| Shadowday144 2004-09-21, 7:29 pm |
| For buyers, when doing mail order purchases, there is protection
against fraud. If they use a credit card to purchase something
directly from you the vendor, they can charge it back if they don't
receive the goods or receive something different from what was
advertised. But once you introduce a third-party payment service into
the picture, those rights become a little hazy. Some credit cards do
not allow third party payment services at all. If they use one, they
lose all rights. Some third party payment services do not allow charge
backs or only allow it if they go through them. Then you are subject
to their rules. This is perfectly acceptable if you could read and
understand their rules. But the major credit card payment service
Paypal has changed their rules often and even made them retroactive.
Their rules are so ever-changing and complex, that folks have called
Paypal's Customer Service (and eventually managed to get through) and
were given different explanations by different people or explanations
that completely contradicted Paypal's FAQ.
The typical process is that they are told to wait 30 days. Then they
are told to send the info to Paypal and wait. Each time they contact
Paypal, they are asked for the info again. Eventually the deadline for
filing a charge back with the credit card passes and Paypal takes no
action. In some cases, Paypal posted a credit to the customer's
account that read 'Pending' but the credit never completed. So what is
the customer to do? Rely on Paypal and often get nowhere or do a
charge back and Paypal will then freeze the customer's account?
Now does this mean you shouldn't use PayPal? No, unfortunately PayPal
is the largest and best-known payment service. A large number of
buyers are set up to use the service and you will loose some business
if you do not accept payment through them. You can use multiple
payment services (I.e., BidPay, AuctionPay, etc) and try to push
customers to them. I find listing other services first and larger in
my request payment invoices useful as well as providing a small
warning about online purchases right next to the Paypal link helps.
If you do use Paypal to handle your payments, the following tips will
help you stay safer:
Every payment method carries risk. It is the seller's choice to
minimize risk. An easy solution would be to simply state, "money
orders only." However, this would greatly reduce the number of bids
that seller would get. After Paypal's wildly successful viral
marketing and their lies about buyer protection, many buyers have been
trained to look for auctions in which Paypal is accepted. So sellers
have to find a method by which they can both accept Paypal and remain
safe. So I do accept PP and state so in my auctions. However, I also
state that I don't recommend it and don't consider it safe. I
therefore add some conditions, which you will see below. I also put in
a link to my Paypal page so buyers can see the concerns. But there is
always someone who insists on Paypal and rather than lose a customer,
I will do my best to accommodate.
The two biggest concerns with Paypal payments are that the credit card
is not being used by the rightful cardholder or that the cardholder
will do an unwarranted charge back. Despite Paypal's promises, their
own rep has already stated repeatedly that there is no protection
against charge backs if the buyer goes directly to his credit card
company and bypasses Paypal. So I recommend that you do not accept
credit card payments. Open a free personal account and accept only
bank account payments or transfers from existing PayPal funds.
As for payments from existing PP balances or bank accounts, these are
not perfectly safe either. The only rule at Paypal is that there are
no rules. It all depends on which so-called "customer service" person
handles the complaint and what that person chooses to do. It seems
that some of them are "buyer friendly" and will immediately freeze
funds in the seller's account based on an unsubstantiated buyer
complaint. It doesn't make a difference if it is only 2 days since the
auction or if the seller has over 500 positives and no negatives. If
there is no money in the seller's account, PayPal will put a freeze
for that amount into the account so that the next payment that comes
in will be frozen. So what should a seller do to be safe?
Do not automatically accept Paypal. Make your Paypal ID different than
your Ebay id. Customers will not be able to pay you until you tell
them which ID to use. Occasionally you might want to change the email
id and delete the old one. There are a lot of reasons why you would
not want Paypal payments sent to you until you have had a chance to
discuss this with the payer. Many customers will send you Paypal
payments without waiting for your instructions. Some will pay you by
credit card even if you don't accept this method. Others will leave
out the shipping and then when you remind them, will either ignore you
and then complain to Paypal that you didn't ship or send you a
separate payment on which you now have to pay an additional fee.
Others might accidentally send two payments and you don't get the fee
back when you refund.
Do not rely on the email that says you have money. Sometimes, due to a
typo in your email ID, you get the email but not the funds. Sometimes
the email is fraudulent. Always go into your account and withdraw the
funds immediately. Leave nothing in your PP account that you can't
afford to lose.
Make sure that you follow Paypal's protection rules. Only ship with
some form of delivery confirmation. Remember that there is no
protection offered outside the U.S.
In the event of a dispute, stop accepting PayPal until the dispute is
resolved. If someone pays you without asking and the funds get frozen,
tell your customer that PayPal is holding the money and they should
ask PayPal for a refund since you are unable to do so. Some folks have
suggested having a special bank account just for Paypal, so if PP does
try to access it, there will be nothing for them to take. I also
thought this was a good idea (and it still is) but it is not a
guarantee that you will escape unscathed. I recently closed my
business account and opened another one at a different bank. By
accident, a vendor charged an electronic payment to my old account. To
my surprise, the bank simply re-opened the account, paid the vendor
and then sent me a bill with charges. When I called to question this,
they told me that an account is not closed until 45 days of inactivity
passes. When I allowed electronic transfers to be made, I was agreeing
to this. If your bank has such a policy, Paypal can try to access your
bank account even after you close it. Of course you and file an
affidavit of fraud against PP and the bank is supposed to retrieve
your funds.
What should you do in case you get a payment and the customer asks you
to ship to Indonesia, Romania or some other country where there is a
high rate of fraud? Do NOT return it and do NOT ship the goods.
Contact PP immediately and let them remove it from your account.
What should you do if you are the victim of a false charge back or
fraudulent payment? According to Paypal, the process should work as
follows: Buyer is supposed to wait 30 days to make the claim. PP
contacts you that a claim has been made. Your provide PP with proof of
delivery. PP is then supposed to protect you. Sellers have emailed me
that charge backs were made without the customer or PP ever contacting
them, or even after they sent PP proof of delivery. If the charge back
is a small amount, you might chalk it up to the cost of doing
business. If it is substantial, you will have to do the following:
- Follow Paypal steps and provide the proof they ask for
- Post a complaint on auctionbytes, auctionwatch and otwa
- Email Damon@paypal.com
- Complain to the BBB of California (where PayPal operates from)
- Complain the FBI fraud, attorney general of California, newspapers
and whomever else you can contact
What should you do if the worst happens: your account is restricted
over a large charge back or reversed payment that you fought and you
will no longer be using Paypal? First, you must immediately inform any
customers not to send you payment through Paypal. You should also
contact Paypal and tell them to close your account. Tell them that you
have advised your customers that you will not be accepting payments
and anyone who sends money to your Paypal account must contact Paypal
to get it back. If Paypal does not return it to the senders, you are
advising them to charge it back.
Now with all that said and done, Do You Still Want To Use PayPal? If
so just go to their site (linked below), read the account agreement
"thoroughly" and sign up. You can start accepting credit card
payments right away.
https://www.paypal.com/us/mrb/pal=Q45HCF9VXE6Y8
<a href="https://www.paypal.com/us/mrb/pal=Q45HCF9VXE6Y8">www.PayPal.com</a>
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