Frightening Paypal Story...

[Jim Wilson]

Hey All,

Check out this video:

http://www.youtube.com/watch?v=lr_7--e5A1g

It is sad to think how vulnerable sellers really can be.

Thoughts?

Jim Wilson

[Natalie Williams]

Sellers are vunerable because ebay and Paypal are both only buyer-friendly.

The same thing he described happened to me, except the buyer was an outright scammer. He simply put in a reversal 30 days later.
However, I had done everything exactly according to the Seller Protection Policy and although PayPal froze my account for about 3 weeks, I DID get the money back and it was never taken away from me again.
THIS is a huge reason why I am so careful about who I want to bid on my higher priced items.
They are out there by the thousands just waiting to scam you.

[sprock]

I think the real bad guy here is the credit card companies, not so much PayPal, although I think they are dead wrong for holding that guy's amp hostage for the money the customer reversed.

Besides, didn't PayPal give the seller his money? If the money was reversed (taken from PayPal with the charge back) and they are asking for the $1200 from the seller to get his amp back then that would mean the seller ended up with the money and PayPal was left paying the chargeback ... I'm confused

Back to the credit card companies though ... I think it is sooooo wrong for a customer to issue a charge back with no proof or even recourse.

I had a situation where a customer of my website noticed they had been paying a monthly recurring membership and decided to issue a charge back with out first contacting me. I assume they were miffed that they had been paying me for a membership they were not using.

They issued the charge back on three months (Visa will ony allow a customer 90 days to do the charge back) I challanged the charge back with my merchant provider backing me up ( I have been successfull in charge back reversals 100% of the time, less than a handful over four years though) I got the charge back reversed but I was still charged $25 per charge back because that is what my merchant provider gets charged and I never got that money back.

Here's the kicker ... the customer challenged my reversal stating they contacted me via phone and asked me to cancel the membership (this is what they told their bank) the customer did no such thing but how do I prove they DIDN'T call.

Now ... I could have continued to fight it, but Visa rules state that in the process of this, if they determine against me I will have to pay all fees and costs associated with the review process (the total would have been around $3000). So I had to decide if the fight to keep less than $100 and perhaps get another $75 fee from my merchant provider was worth it, or if I wanted to press ahead and risk having to pay 3 grand.

I decided to drop it, but it taught me this ...

I now have a section in my terms of agreement that talks about the charge back process, it states that if a charge back is initiated and I am awarded a reversal then the customer will be charged all fees associated with the charge back. I don't know how that will hold up in court, but so far it has been enough to keep people from taking advantage of me.

. . . Scott

[pete]

Yeahm I'd say this looks like PayPal was in the middle. They agreed with the seller, and refunded his money. Only when the bank decided to make their customer happy did PayPal turn around and attempt to get back what the bank snatched from them.

It really looks like this guy doesn't understand the entire process. When a card issuer decides they are going to make a refund, PayPal has no choice.

Actually, there is (at least there used to be) an agreement that when you bought through PayPal that you would do a chargeback through PayPal. To do otherwise might cause them to close your account.

It doesn't seem like that is what happened here.

I have also had several instances when all of the logic in the world made no difference to someone sitting behind a desk at a card issuer. Their customer wanted a refund, they promote and promote and promote that you use our card and you're covered. So they create the problem.

But it is the merchant who has to eat the results of those policies. It's really a cost of doing business when you take cards, on or off line. The banks don;t want to lose a customer, so you are going to lose this kind of situation.

And the poor guy talks about how AMEX protects him, and doesn't even understand that that is what his customer's card is doing for his customer. I guess he just wants it both ways.

Like a lot of eBay sellers, he doesn't really understand business. He is creating a lot of sympathy for himself, and a bad name for PayPal, but the fact of the matter is some bank made the decision and he has to eat the unit.