Payment reversal

[Thorzy]

I recently sold virtual goods to someone($120 worth), and now they are claiming an unauthorized payment on their paypal. In the resolution center, there is no way to explain the situation of virtual goods, so what should I do?

The resolution center NEEDS a response from me in order to dispute their reversal, correct?

Note: I already explained my situation in an email to paypal, is that enough?

Also, on the transaction, I made sure the buyer left a note saying "for virtual goods", will that help my case?

Advice please, thanks.

[NEMACK]

Thorzy,

I used to be an agent for Paypal. I know alot about the ins and outs of Paypal. Virtual items are not covered under Paypals buyer protection plan, however, there is a work around. If you ever sell something that is virtual send the key, password, or whatever is transferred to gain access to the virtual device in the mail (with tracking number). That way you are covered because you sent something tangible in the mail.

[Thorzy]

So is there nothing I can do? I'm out $120?

[PayPal_Frank]

Hi Thorzy,

I'm very sorry to hear about this situation. 😞 Virtual goods definitely do have a higher risk for these situations as the order is being fulfilled virtually and it's very difficult to prove that the actual owner of a PayPal account received digital goods.  It could be a situation where someone used a PayPal account without the account holder's permission and they may have also had access to the account holder's email address.  These types of reversals are possible with any type of electronic payment processing.

PayPal does have processes in place to help us determine if a payment really was authorized or unauthorized.  If we find evidence that supports the payment was authorized, the dispute would be denied.

Even if you choose to send a portion of a transaction physically in the mail or send a physical item that allows access to the digital content, it would still not be covered under PayPal Seller or Buyer protection as the item being purchased is virtual and some portion of that order is being delivered electronically.

We have more information about the risks of selling digital goods in our Digital Goods Fraud Prevention Guide.

If the payment ends up being reversed, you may want to report that to local law enforcement or www.ic3.gov.

I hope this information helps to avoid these situations in the future.

- Frank