Today I would like to discuss the process of selling electronic goods and accepting payments via Paypal. Everybody knows that Paypal is safe for buyers and they take care about every cent, spent by buyers. But are sellers protected as good as buyers are?
I have started a shop selling electronic goods about 2 months ago. For this period of time I had lots of chargebacks and payment investigations and I would like to discuss various ways to avoid losses (i.e. you have already delivered your service or product and get a chargeback after 3 days or even after 1 month).
First thing I implemented to protect myself against fraud payments was to deliver electronic goods to Paypal e-mail. It greatly decreased the number of fraud purchases, as this way user must have access to e-mail, associated with a Paypal account, not only to account itself. I am sending the link to Paypal e-mail after a successful payment and the only way to get the service or product is to click the link in the e-mail. You should add NO EXCEPTIONS for that rule (recently I was contacted by e-mail by a user telling me that he has problems accessing his Paypal e-mail and asking to send the product to his alternative e-mail. I have sent the product, and got the refund the next day – don’t repeat this).
I have also limited the amount of money spent by untrusted users. If a visitor comes to my site for the first time and tries to purchase something valued more than $50, he doesn’t get the product delivered after payment. He is asked to contact me using his Paypal e-mail to confirm the decision to purchase. This will help me to prove that I have really delivered the product in case of a claim. If user is a returning buyer, there are no limits.
Since Paypal doesn’t protect sellers in case they don’t provide physical delivery, you should protect yourself. If you know any other methods that could help to stop getting notifications of reversal payments and claims, let me know. Let’s make the sellers more protected!