What to expect with a credit card chargeback through Paypal?

ctf_error_coins · February 3, 2016 2:32AM

A few weeks back, I sold $650 worth of coins from my website.

Paypal is my banker. Paypal said the card was good and that it was OK to ship. I clicked on the paypal shipping and shipped the coin with tracking through paypal.

Yesterday I get a credit card chargeback saying this was an unauthorized charge. I then clicked on the paypal track shipping link and it says that the coins were delivered. I did not insure as I self insure.

I called paypal and entered the tracking information and they are looking into this.

What can I expect for those who have gone through this?

ebaybuyer · February 3, 2016 2:42AM

did you use signature confirmation ?

ctf_error_coins · February 3, 2016 2:43AM

Originally posted by: ebaybuyer
did you use signature confirmation ?

No

ebaybuyer · February 3, 2016 2:47AM

paypal does not require it unless over $750 I believe but I use for everything over $100. your case is easier for paypal to prove when you have the guy's signature, as for what to expect, the last one I had was for like $50, paypal covered it, as I had proof of shipment and the tracking number said delivered, for that amount signature confirmation is a good habit to get into for the few extra dollars

RichieURich · February 3, 2016 2:52AM

Credit card and PayPal chargebacks are the reason we don't accept credit cards or PayPal.

Too many "unauthorized charges" where your money goes away and you don't get your coins back, which is very unprofitable for the business.

davewesen · February 3, 2016 2:54AM

from what I have heard, you can expect $650 withdrawn fro your PAYPAL account

ctf_error_coins · February 3, 2016 3:00AM

ebaybuyer, thank you

davewesn, they did that, but put it back (for now), after I called and gave the tracking number.

RUR, I thought about not taking CC through paypal, for about a minute, but figured it may be a bad idea and lose sales because of it. I may have to rethink it after paypal gives me a decision. The cool thing about error coin collectors is almost all are super honest and this is very uncommon, not like they are stealing gold bullion.

OPA · February 3, 2016 3:14AM

You are covered under their seller protection program as long as you complied with their guidelines, which btw, you did. ( shipped promptly with tracking.. item was delivered...sig. conf. not required for under $750 transactions)

edited to change buyer to seller protection...

ctf_error_coins · February 3, 2016 3:19AM

OPA, thank you, that why this forum is soooo awesome, fast knowledgable information on any subject related to coins.

ebaybuyer · February 3, 2016 3:37AM

sig confirmation not required but for the cost, you may want to use it anyway for anything over what you don't mind losing. again, this will assist paypal in their case with the cc company. my rule is anything over $100 goes sig conf period. yes its a few bucks more but that signature is hard evidence against an "unauthorized charge" claim

bolivarshagnasty · February 3, 2016 3:42AM

Currently three dollars extra for the signature confirmation at USPS. I definitely use it if I have not done business with this person, or it is a high value item.

As a buyer returning something to a seller, I always use it.

LindeDad · February 3, 2016 3:44AM

Originally posted by: ebaybuyer

sig confirmation not required but for the cost, you may want to use it anyway for anything over what you don't mind losing. again, this will assist paypal in their case with the cc company. my rile is anything over $100 goes sig conf period. yes its a few bucks more but that signature is hard evidence against an "unauthorized charge" claim

Got in the habit of getting the Signature when it was lower, still do any over $200.00 for me.

ctf_error_coins · February 3, 2016 3:47AM

If paypal seller protection covers you for under $750 with no sig, then it make no sense to spend the extra for the Signature .....

LindeDad · February 3, 2016 3:54AM

Human nature is in play. Your not going to sign for something then say you didn't get it.

Pokermandude · February 3, 2016 3:57AM

Paypal will put a hold on those funds while they fight for you against the chargeback. As long as you met the seller protection requirements (online viewable tracking number, signature if it's over a specific amount), then you shouldn't end up being out the money. Although it is still possible

ctf_error_coins · February 3, 2016 4:36AM

I just finally read the paypal seller protection policy and clicked on the transaction and it said "Seller protection

Eligible" so it seems that I am good to go ....

Paypal is an AWESOME service.

ebaybuyer · February 3, 2016 5:30AM

"If paypal seller protection covers you for under $750 with no sig, then it make no sense to spend the extra for the Signature ..... " ... ask anyone who has had their funds tied up with paypal, they will disagree.

bestday · February 3, 2016 5:45AM

Originally posted by: Pokermandude
Paypal will put a hold on those funds while they fight for you against the chargeback. As long as you met the seller protection requirements (online viewable tracking number, signature if it's over a specific amount), then you shouldn't end up being out the money. Although it is still possible

Will PayPal eat the lost money?....CC companies will not require Customers be charged for something they claim was not authorized..

ctf_error_coins · February 3, 2016 5:51AM

... ask anyone who has had their funds tied up with paypal, they will disagree.

The two times that paypal has put a hold on my money (this being one of them) all I did was call and they took off the hold because of my stellar record with them.

Topdollarpaid · February 3, 2016 7:41AM

You don't need signature confirmation under 750.00

If you shipped to the PayPal confirmed address and you uploaded tracking

You should be in the clear

I just went through it for 1700.00 and the PayPal protection covered me since I did the above steps

OPA · February 3, 2016 8:21AM

Originally posted by: Topdollarpaid
You don't need signature confirmation under 750.00

If you shipped to the PayPal confirmed address and you uploaded tracking
You should be in the clear

I gust went through it for 1700.00 and the PayPal protection covered me since I did the above steps

Mine was only in the $500 range....no issue. (That's why you are paying 3% in fees, part of the expense against d.b. & scammers)

derryb · February 3, 2016 11:05AM

Chargebacks for items Significantly Not as Described are not covered by paypal seller protection. Paypal will speak in your defense with the credit card company and provide them whatever documentation is available but the decision to process the chargeback rests with the CC company and not with paypal. PP will fight your fight with the CC company but will hit you with a chargeback if the CC company ends up processing the chargeback on behalf of their client, the CC account holder. This is the Achilles Heel of paypal seller protection.

From the Paypal user agreement:

"11.5 Items/transactions not eligible for PayPal Seller protection.
The following are examples of items/transactions not eligible for PayPal Seller protection.

Intangible items, including Digital Goods, and services.

Claims or Chargebacks for Significantly Not as Described.

Items that you deliver in person, including in connection with In-Store Checkout.

PayPal Direct Payments.

Virtual Terminal Payments.

PayPal Business Payments.

Items that are not shipped to the recipient's shipping address on the Transaction Details Page. If you originally ship the item to the recipient's shipping address on the Transaction Details Page but the item is later redirected to a different address, you will not be eligible for PayPal Seller protection. We therefore recommend not using a shipping service that is arranged by the buyer, so that you will be able to provide valid proof of shipping and delivery."

Also sellers on ebay do not have the option of electing not to accept credit card payments through paypal. If you accept paypal, you are forced to accept credit card payments through paypal. The only way around this is to not accept paypal and this can only be done if you accept other electronic methods of payment (direct payment to you with a credit card for ebay purchases). This puts you right back where you started, vulnerable to a CC chargeback.

kaz · February 3, 2016 12:42PM

Thanks for posting this, these threads are very informative for those of us who are not regular sellers but may be in the future!

grote15 · February 3, 2016 3:48PM

This is not a SNAD claim, so as long as you followed paypal regulations and qualified for seller protection in the process, you should prevail. The buyer may get his money back if his CC initiates the chargeback, but you should still have your funds, too, because of paypal seller protection, in which case paypal will eat the loss. That has been happening with more frequency lately.

derryb · February 4, 2016 4:23AM

hopefully the OP will let us know how this plays out.

Edited to add: I'm always skeptical of what paypal will do once a chargeback is filed.

ctf_error_coins · February 4, 2016 4:27AM

Absolutely, it may take 70 days tho ....

Now that I have educated myself on the payapl seller protection policy (EVERYONE NEEDS TO READ THIS) I Know for sure paypal will eat it if the CC refuses to pay.

What an awesome service they have .....

ctf_error_coins · February 4, 2016 4:28AM

Always check to see if you are eligible for paypal seller protection, before mailing ....

derryb · February 4, 2016 4:33AM

Originally posted by: ErrorsOnCoins
Always check to see if you are eligible for paypal seller protection, before mailing ....

Unfortunately, that will mean nothing if the buyer later files a chargeback claiming Significantly Not As Described. Kinda voids your warranty.

But, while your checking your details page after the sale always make sure it also says "OK to ship." Sometimes payments are not instantaneous and require a couple of days to clear and not all of them always clear. An "OK to ship" tells you payment cleared.

davewesen · February 4, 2016 4:43AM

The buyer did not want to return these items, or are they just thieves (or credit card forced initiation)? or did you send somewhere else on a stolen card?

ebaytrader · February 4, 2016 6:24AM

PayPal has a huge security hole insofar as with hacked accounts, stolen cards, and cards #. That's why they bang you for a 2.9% transaction fee - to cover their hole. If I hack your PP account I can redirect a bullion shipment to a drop box, and it's gone forever. Or, I may choose to fly under the radar with a rash of sub $750 scams before you realize your card has been compromised.

If you are running your own web site the best thing you can do is go with a processor like Authorize.net, Elavon, etc. that provide ANTI-FRAUD MEASURES that YOU set up. You can filter out a lot of scammers by only shipping to the card owner's address of record with signature confirmation. Another is limiting the amount charged. I'd rather pay your wire fee than accept a credit card with the potential pitfalls for thousands of $$$. With the new chip cards my swipe rate has dropped to 1.12% which would seem to reflect the better, but not best, security.

With the newest chip cards a great deal of fraud that was in card duplication will move to the web. What makes those cards safer in the European market is that they also require a PIN number to be entered when using those cards. No so here, and still that leaves the window open a crack to defraud merchants. Be safe out there!

bestday · February 4, 2016 8:32AM

Originally posted by: derryb
Chargebacks for items Significantly Not as Described are not covered by paypal seller protection. Paypal will speak in your defense with the credit card company and provide them whatever documentation is available but the decision to process the chargeback rests with the CC company and not with paypal. PP will fight your fight with the CC company but will hit you with a chargeback if the CC company ends up processing the chargeback on behalf of their client, the CC account holder. This is the Achilles Heel of paypal seller protection.

From the Paypal user agreement:

"11.5 Items/transactions not eligible for PayPal Seller protection.
The following are examples of items/transactions not eligible for PayPal Seller protection.

Intangible items, including Digital Goods, and services.

Claims or Chargebacks for Significantly Not as Described.

Items that you deliver in person, including in connection with In-Store Checkout.

PayPal Direct Payments.

Virtual Terminal Payments.

PayPal Business Payments.

Items that are not shipped to the recipient's shipping address on the Transaction Details Page. If you originally ship the item to the recipient's shipping address on the Transaction Details Page but the item is later redirected to a different address, you will not be eligible for PayPal Seller protection. We therefore recommend not using a shipping service that is arranged by the buyer, so that you will be able to provide valid proof of shipping and delivery."

Also sellers on ebay do not have the option of electing not to accept credit card payments through paypal. If you accept paypal, you are forced to accept credit card payments through paypal. The only way around this is to not accept paypal and this can only be done if you accept other electronic methods of payment (direct payment to you with a credit card for ebay purchases). This puts you right back where you started, vulnerable to a CC chargeback.

With Amex it is a lost cause .. they will side will their card holder just about every time ...

RichieURich · February 4, 2016 8:47AM

Just about every credit card agreement says if you don't agree with their action, you can refer the issue to a panel for arbitration.

Rumor has it that the arbitration panels are mostly people who work at credit card companies.

What to expect with a credit card chargeback through Paypal?

Comments

Leave a Comment