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Guarding against Chargeback fraud?

Discussion in 'Making Money' started by WickednDivine, Nov 21, 2008.

  1. WickednDivine

    WickednDivine Executive VIP Premium Member

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    Anyone who has sold digital products online (specifically through paypal), has probably experienced chargeback fraud.

    This is a serious problem for me, because I go ahead and pay my affiliate their earned commissions a month or so after the sale is made, and then 2 months down the road I get an "unauthorized transaction" dispute in paypal, of which I can do NOTHING as a seller. Not only do I lose the money I made from the original sale, but now i've lost another 50% that i paid to my affiliate.

    Paypal has NO way to guard against this kind of fraud. The seller almost always looses the case.

    One thing I've noticed is that paypal offers "seller protection", but NOT for digital goods. It has to be a physical product.

    So, what do you guys think of sending some kind of "certificate" via certified mail (with tracking, etc) with every product sale? I could then use this tracking information in the chargeback dispute, and claim that it as a physical product, allowing me to qualify for seller protection.

    Any thoughts?

    -Eric
     
  2. justthinking

    justthinking BANNED BANNED

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    Why not just allow the buyer to download the file, along with sending it on a CD. It would definitely solve your problem. And CD's are really cheap.
     
  3. WickednDivine

    WickednDivine Executive VIP Premium Member

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    Yeah, that's also something I was thinking. Thanks
     
  4. magcshroom

    magcshroom Regular Member

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    Your idea is correct. Send them a postal envelope(regular mail) for like 2 bucks, not even, and just put a piece of paper with the download site or something. Make sure you get tracking, and if they dispute, you win. They must have a confirmed address though. I've done this when i sold WoW Timecards.
     
  5. jazz99

    jazz99 Regular Member

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    If you have a PayPal business or Merchant account you can now send to unconfirmed addresses and still get protection. To make sure you are always protected against chargebacks. your best bet is to ship it using the built in PayPal shipping. Then added signature confirmation for $1.80 (delivery confirmation is automatically added for free) and then ship. With delivery and signature confirmation you have the protection you need.

    Using PayPal shipping allows you to keep track of all your shipping easily and build the history in the PayPal. You can download it monthly or whenever you want for your own records.

    I have been saved this way twice against chargebacks in the past 2 months and have gotten my money back in both cases.
     
    • Thanks Thanks x 2
  6. dsservices

    dsservices Newbie

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    Brilliant Jazz99. Priceless info. Thanks for that. I'll be doing that from now on.
     
  7. Therookie

    Therookie BANNED BANNED

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    How do protect against a service?
    How do you do the Paypal deposit thing?
     
  8. lewi

    lewi Jr. VIP Jr. VIP Premium Member

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    instead of all this postal crap why dont you hold the commission for 2 months

    or (this prob wouldnt work as well) make it so their accounts go into the - if they get refunds occuring....
     
  9. WickednDivine

    WickednDivine Executive VIP Premium Member

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    Would you want o be part of an Affiliate program that held commission for 2 months? I wouldn't. Besides, there doesn't seem to be any set time limit on how long you can initiate a chargeback. 2 months was just a number I made up
     
  10. jazz99

    jazz99 Regular Member

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    I forgot to mention that with the 2 chargebacks I got my money back on, it was paid by PayPal under the seller protection plan because I am sure PayPal lost out on the chargeback fight itself from the credit card company.

    I does take some time. Mine averaged about 3 weeks each.
     
  11. lewi

    lewi Jr. VIP Jr. VIP Premium Member

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    Why dont you go through a company?? clickbank or paydotcom (cant remember second one sorry)....

    then they deal with chargebacks etc and also paying :) less flexible with money for you and affilliates but will stop alot of fraud.... hey i could make a few grand doing paypal fraud if i was an affiliate with you....
     
  12. razzak

    razzak BANNED BANNED

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    Thanks for the tips Jazz99, I've already got 2 chargebacks on 2 weeks periody..
    It sucks being stolen like that.