Paypal Issues – Chargeback Case

I have been using Paypal for more than 3 years now and never had any issues before this one. I sold 3 digital products of $64.99 each to the same buyer and within a few days (on March 4, 2006), received an email from Paypal saying that the buyer had filed a chargeback against those transactions. I was asked to respond with proof that I had shipped goods.

Digital Goods Not Covered in Paypal’s Buyer Protection Policy

The products being digital, I had no tracking and shipping ID to provide and realized, to my dismay, that such products were not covered within Paypal’s Buyer Protection policy. I sent in copies of the emails of my correspondence with the buyer. I also mentioned that the fact that the buyer had re-ordered two more times indicated that he had received the products and had asked for more. But this was not proof enough.

Transaction Reversed

The transaction was reversed and those amounts were deducted from my account balance. However, Paypal’s support team was very helpful and fought the case on my behalf going by PayPal’s standard practice to dispute wrongful chargebacks. Apparently, someone had committed a credit card fraud and used somebody else’s card to purchase products from my site.

The Case ends finally

I had almost forgotten about the case when on the 26th of March i.e. after 22 days, I received an email from Paypal saying that they were charged a settlement fee which has been debited to my account (there goes some more money from my Paypal account).

The email was not clear about what was the outcome of the case but since they mentioned ‘settlement fee’, I take it that the case has been settled and not in my favor or else I should have seen my Paypal balance go up again.

Communicating with Paypal

I tried replying to their email about the settlement fee with my thoughts on how I felt about sending the purchased products and not receiving my money and paying some ‘fee’ out of my own pocket to top all that. But the mail came back as undeliverable.

So there you go – I sold some goods, did not receive any money for them, had to pay more money out my pocket for somebody else’s misdeeds.