A few months ago my company received a large order for products that was obviously fraudulent. Not a mistake. I refused to provide a refund, knowing that the fraudster could reverse the payment, even after the refund was paid. Based on my limited knowledge of Paypal's rules, it appeared that Paypal could draft my account for the reverse payment even though the customer's money had been refunded. My recourse would have been 6 months of investigation. By then my money would be transferred to the fraudster's bank account. And the fake identity used for this customer's Paypal account, and my money, would be closed and gone.
I told this person to reverse the payment instead of providing a refund. At least then I couldn't lose money. Which they did, within the 60 day time limit.
I had a negative Paypal balance due to this activity. Has anyone else had this experience?
