you cannot provide those documents, the bank would not accept your challenge. Remember that it is actually in the best interest of Paypal not to allow the chargeback because if it does, it will lose the tiny fees which they have earned from you because of the transaction. To allow the chargeback, paypal not only lose their income, they would need to pay a hefty chargeback fees and they may be out of pocket because some merchants would have withdrawn the money already leaving Paypal to pay the customers. However, the reality is that if Paypal cannot prove that the merchant actually sends the products and that the customer actually receive it, there is little they can do about it to protect you. That is why they came out with the Seller's Protection in the User agreement which lay down exactly what you need and must do to get protected, ie challenge the bank if the customer issue a chargeback. Moneybookers does things a little differently. For the most parts, it require the customers to fund the account then use the virtual funds to pay the merchant. By doing so, the transaction between the customer and the merchant would no longer use the credit card and thus not subjected to the bank's ruling. I know moneybookers offers the merchant services in which your customer can pays you directly through their credit card but the fees is much higher than paypal at 8%. Most orders would come through as legal and the extra income they earn from you would be used to cover any chargeback fees along the way. Of course, if in the end, the cardholder complains that his credit card is stolen, he would most likely win the case, in which case, Moneybookers would absorb the loss or pass them to you if chargeback becomes too frequent or hefty for them. In the online world, the merchant is always the one who needs to accept the risk because there is no prove that the buyer actually place the order or a signature or a physical card to prove. That's just the reality of life. You are not force to use Paypal. Remember that technically speaking, anyone who sign up with Paypal needs to be verified and in order to get verified, they would either need a Bank account and a Credit Card. For those countries which can verify with a bank account particularly the US and the UK, it is very easy to obtain credit cards. So as long as you can accept credit cards as a payment option, you would be able to receive from the entire world. The point I am getting is that you do not need to lock yourself to just Paypal. Use a 3rd party payment processor like 2checkout.com or plimus.com which can accept credit cards and have good pre-approval checks to minimize chargebacks would be a better move. Forget about Paypal. Places like 2checkout.com and Plimus.com requires customers to provide full particulars about themselves and they will do checks like determining if the customers comes from the country he claims, if he has been involved in chargeback-schemes before and so on or if there is any illegality in their accounts before passing the transaction to the bank for approval. That extra steps does help a great deal. People who claims they can only pay you via Paypal are probably out to default you because these may be people which Paypal did not want in the first place or you would not want to deal with, people who are out to cheat, who sign up using fake information, who are underaged or who have bad credit history. Otherwise, they would have credit cards since that is one of the requirement to getting a paypal account verified or spending limits lifted.
i think you dont know that PayPal have no control over chargeback as chargebacks are made by the credit card issuer or the bank that issue the credit card... and its the bank that take the money by force from paypal when the buyer claim for a chargeback... but there are certain ways to stop chargebacks.... all you have to do is google it...
you need to know few things about 2checkout, plimus, clickbank etc.etc.... on these service you will get your account closed if you get 2 or 3 chargeback or paypal reversal.... 2checkout, plimus, clickbank are all famous for closing accounts if 2 or 3 fraudulant payments are made.... and once they close your account you will not be able to open a new account under the same name.... and also 2checkout and clickbank are not free to join.. you have to pay a one time setup fees of $50.... and if they close your account then you will not get back your setup fees... only plimus is free to join... so becareful before you join them....
What if I have paid some one over paypal using credit card and if in case I go for a chargeback he does not have any funds in his account...then who will pay me the chargeback money....?
If you do a chargeback and your bank approve it then the money would comes out from Paypal's own bank account if the seller withdrawn the money already. Of course, paypal may go after the seller when that happens through a collection agency. Doing a chargeback is like going through the Supreme Court while a dispute through Paypal is just like going through the district court. The Supreme Court decision would overweighs that of the district court.
As you said that Paypal may go after seller when chargeback happens.., you meant that would go to their residence...? What if the residence addresses the seller has provided is wrong?
Well, for those who planned to sign up with fake details may probably not get caught. I supposed it may be possible to track the person down but it is probably going to be very expensive a root to take and in which case, Paypal would just be absorbing the total loss of the chargeback while keeping the seller's account limited (which probably means nothing to the cheat). Yes, paypal would send collection agency to the residence to collect the money if the money owing is worth the while.
On average, what percentage of your orders are fraudelent with paypal? Compare that to the number when accepting credit card directly with a merchant account and I think paypal is still a more secure option