Can paypal invoicing protect you when selling virtual goods?

[GodThor]

I'm facing a very difficult problem right now that has ruined my confidence.

1. Goods and services disputes are a 100% loss for me since I sell virtual goods

2. Friends and family protects from disputes but can lead to a permaban and I don't want to lose my paypal, it's still vulnerable to chargebacks

3. My customers rarely use anything besides paypal so wise or crypto is not an option, it will cause me to lose tons of customers

4. I can't build a site right now for paypal because I have other priorities but still it's not guaranteed protection from disputes or chargebacks

5. A well-timed dispute or chargeback can destroy me because my margins are small and let's say this happens on a large order, this could be the end of me

I was kinda ok with paypal until I learned that some of my competitors were permabanned there for using friends and family and now I want to stop this practice before it's too late. Stripe is not an option because I'm in a high-risk industry and also I dropship so I have to pay instantly the supplier. Basically, my only option right now is to force wise or crypto to my customers and accept the loss. An alternative option would be to sell on platforms that offer protection, most likely marketplaces similar to ebay but the fees are too high in my industry and this will ruin my dropship business, I will have to become a supplier myself in order to survive.

My last hope for protection is paypal invoicing through terms and conditions, some of my competitors say that this doesn't work for virtual goods, however I want to hear it from members of this site as well. Can terms and conditions save you from a dispute or even a chargeback? If I'd state in my invoice that I don't refund, will that be enough? what if I force the customer to write a message where he states that he received the item? do these things work at all?

 

[rapidseedbox]

Paypal is hard to deal with, but they don't really forbid dropshipping. They even have blogs about it.
But you need to be TRANSPARENT as much as possible, with both paypal and customer, to provide them both with tracking ID and all that.
If you can't prove that the item is really on its way, your career is done.

Regarding TOS, its risky. You are in a dropshipping business and not giving a refund is a red flag. Also even if you won, you would still get frozen money and account and all that because of disputes.
So only way is to try to minimize number of disputes as much as possible. Paypal hates disputes.

 

[Chris Newman]

Unfortunately as it stands now, many sellers of non-physical / digital products are getting their Paypal accounts suspended (banned). Because of this, 2022 will see more and more sellers moving towards accepting crypto and more & more buyers also starting to use crypto. Nowadays, accept Paypal only if you are selling a physical product which is physically shipped with a trackable proof of shipment, otherwise if you accept Paypal, then your business will turn into a charity (chargebacks, disputes) and soon Paypal account suspended.

 

[MikeTO2]

Paypal always protect buyers not seller so even you sell physical products, you may still get chargeback/ disputes and lose the case

 

[PHPInjected]

There’s not a whole lot you can do. I would start by focusing on moving every single transaction you’re able to over to another payment processor.

Unless you’re doing large business, don’t use Payoneer either. If you have 5-10+ clients or people paying you, it’s good for that.

PayPal is hell because they’re the most widely used processor among online transaction communities however the bad side is you can lose that money to chargebacks and even PayPal themselves for 6 months.

 

[rap8557]

Anything that is virtual right now is automatic permanently limited to paypal, i tried every trick and even the legal once still got my paypal account limited. Try using CC instead.

 

[MKSKS]

Nope PayPal invoicing doesn't ensure protection for virtual goods or services.

 

[theeyeinside]

Your only choice is a credit card. At least when they chargeback scam you, you can answer the chargeback with documentation.

For a WooCommerce cart, use the First Data Payeezy system. The rates are good and the plugin is at the GPLDL share site

Sincerely,

The Eye

 

[GodThor]

Your only choice is a credit card. At least when they chargeback scam you, you can answer the chargeback with documentation.

For a WooCommerce cart, use the First Data Payeezy system. The rates are good and the plugin is at the GPLDL share site

Sincerely,

The Eye

Do you mean a service such as stripe?

 

[CPANathan]

Grrrrr PayPal don't protect virtual goods whatsoever. Source: ROBLOX.

 

[Captain_Nothing]

First off, NEVER abuse Friends and Family payment, you are basically asking to get banned if you abuse this feature.

5. A well-timed dispute or chargeback can destroy me because my margins are small and let's say this happens on a large order, this could be the end of me

I am not sure what you are selling but if a single large order dispute can destory you then you are doing something wrong.

 

[Brodongrop]

Invoice would do nothing , payalpal end is near because buyers are switching to BTC and many types of wire transfers , to get paid !

 

[GodThor]

First off, NEVER abuse Friends and Family payment, you are basically asking to get banned if you abuse this feature.



I am not sure what you are selling but if a single large order dispute can destory you then you are doing something wrong.

Huh?

My margins are low at the 30-15% range and I'm selling items from 15$ all the way up to 300$. Each customer is living me about 7-20$ per order, rarely more than this. Now let's assume that 40 customers are leaving me about 400$
profit and I get chargebacked on a large payment at the 300$+ range, I just lost all of my profit that 40 customers left me and it could happen again and again, it could even bring me to negative balance. I can't possibly deny such payments because they could be legit so I lose money. Scamming like this is not so rare on the industry I'm in (rmt).

Edit: I lose the profit because I have to send the money to my suppliers to deliver the goods. I would still lose it if I delivered the goods myself.