Concerns about accepting Paypal for business services

[jmishur]

I'm looking to find out what kind of protection is available for my business if I let my customers pay via Paypal (either with a credit card or by any other method).

I'm currently accepting only personal checks or cashier's checks and NOT credit cards because I operate a tour business and I do not want people to be able to use some automated method to take back funds or "dispute a charge" without contacting me first. For example, if someone paid me for an entire tour package (hotel, meals, tickets, tours, etc.) but got upset that the hotel didn't give them enough pillows, I don't want them to be able to penalize me financially when the matter is something that should be taken up with the hotel directly.

So my question is this: if I accept PayPal as a form of payment and after funds are received and transfered OUT of my PayPal account and into my bank, can PayPal take those funds BACK from my bank account if a Payer opens a dispute or something of that nature?

Thank you.

Jeff Mishur

[snowshoe]

Bottom line answer is "Yes", PayPal will try your funding sources to retrieve the money.  Here's some things to keep in mind - regardless of "who" you use as your credit card processor - chargebacks are "always" a possibility. 

As for using PayPal - suggest that you read the User Agreement.  Since you are providing a "service", unfortunately there's no Seller Protection as you are assuming all risks.  A dispute can be opened easily and in many cases, PayPal favors the buyer or customer.  And even if PayPal does not get involved, it's possible that you would end up dealing with the buyer's credit card issuer.  When you get involved with a chargeback, not only is the money returned to the buyer, but you are charged an additional fee for processing.  PayPal's chargeback fee for US Accounts is $20 - some banks and card issuers charge even more.

User Agreement link:

https://www.paypal.com/us/webapps/mpp/ua/useragreement-full

[BonsaiJack]

IMO. Paypal is not a good idea for high value transactions. Its a safe way to be paid but not a safe way to be paid. You will probably be best served by using an official merchant account for your transactions over $20.

[jmishur]

Thank you, Bonsai Jack. I really appreciate your advice. I think I'll stick with checks or bank transfers. - Jeff