Chargebacks: let`s talk about them

[italiandragon]

Today by trying to find how much my bank charges about some services I accidentally found this about chargebacks:

(13.2) Time limits for reversing a transaction
You should notify ANZ immediately of a disputed transaction.
Visa card scheme operating rules impose time limits after the
expiry of which ANZ is not able to reverse a transaction. The
minimum time limit generally applicable is 75 days after the
disputed transaction but some time limits are longer. In some
cases where the Electronic Funds Transfer Code of Conduct
applies, the time limits may not apply. If you do not notify ANZ
in time, ANZ may be unable to investigate your claim in which
case you will be liable for the transaction.
It is your responsibility to review carefully your statements of
account. ANZ is not responsible for any loss to you if you do not
ask ANZ to reverse a transaction within an applicable time limit.

I`d love to hear what your bank/credit card policies are since most of us thought that 60 days was the maximun......we better know these details!

Thanks

 

[evertonian7uk]

i just got slammed for $2000 in a charge back, i held the site for 30 days, the customer was happy with that, after 30 days i released ti to him (paypal deal) and then b00m 4 hours later, charge back!

i email paypal all the proof that this was a legit deal, including ALL documents from buyer / emails messages etc...

what do they do??? ALLOW THE CHARGEBACK so now im a site down and $2000 out.

no matter what you do, if you use paypal your F**KED, ive learnt my lesson, BIG TIME

i can laugh about it now because pay back is a bitch, and unknown to me, i had accidently left a passage into the code, which i duely exploited daily.

 

[.X.]

Unless it is a person you have known for quite a while, Always use an escrow service for $1000+ transactions

If it is less than $1000 , Tell them they must use a PayPal balance to pay you.

i just got slammed for $2000 in a charge back, i held the site for 30 days, the customer was happy with that, after 30 days i released ti to him (paypal deal) and then b00m 4 hours later, charge back!

i email paypal all the proof that this was a legit deal, including ALL documents from buyer / emails messages etc...

what do they do??? ALLOW THE CHARGEBACK so now im a site down and $2000 out.

no matter what you do, if you use paypal your F**KED, ive learnt my lesson, BIG TIME

i can laugh about it now because pay back is a bitch, and unknown to me, i had accidently left a passage into the code, which i duely exploited daily.

The problem is non tangible goods, PayPal considers electronic transfers of goods, non tangible. It is a he said-he said case, with out any real proof, In these cases the buyer most always wins with PayPal.

 

[Peter]

i just got slammed for $2000 in a charge back, i held the site for 30 days, the customer was happy with that, after 30 days i released ti to him (paypal deal) and then b00m 4 hours later, charge back!

i email paypal all the proof that this was a legit deal, including ALL documents from buyer / emails messages etc...

what do they do??? ALLOW THE CHARGEBACK so now im a site down and $2000 out.

no matter what you do, if you use paypal your F**KED, ive learnt my lesson, BIG TIME

i can laugh about it now because pay back is a bitch, and unknown to me, i had accidently left a passage into the code, which i duely exploited daily.

If I were you I would start taking legal proceedings against the individual. This is obviously a calculated move on their part.

 

[HeyGeek]

If I were you I would start taking legal proceedings against the individual. This is obviously a calculated move on their part.

Good advice. People somehow think that they can chargeback with impunity. As long as you have proof that you sold them a product or a service you can turn the debt over to a collection agency or file legal proceedings. There is no difference between bouncing a check and filing a chargeback except that people sometimes accidently bounce checks and chargebacks are never an accident.

I run a graphic design company and have people frequently file chargebacks (an occupational hazard), I take chargebacks very seriously and treat them the same way as I would someone stealing from my front lawn.

For $2000 I'd take a cheap plane ride to his state and go knocking on his door. People get alot more honest when they see they are dealing with a real person and not just a name on the internet.

Just my 2 cents.

 

[snowbird]

If I were you I would start taking legal proceedings against the individual. This is obviously a calculated move on their part.

Eh, you need to be careful here. If you decide to take legal action, it is probably important NOT to open a dispute with paypal about the chargeback. I am not exactly sure what would happen in an actual case but I do know that the paypal TOS state that if you escilate your dispute, you are letting paypal decide the final outcome of the dispute. I am not sure if that means you cant still take it to court but I am sure that if paypal sides with the party doing the chargeback, then that can become evidence in the court case. If the judge decides to overturn paypal's decision then that is up to the judge I guess. Feel free to correct me if I am wrong.

 

[HeyGeek]

Eh, you need to be careful here. If you decide to take legal action, it is probably important NOT to open a dispute with paypal about the chargeback. I am not exactly sure what would happen in an actual case but I do know that the paypal TOS state that if you escilate your dispute, you are letting paypal decide the final outcome of the dispute. I am not sure if that means you cant still take it to court but I am sure that if paypal sides with the party doing the chargeback, then that can become evidence in the court case. If the judge decides to overturn paypal's decision then that is up to the judge I guess. Feel free to correct me if I am wrong.

I have actually talked with PayPal about this. According to them you always have the right to puruse the customer in any way you choose. PayPal is just the Payment Processor, nothing more. Letting them decide the "final outcome" is just to keep you from suing them, it has nothing to do with your ability to attempt to get the money from the customer in other ways (BTW, "escalating" and "dispute" are terms used in PayPal "complaints", not chargebacks).

Also, there is a very big difference between a PayPal "dispute" and a "chargeback": in a PayPal "dispute" or "complaint" PayPal is mediating. In a chargeback it is the credit card company that is making the final decision (for the most part).

Just remember that PayPal is just a glorified Credit Card Processor, nothing more, and their decisions don't have very much (if any) legal weight when it comes to someone owing you money.

 

[Peter]

Paypal have little say over whether a charge back takes place or not. All they can do is present the evidence to the credit card company and if the credit card company sides with the customer then the charge back will occur regardless of paypal's thoughts on the matter.

Of course once that has been done then they will retrieve the money from the sellers account so they themselves are not out of pocket.

If you pursue the matter further I very much doubt a court would take too much notice of the paypal decision once it was pointed out the process a transaction goes through.

 

[evertonian7uk]

I couldnt do anything, i presented my case to his CC company, i showed them the evidence it was a real deal, i showed them the website he bought, i should them all the transactions between us and they said there client hadnt recieved the goods, the website or the domain, i showed them the whois for the domian, in there clients name, i showed them the site, in there clients name, how doesnt he own it?

they stood by there original desicion based on the fact there client had told them he hired a coder to make the site for him, my problem there was i made him wait 30 days before i gave him the site, in 30 days, in truth it could of been cloned so either way, i lost out.

bottom line, pay backs a bitch and now he cant stop the rot LOL.

 

[HeyGeek]

Paypal have little say over whether a charge back takes place or not. All they can do is present the evidence to the credit card company and if the credit card company sides with the customer then the charge back will occur regardless of paypal's thoughts on the matter.

Of course once that has been done then they will retrieve the money from the sellers account so they themselves are not out of pocket.

If you pursue the matter further I very much doubt a court would take too much notice of the paypal decision once it was pointed out the process a transaction goes through.

Exactly what I was trying to say.

 

[snowbird]

Also, there is a very big difference between a PayPal "dispute" and a "chargeback": in a PayPal "dispute" or "complaint" PayPal is mediating. In a chargeback it is the credit card company that is making the final decision (for the most part).

Thanks for that HeyGeek. Thats actually what I was thinking of when chargebacks come into play. Usually the customer's bank that does the chargeback is able to be challenged with evidence. So perhaps instead of disputing paypal about the transaction, your better bet is supplying the evidence to the customer's bank issuing the card to try to overturn the chargeback.

 

[HeyGeek]

Thanks for that HeyGeek. Thats actually what I was thinking of when chargebacks come into play. Usually the customer's bank that does the chargeback is able to be challenged with evidence. So perhaps instead of disputing paypal about the transaction, your better bet is supplying the evidence to the customer's bank issuing the card to try to overturn the chargeback.

I agree. And PayPal actually does that for you, when a chargeback is issued they request that you (the seller) provide your side of the story, along with any documentation you have. They than review it to see if you have a case, if they feel that you have a case they than forward your information along to the buyers credit card company/bank. I have never had trouble getting them to forward the info to the credit card company.

I recently talked to a PayPal representative about a $500 chargeback I am dealing with, and he said the more information you give them to send the credit card company the better, he said that someone once faxed in over 1500 pages of information, which they then passed on to the credit card company. :o

 

[tinner666]

I guess we'll have to hold the domains for 120 days before transfer.

 

[Dave_Z]

I guess we'll have to hold the domains for 120 days before transfer.

And some people complain the initial 60-day transfer restriction is nonsense.

 

[HeyGeek]

When someone wants to pay you with PayPal for a large purchase simply request that they:
1. Pay you using Mass Pay. This only costs them $1 and cannot be funded by a credit card.
and
2. Select "service" as the item they are purchasing.

This is pretty much failproof as they now cannot do a chargeback or issue a PayPal dispute (PayPal always decides in the favor of the seller with a dispute over a service/virtual item (note: DISPUTE not CHARGEBACK), as a seller I have never once lost a dispute over a virtual item or a service.)

Of course you could always just use Escrow.com....

 

[Name Trader]

What exactly is the difference between a PayPal Dispute and PayPal Chargeback?

Nice thread Lorenzo. Even if it has kinda gone to a PayPal thread.

 

[smashfactory]

When someone wants to pay you with PayPal for a large purchase simply request that they:
1. Pay you using Mass Pay. This only costs them $1 and cannot be funded by a credit card.
and
2. Select "service" as the item they are purchasing.

This is pretty much failproof as they now cannot do a chargeback or issue a PayPal dispute (PayPal always decides in the favor of the seller with a dispute over a service/virtual item (note: DISPUTE not CHARGEBACK), as a seller I have never once lost a dispute over a virtual item or a service.)

Of course you could always just use Escrow.com....

what is mass pay, and why cant it not be refunded?

 

[Dave_Z]

What exactly is the difference between a PayPal Dispute and PayPal Chargeback?

http://www.paypal.com/cgi-bin/webscr?cmd=p/sell/chargeback_risk-outside#goto2

What is the difference between a chargeback and a PayPal dispute?

A chargeback occurs when a buyer asks their credit card company to reverse a transaction that has already cleared. A buyer may file a chargeback with their card issuer based on credit card association regulations and timeframes.

A PayPal dispute is the first step in the PayPal buyer complaint process. This is when buyers and sellers can post messages to each other in the PayPal Resolution Center and try to find a mutually acceptable resolution to the problem.

 

[HeyGeek]

What exactly is the difference between a PayPal Dispute and PayPal Chargeback?

A dispute it you complaining to PayPal, PayPal then decides the validity of the complaint. A chargeback is you asking your credit card company to take the charge off your statement (and take the money back from PayPal, who then takes it back from the seller).

what is mass pay, and why cant it not be refunded?

Mass Pay is payment that the sender pays the fees for ($1) instead of the receiver paying a percentage to PayPal. Mass Pay can only be funded by your PayPal balance (no Credit Cards) so there is no way the sender can charge it back. The sender can still open a PayPal Dispute, but as long as the dispute is over INTANGABLE items (websites, domain names, design services etc..) the seller will win every time, as PayPal does not provide dispute resolution for those items.

 

[smashfactory]

i was just reading up on mass pay- seems more involved than that- i imagine if it was that easy we would have all been doing it and not paying any paypal fees, no? buyer needs a bussiness acct, needs to have some sort of tab file set up, ect..