Fees and more fees, that is the question!

[ricoinaz]

Why is it that PayPal can approve a payment and then when their fraud client says they did not make the purchase do we vendors have to pay a fee for PayPal's mistake or fraud customer? PayPal charged us .78 US for a reversal of only $19.95 US. That's 3.9% for what PayPal approved! This is insane! Credit card companies do not do this, but PayPal seems to get away with murder sometimes. There needs to be some regulation with PayPal to not only protect their users, but also protect us vendors. The person had to go through PayPal to make the purchase with us. PayPal approved the transfer and should take the blame if there is fraud. Later this guy comes back and says he never made the purchase. Let's assume this guy didn't make the purchase and PayPal's lack of security allowed this criminal to make the purchase. OK, so PayPal refunds the user his $19.95 from US and the deal is done. But instead PayPal charges us an extra .78 US because of PayPal's mistake. That's JUST WRONGE PayPal!

PayPal advertises how "safe" everything is using PayPal. Safe for who? I personally never use PayPal. A credit card is MUCH safer for my transactions. It's easier for me as a customer to dispute the charge and it's better for the vendor who is only out the purchase amount. Now that PayPal charges you for fraudulent transactions initiated from their own server, it just doesn't make sense. PayPal likes to tell us vendors that our sales will go up if we use PayPal. My experience over the past 2 years will not support that. All that has happened is that users who would have used a credit card simply used PayPal instead. If we didn't accept PayPal the person would have still purchased. We are now considering removing PayPal as a payment option.

[sandypurins]

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@ricoinaz wrote:

There needs to be some regulation with PayPal to not only protect their users, but also protect us vendors. The person had to go through PayPal to make the purchase with us. PayPal approved the transfer and should take the blame if there is fraud. Later this guy comes back and says he never made the purchase.

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That would be an Unauthorized Transaction situation.  PayPal's Seller Protection Policy covers Unauthorized Transaction claims.  Click on the following link to read the eligibility requirements...

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=ua/UserAgreement_full&...

[ricoinaz]

Only problem with this is you are ONLY protected under this if you have proof of delivery. Our products are delivered electronically so we have no protection what-so-ever. And as I said, I have no problem with the refund of payment, but I DO have a problem with fees collected by PayPal that's assoicated with this fraudulent transaction. It's not the product amount I'm concerned with, it's the fees PayPal charges to make the reversal. In this case it was PayPal that authorized the payment transaction so why should we have to pay a fee for their mistake?

[sandypurins]

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@ricoinaz wrote:

In this case it was PayPal that authorized the payment transaction so why should we have to pay a fee for their mistake?

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The seller protection rules are clearly stated in PayPal's Seller Protection Policy, and... you should now know that your "electronically delivered" items are not covered, and so...

you should weigh the benefits vs risks and decide whether accepting PayPal payments is ultimately profitable for your particular situation.

If a buyer's PayPal account is hijacked or if his credit card is stolen, PayPal cannot possibly know about this until the buyer reports the unauthorized use.

Do you know of any other payment service which provides seller protection for electronically delivered items?

[ricoinaz]

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@sandypurins wrote:

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Do you know of any other payment service which provides seller protection for electronically delivered items?

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Absolutely! If you read my post closely you will notice I am NOT complaining about the refund itself. I'm complaining about the fees PayPal charges to refund the money to the buyer. Our credit card merchant accounts do NOT charge fees for so called "fraudulent" or unauthorized refunds. They simply debit the original amount from our daily batch. And the buyer does NOT have to wait several days for his money to be returned either. The ONLY reason people use PayPal is because they believe PayPal is safer than other payment methods. But the truth is, PayPal is less safe than using your credit card and in our case, it's much cheaper for us to do business. The only reason we accept PayPal is because many people (our customers) are ignorant and have fallen for PayPal's gimmick that PayPal is safer. If they knew the real truth I don't think they would use PayPal. I certainly do not...