How Do You tackle Paypal Dispute and Claims by Customers ?

[DabDab]

This is slightly off topic yet it is very important to all of us, I need to know how you guys tackle the Paypal Dispute and Claims by fake Customers. From my previous sample and music selling experience I have found lots of the time End users claim for Items not as Described or the typical Items not received etc claims..... often times users do it to get it for free. Paypal has a very bad system of Holding money before going to investigate the mater of fact. Even Paypal A/c balance becomes negative(after money transfer). How do you guys tackle those users ? sometimes polite behavior dosn't make sense for the fraud users. What is the legal step after submitting all the evidences to Paypal. What are the other steps to get rid off this kind of Paypal issues by fake users for future. What are the other gateway like Gpay etc besides Paypal.

[Goodflow]

@DabDab IME there doesn’t seem to be a bulletproof solution for fraudulent PayPal disputes. In the past I’ve been able to reduce the frequency of them by:

• using a platform that focuses on digital goods. In my case, that meant migrating from woocommerce to easy digital downloads. Besides eliminating all of the variables associated with physical goods (item size/weight/shipping/inventory), it allowed for a streamlined way to log IP/location at time-of-purchase as well as download. That info alone was enough to swing some cases my way.

• applying a “no questions asked” refund policy and making sure all potential customers are aware of the policy. Of course, you’ll get some bad-faith purchase/return loops, but that’s less costly than chargebacks in multiple ways.

I tend to see chargebacks as falling into 3 types

• legit customers that turn to disputes to avoid the communication involved in a normal refund (sometimes not realizing the damage done by chargebacks, sometimes simply not caring). I’ve seen users turn to chargebacks if their support ticket isn’t answered within 15 minutes.

• “Customers” buying with the sole intent of seeking a refund/chargeback for free product

• “Customers” actually using stolen card info to purchase the product (often with VPN/proxy/false info, I traced more than a few of these to folks sending the software to crack teams)

The first type can be largely mitigated by good documentation/extra friendly customer support/heavy emphasis on easy refunds for unsatisfied users. Thorough purchase/download records (IP logging, etc) can control the second type pretty well. The third type is a hopeless case; best course of action seems to be using a platform/processor that flags/refuses suspicious payments.

Some sellers may let the first type slide/try to win them over, but types 2 and 3 should get an instant, site-wide block. They will 100% pull the same trick again if given the opportunity.

Unfortunately PayPal seems to side with customers if they press the issue enough, regardless of the evidence against them. It ultimately comes down to whether they’re going to have the time/gumption to complain their way up the customer service chain until someone folds.

[DabDab]

@Goodflow Thank you very well written. Thank you sharing your valuable information and experiences.

[DabDab]

@Goodflow said in How Do You tackle Paypal Dispute and Claims by Customers ?:

@DabDab IME there doesn’t seem to be a bulletproof solution for fraudulent PayPal disputes. In the past I’ve been able to reduce the frequency of them by:

• using a platform that focuses on digital goods. In my case, that meant migrating from woocommerce to easy digital downloads.

How do you tackle the "Item is not as Described" claim ? Let's assume you are selling a Piano VST. It is hard to prove to Paypal that the product is genuine since it is a digital product. Or rather I can ask you "How do you tackle this issue and submit the evidence to Paypal to prove yourself?" . What are the legal steps? I have seen after agreeing with all the T&C and Refund policy people do this trick to get the product for Free by complaining about it to Paypal. And Paypal has a very bad system, they always hold the money first before going to the details of the matter.

[Goodflow]

@DabDab Because selling Software doesn’t involve the paper trails and delivery confirmations you get with selling physical goods, you’ll want to collect as much information as possible to support 2 points:

1. Your product is clearly and accurately described, as is your return policy (links to site/documentation, screenshots of the product, show that the refund process is reasonably accessible, etc)
2. If the customer experienced an issue, they did not seek customer support/refund (this is where you’d show that they purchased and downloaded from a specific IP. If there was any communication to/from the customer, report it. If not, report that there was no communication)

If you have a demo version available for your plugin, consider logging IPs for those downloads. If you can connect that to the bad-faith purchase, that's evidence that the customer used the software before deciding to purchase it (which conflicts with the "not as described" claim)

If you don’t have a demo version, consider offering one. Some people see a lack of demo as justification for acquiring the product illicitly (to "try it out"), and that can include filing a chargeback. Offering a demo also provides you with one more point of evidence that you are not misrepresenting/obscuring your product’s capabilities.

Time is a big factor in addressing these disputes, so it’s a good idea to have a template stating your case so you can submit your info quickly. For example, all of the info about your product will be the same across cases, so you can have that ready to copy and paste at a moment’s notice.

Also, it’s important to make it clear throughout the process that you have been and are still willing to issue a refund. I’ve had holds lifted in the past to allow me to return the payment myself.

[DabDab]

@Goodflow Excellent.. very well described. Thank you for sharing your experience. :)

[gorangrooves]

@DabDab The main point I disagree with @Goodflow is that you need to move away from WooCommerce. You don't.

WooCommerce is perfectly adept at handling everything you need. For additional features and functionalities, there are plenty of add-ons.

The fraud protection is implemented by your CC processor, not by WooCommerce.

I've had a few customers claims through PayPal, and I won them all.

When somebody states that "Item is not as described", what you need to do in the PayPal dispute is request the customer specify exactly what is not as described and provide evidence of such a claim. They fall on their face pretty quickly then.

For your evidence, you need to prove that they obtained the digital product.

Take screenshots of their orders in the backend and highlight their IP, contact info, and that they downloaded the products. Provide your Terms and Conditions along with it.
WooCommerce will also give you access to download data for every order, which includes the time stamp and IP.

Give your best to describe your products in detail and provide a free trial. Of course, you can never make people read and prevent them from assuming something is included or that your product does something they imagine, when in fact, it does not. But that's on them. Just because they expect something they were not promised doesn't entitle them to the product for free.

I don't offer a "no questions asked" refund policy, as @Goodflow suggests, but a "no refund" policy. I include a lot of information, accurate descriptions, demos, and a free trial. No refund policy is much stronger in a dispute than a "no questions asked" refund policy, which poses the question of "why are we disputing then?"

[DabDab]

@gorangrooves Superb... That's what I was looking for. (y) :)

[BWSounds]

I haven't gotten any in yrs but TIME will be your best attribution to winning disputes in my opinion.

Once PayPal sees you conduct business on the regular and ppl rarely dispute you and you keep your account in good standings you'll be eligible for seller protection.

You'll then (most likely) win all disputes except instances where the customer claims their card was stolen and has that card canceled by their bank. Most ppl wont go through all that trouble though.

I would send proof they completed the sale which is a 3 step process and show that they already downloaded the software, so they will have access to software forever. I also mentioned I had a "all sales are final" note posted on my checkout page.

[ustk]

@BWSounds Don't tou propose any refund policy?

[gorangrooves]

I'll add something else.

While I aim to discourage refund requests, I am also always open to accommodate customers, and how I go about it usually depends on how they approach me. If they come to me with a self-entitled attitude, I dig my heels in.
If, however, they make a genuine mistake and ask nicely, I give my best to accommodate them.

Sometimes this opens an opportunity to upsell them with a discount coupon for another product.

Just yesterday, I had an older customer who purchased one of my drum plugins, not realizing that MIDI loops were not included, and was wondering if he could get a refund because he thought the plugin would be useless to him. Normally, I would decline them and point to the loops they can purchase separately, but since this gentleman was on a tight budget, I declined the refund but gave him a comprehensive MIDI pack for free.
He got a great deal, and I got the keep the sale and the customer.

Our saying is "customer is not always wrong."