The life of an indie seller is no rose bed, we all know that.
Lots of work, lots of taxes, and some difficult customers are things that we deal daily with; they are the price we pay for being outside the corporate world, doing the work we love.
But there are other things that we have not taken into account, but happen to us, nevertheless. I’m talking about the phenomenon of the chargeback’s.
You know, somebody buys from you, pays promptly, you send the package, and sometimes even receive feedback and than weeks or months later, PayPal takes back the money with a cryptical message about ‘unauthorized transaction’. This can happen up till six months after the transaction.
What the f*** is this? I’ll tell you: it more often than not it concerns buyers with lots of feedback, in fact ‘buy crazy’ buyers that are finally so overextended on their credit cards that the only way out that they see is to tell their banks that their credit card or credit card info has been stolen, and so have the charges reversed through PayPal. Never mind that you have proof of shipping, that you sent to a confirmed address, that the buyer is an Etsy user of long, that she even gave you feedback before she thought the stratagem. Typically, this buyer keeps her silence and no communication is possible.
If you email PayPal about it, you receive a standard answer telling you that they do that to ‘keep you safe’ (???) and thanks you for using PayPal. Etsy usually discontinues the buyers account but can not do anything else.
What can be done?
In fact all the information that you need is somewhere there buried in the tons of small print of PayPal’s User Agreement.
First, you have to contact PayPal in writing. Weird enough, PayPal settles in Singapore and this is the address:
Attn: Legal Department
89 Neil Road, #03-01
You just tell them your story and include all that you can think that can be of use. If you have proof of shipping that is traceable on line, make a screen shot asap, this info is only traceable on line for three months. Also copies of feedback or emails with the buyer are helpful.
Most probably PayPal will again refuse your petition. Also if you don’t get an answer in four weeks you can proceed like if it was, in fact, denied. It seems a waste of time, but you have to go through the motions.
And when you have your petition denied, than you have to write again your story to two different controlling entities, the English Ombudsman and the Commission de Surveillance in Luxemburg.
The addresses are:
Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR
Commission de Surveillance du Secteur Financier
110, route d’Arlon
This last one you can write in English as well.
And you will see, it works miracles. It happened to us in two different occasions and both times we got our money back. It may seem a lot of hassle when the amount involved is not large, and it is a lot of hassle, but every year it happens to thousands of sellers and the total amount is staggering.
Here is a copy of the letter we sent to both entities after PayPal had reimbursed us the second time. We have won two battles, but we (we all) still have to win the war. PayPal should not be able to realize those charge back’s.
Dear sir, madam,
Referring to your letter dated 15 march 2010, I can tell you now that PayPal has credited me (again) for the disputed amount .
It is thus not for my own interest only that I write you this letter, but to ask once more your attention for the issue of the chargeback’s. You refer to the PayPal Users Agreement; I’m sure that nobody ever agrees to be treated without fair play.
In my case –and many others- is obvious to anyone that cares to look into it, that the buyer is committing fraud, but even is it wasn’t that way, even in the case that somebody abused the buyers credit card, in the long chain of entities involved, the bank, the credit card issuer, the insurance company, PayPal and finally the seller, why is the weakest link in the chain, the seller, the one that has to carry the risk?
The seller has no possibility of verifying the identity of the buyer or the person that has access to the buyers logging information. The task of verifying the safety of the transaction lays with PayPal, the ‘safest way of sending and receiving money’. PayPal knows that very well and carries the risk of the chargebacks when eBay is the venue involved, but not for Etsy sellers or others. This is also why PayPal has issued me in two occasions a ‘courtesy credit’ , and not out the goodness of its corporate heart.
I would very much like you to look in the matter and try to make an end to this unfair course of things. You have my authorization to contact the bank with my correspondence and any other entity that may be needed. It is a very transparent kind of fraud that should not be allowed to continue but happens to all sellers at any time.
If changing the terms and conditions in which PayPal operates lays outside your power, please do send forward this letter or refer me to the relevant authority, so that the legislation may change to protect all bona fide sellers and not only those assertive enough to make work of it.
If it happens to you, take the trouble to act upon it. It cost time and a couple of stamps, but nothing else. In a brick and mortar shop, theft occurs, but when the theft is ‘corporate’, it is extra sour, I think.
Feel free to copy and divulge any part of this post (the most boring post ever, I know). Together we can change this course of things.
May the force be with you :)