Paypal : Refunds vs Disputes

Hi,
I'd like to sell an ebook and use paypal links to get paid but this kind of product is usually likely to get people wanting there money back if they don't like the book.

I am aware paypal can close your account if you get too many disputes from people who want their money back. So I was wondering instead if it wouldn't be better to just make it clear on the sales page, that I can issue a refund if asked by email. Then I would just have to go to my paypal and refund the person.

But...
Will the same problem arise with paypal if I do too many refunds?
Even if a refund doesn't count as a dispute, it will probably pose the same risk at the end if there are too many, aka account closed.
Any experience with this guys? Thanks

That's thin ice.

BassTrackerBoats said:

That's thin ice.

Click to expand...

That's what I thought
I chatted with chatgpt on this subject, it said 1-2% is the max for disputes, and 10-15% for refunds. It said paypal calculate this ratio over a period of 3-6 months.

That's crazy honestly, for disputes if you get only 2 out of 100 sales over 6 months, then it's already too much ! wow... I thought it was nothing to be stressed about.

Also I asked chatgpt why is this, it said it's because buyers usually tell paypal they didn't receive the digital product.
But what if I set up a paypal button sending to a clear thankyou page showing the ebook in plain html, then they shouldn't be able to tell they didn't receive it?
Chatgpt told me paypal don't see the thankyou page url even if it is setup in the paypal button. I have a hard time believing this.

Chatgpt wrote a php script that makes transactions dispute-proof. Basically it uses the IPN paypal system that can email the buyer the link to your thank you page, so they can't claim they never received the book, so you theoretically win every dispute. Clever.

---

Perfect! I’ll give you a simple, ready-to-use PHP IPN script that:

1. Listens for PayPal payments.
2. Verifies the payment.
3. Sends an email to the buyer with your ebook download link.
4. Logs every transaction for dispute proof.

Here’s a clean example:

< the php code > (removed for clarity)

---

How it works​

1. You set your PayPal buttonto notify this script (IPN URL).
   • In PayPal button settings → “Advanced” → “IPN URL” → put your script URL.
2. Every time someone pays, PayPal sends the data to your script.
3. Script verifies the payment with PayPal (important!) and then emails the buyer with your ebook link.
4. All transactions are logged in ipn_log.txt (great for disputes).

It doesn't matter what you will write on your page/website. PayPal users open disputes in PayPal because it is reliable and convenient.

In fact, I have seen many cases where the dispute rate was 25% or more. And those accounts continued to operate. I can say with confidence that if your account is closed, the dispute rate will not be the reason. There will be other, perhaps less important and less obvious reasons.

P/S No, you can't win every dispute

sbshd042 said:

It doesn't matter what you will write on your page/website. PayPal users open disputes in PayPal because it is reliable and convenient.

In fact, I have seen many cases where the dispute rate was 25% or more. And those accounts continued to operate. I can say with confidence that if your account is closed, the dispute rate will not be the reason. There will be other, perhaps less important and less obvious reasons.

P/S No, you can't win every dispute

Click to expand...

That's good to know. 1-2% seemed very low, that's cool if this is a much bigger number.
Well for my case particularly I can't see why my account could be closed apart from a high rate of disputes, it's an old legit business account. But who knows, I'll try to put as much details as possible on the sales page.

"It doesn't matter what you will write on your page/website. PayPal users open disputes in PayPal because it is reliable and convenient."
I know it doesn't matter, but at least you have bigger chance of wining a dispute if paypal themselves sent the email with the thankyou link.

Do you think it's judicious to write somthing like "30-day refund guarantee, just ask by email" next to the buy button? I think it's a good strategy to avoid dispute but the pbl at the same time it's a big door open to many refunds...

Refunds are not as risky as disputes. Just have a clear refund policy and tell buyers to email you first. That’s the safest setup.

Disputes matter way more than refunds, but too many refunds still looks risky.

Honestly best to get an alternative for PayPal

M4DM4X said:

Hi,
I'd like to sell an ebook and use paypal links to get paid but this kind of product is usually likely to get people wanting there money back if they don't like the book.

I am aware paypal can close your account if you get too many disputes from people who want their money back. So I was wondering instead if it wouldn't be better to just make it clear on the sales page, that I can issue a refund if asked by email. Then I would just have to go to my paypal and refund the person.

But...
Will the same problem arise with paypal if I do too many refunds?
Even if a refund doesn't count as a dispute, it will probably pose the same risk at the end if there are too many, aka account closed.
Any experience with this guys? Thanks

Click to expand...

Add other payments method
Because, PayPal alone can't do this without issues,
Most people like to get stuff for free
Meaning they can get the book and get the money back if this is explicitly stated on the buying page

M4DM4X said:

Hi,
I'd like to sell an ebook and use paypal links to get paid but this kind of product is usually likely to get people wanting there money back if they don't like the book.

I am aware paypal can close your account if you get too many disputes from people who want their money back. So I was wondering instead if it wouldn't be better to just make it clear on the sales page, that I can issue a refund if asked by email. Then I would just have to go to my paypal and refund the person.

But...
Will the same problem arise with paypal if I do too many refunds?
Even if a refund doesn't count as a dispute, it will probably pose the same risk at the end if there are too many, aka account closed.
Any experience with this guys? Thanks

Click to expand...

If you are sure that there will be many refunds, try an alternative to PayPal.

Fourthlevel said:

Honestly best to get an alternative for PayPal

Click to expand...

medialounge said:

Add other payments method
Because, PayPal alone can't do this without issues,
Most people like to get stuff for free
Meaning they can get the book and get the money back if this is explicitly stated on the buying page

Click to expand...

Gosprebo said:

If you are sure that there will be many refunds, try an alternative to PayPal.

Click to expand...

I don't think there would be many refunds, the ebook is good, but who knows. It's my first time selling a book and I do know people can profit from anything to get stuff for free so I guess I will have to do refunds anyways.
Apart from paypal there is stripe but it's the same problem.
Cryptos is the way to go but my audience is not the kind that use cryptos at all.
Let's hope my long life ass paypal account be immune to any problem

The only safe solution I found is using an intermediary like Gumroad or Lemon Squeezy, they collect the money and handle disputes. But if you want to see your money you have to submit to their KYC, on top of their commissions.

It’s better to handle refunds directly, but a high refund rate can still cause PayPal issues over time.

I have taken my refund from cloudflare through paypal ask refund (cloudflare denied to give refund before)

Refund should act like payment processed.

From my experience, PayPal is extremely buyer friendly, sometimes to the point of being dangerous for sellers.


A lot of buyers already understand that if they buy something and ask for a refund, PayPal usually gives the money back with very few questions. The seller is the one who takes the hit. With digital products this gets even worse, because many people don’t ask for a refund because they disliked the product, they ask simply because they know they can get the money back and still keep the file.


The real issue is not only disputes. Even if you manually refund people and avoid chargebacks, a high refund rate can still flag your account. Once PayPal starts seeing too many refunds or complaints, they can limit your account, hold funds, or even shut it down completely. I’ve personally had very bad experiences with this and it can happen fast.


Making it clear on the sales page that refunds are handled by email helps a little, but it does not protect you from buyer behavior or PayPal’s internal risk systems.


If you plan to sell digital products long term, I would strongly recommend either limiting PayPal exposure, keeping refund rates as low as possible, or diversifying payment processors. PayPal works fine until one day it doesn’t, and when that happens it’s usually painful.


Just sharing real world experience.

Davidwolf said:

If you plan to sell digital products long term, I would strongly recommend either limiting PayPal exposure, keeping refund rates as low as possible, or diversifying payment processors. PayPal works fine until one day it doesn’t, and when that happens it’s usually painful.

Click to expand...

Thanks mate.
Problem is there is no other safe alternative solution. As soon as a payment is involved, any processor will act the same with disputes/refunds.
Refunds by email is the best route we have as sellers, to handle disputes almost safely.

M4DM4X said:

Hi,
I'd like to sell an ebook and use paypal links to get paid but this kind of product is usually likely to get people wanting there money back if they don't like the book.

I am aware paypal can close your account if you get too many disputes from people who want their money back. So I was wondering instead if it wouldn't be better to just make it clear on the sales page, that I can issue a refund if asked by email. Then I would just have to go to my paypal and refund the person.

But...
Will the same problem arise with paypal if I do too many refunds?
Even if a refund doesn't count as a dispute, it will probably pose the same risk at the end if there are too many, aka account closed.
Any experience with this guys? Thanks

Click to expand...

Yes, I've worked in card processing and I established the chargeback defense SOPs.

Now you, like most people here, provide very thin information about your product, so technically, not worth replying to, but since you have put a little bit of thought in this...I will reply, the forum needs a little bit more real content.

First , I don't know if you are potentially claiming bs in your e books without a disclaimer, like for example we help you get back your ex or some bs like that. Google will deactivate such campaigns, this is why all these clowns on YouTube with financial products say this is not financial advise and then they go on and do a 30min video on financial advise and then delete them if it comes home to bite them in their lying arsed.

So, no idea wth is in your e book , if its bs promises with no disclaimer, paypal and any one processor that's not doing card mis coding will van you. There is a large list on chargeback dispute codes , usually not delivered, not delivered as promised, you do the math.

You have grounds for a chargeback defense if you have kyc, an order and your claims can be backed up, that's it, end of story.

Paypal and card processors didn't make their product for you, where you surf by and hope to issue refunds before the shit hits the ventilation.

Refund procedures as in "JIT" are not tolerated by paypal and such.

This is precisely how it goes, you know how I know? I did the corporate onboarding and paperwork from both sides, too. The first questions are volume, avg tx size, chargeback percentage and refund percentage.

I know there will not be a thank you or anything because you are most likely just looking for a way around your bs product sales threat model and you will be back soon, oaypal and stripe banned my accounts soon. And you'll be on MATCH.

Have a very wonderfull day, hope this helps and yes , if a poster doesn't clearly state what they're selling, if they're vague, it's always always some dodgy bs. If you're one of the 1 percent with a legit product, I won't apologise either, as you don't walk into risk assessment meetings with banks and then drop "I am selling e books" with no further clarifications, they will laugh you out of the room.

So yeah, all the replies here are bs cept the basstracker moderator fella , who summarised in 2 words, he seems to know but can't be bothered to reply extensively.

So whatever reply there was before mine or will come after mine, this is the one that tells you how it works.

No freaking merchant has a refunds here button on their interface.

M4DM4X said:

That's what I thought
I chatted with chatgpt on this subject, it said 1-2% is the max for disputes, and 10-15% for refunds. It said paypal calculate this ratio over a period of 3-6 months.

That's crazy honestly, for disputes if you get only 2 out of 100 sales over 6 months, then it's already too much ! wow... I thought it was nothing to be stressed about.

Also I asked chatgpt why is this, it said it's because buyers usually tell paypal they didn't receive the digital product.
But what if I set up a paypal button sending to a clear thankyou page showing the ebook in plain html, then they shouldn't be able to tell they didn't receive it?
Chatgpt told me paypal don't see the thankyou page url even if it is setup in the paypal button. I have a hard time believing this.

Click to expand...

Chatgtp is not a good fkn source on this, 1% chb rate will have you nuked, guaranteed. And it's not 3 to 6 months, it's 180 days time for something called rolling reserve.

Don't ask chatgtp such questions, how does it occur to you to ask chatgtp such things instead of....paypal , for example?

theusualkeysersoze said:

Chatgtp is not a good fkn source on this, 1% chb rate will have you nuked, guaranteed. And it's not 3 to 6 months, it's 180 days time for something called rolling reserve.

Don't ask chatgtp such questions, how does it occur to you to ask chatgtp such things instead of....paypal , for example?

Click to expand...

Relax mate, no need to be harsh.

My ebook is legit though, and for obvious reason I don't want to detail what it's about.
It's not the point though since:
1/ Paypal won't look into the ebook 150 pages to verify if it's legit or not, to make a decision.
2/ Even if you have a top notch product, you'll always get disputes, even more if your target is gen Z.

Chatgpt told me all you said, I know it's not reliable. Even your post is not reliable either since it's just *your* experience. Since I asked for experiences here, I still take it into account of course and I thank you for this, very much appreciated for sharing. But there are people who get along with >1% dispute rate without any pbl. So maybe paypal algo is not only relying on dispute rates or refunds as you seem to say.

What I'm wondering though is, what are the reasons paypal would refund someone buying an ebook. The only one legit reason I see is if the person didn't receive it.
Since paypal won't look into the ebook details (it's a method to improve a certain part of your body, which is not the ding dong) I highly doubt they will read the entire book to make a judgement. And still, it would be very subjective, since all methods work for some and not for others, depending on many factors including the work the person puts in it.

So my conclusion is, to avoid disputes, we have to make sure we have a way to prove we do deliver the ebook.
And what chatgpt suggested in this regards is quite smart.
Cheers