Lets presume I sell 10 product each of 250$. Now, out of 10 , if one comes back as Chargeback and If I loose the case , will paypal block my account ? How Charge back thing works and whats the limit ?
Nope paypal won't block your account, however the amount of charge back will be held by paypal till the case is decided and if you loose that case paypal will refund that money to buyer.
Chargeback is granted by the bank to the card holder as an option if the merchant did not deliver the products in good standing. Typically the time frame in which the card holder can launch a chargeback is 180 days from the time of the transaction. Usually it is an option used when all the other methods to rectify the situation is exhausted. So to win the chargeback, the vendor must provide evidence that he delivered the items in good condition to the card holder address. Some evidences would be Invoices, Shipping Documents and Proof of Delivery (signature that the card holder receives the item).
Nice one. But what if customer keeps the product and launch a case saying that product received is not up to the mark. In that case, can one ask the customer to return the product so that vendor can refund the money ? And that will convert case from Chargeback to Refund ?
Well, if you can provide proof of delivery and that you mailed the product to the customer, he would have very little chance of launching a chargeback. That is why Paypal requires you to use a shipping service with online tracking and best if it comes with a signature of the customer to prove that it is delivered.
Also, lets presume if I am selling something online but sending the package by USPS service, how taxation thing comes in effect ? Should I charge some tax ? Do I need to pay any tax to the government ?
You would certainly need to declare income for taxation purposes. As for any sales tax, it would depend on your local tax laws. You should consult your tax accountants in regards to that. But yes, with Paypal, you are responsible for collection of tax and VAT where the situation calls for.
Use DHL, Fedex or one of the other courier companies which does online tracking. Or use the POS PosPriority Express which has real time online tracking. Before you ship, you can contact the customer to verify the order and that the address matches the IP address in terms of country. Paypal does not typically offers Seller's Protection for Malaysian vendors so you need to take all steps to ensure that you do not get cheated. Paypal is not there to witness the transaction or that the goods are sent so everything is based on you as the seller to prove that you taken all due diligence and that you send to the rightful account/card holder in good faith. If your company does not provide invoices and so on to your customers, ensure that you use the Paypal Request for Money or Invoicing and also use the Paypal shipping documents which can be printed from the paypal website and send that to your customer. Ensure that you have sufficient copies pasted on the outside of the box for the US customs purposes.
There is no set rules of percentage of charge back. As far as you take the liability and whenever payment reversed you have sufficient fund immediately available to give refund that is ok. From my experience it sound to me up to 20 % is ok and keeping it under 10 % is advisable.
What if a customer opens a chargeback ticket stating product not recvd or unauthorised charge ? Even if customer pays by himself and can provide tracking number to pay, to track the shipment.
Well, if you can provide evidences such as proof of delivery to the customer's mailing address and that the item actually did reach him, he can request for a chargeback all he wants but he is not going to get his money back. If his mailing address is used then the card holder cannot claim it is an unauthorized charge. If he does not want the item, he should at least return it to you before you return his money. Chargeback can only be used if the supplier did not ship the item or it has been misused. Usually in an unauthorized charge situation, you should probably see like the customer is from one country and the card is from another or that both the customer name and the name on the card is totally different. In whatever situation, as a seller, you need to ensure that you do your due diligence to by making sure that the order looks and feels right.