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Paypal situation - E-Commerce site - Advice needed!

Discussion in 'Business & Tax Advice' started by Scorpion Ghost, Apr 30, 2015.

  1. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Here's the deal. I have a personal Paypal account, completely legit, in my name and all. It's 2 years old.

    I'm staring a Fiverr clone (I know, I know), and Paypal is how I'll be receiving my money.

    Now, the theme I'll be using - There is also the possibility to use escrow through PayPal adaptive for even more secure payments.

    What worries me is chargebacks, and fees.

    Say someone buys a gig, I get $1 and the seller gets $4, and then the buyer does a chargeback, I send him the money back.

    But, if I lost, say, 3.90% + $0.30 on receiving that money, then I'll be basically losing money at this point.

    How exactly does the escrow/paypal adaptive thing work? I'll have to upgrade my account to Business or Premium I take it?

    Could anyone shed some light on this, please?
     
    Last edited: Apr 30, 2015
  2. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Come on guys, every third person on here probably owns a clone or has owned a clone, tell me how is the paypal receiving money thing taken care of?

    I Really need to figure this out.
     
  3. Scorpion Ghost

    Scorpion Ghost Senior Member

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    100 views, no replies? Come on Fiverr-clone owners...

    Don't be greedy, share with the needy... haha
     
  4. cryptons

    cryptons Supreme Member

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    I dont have much knowledge but you should upgrade your paypal first!
     
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  5. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Yeah, I should probably upgrade to a Premier account.

    But from what I read that doesn't really change anything as far as Paypal fees and refunds go.

    I need someone who owns a Fiverr type site, or who knows about how it works, to explain the situation to me.

    I can't believe that, say Fiverr... you make a $5 sale on Fiverr, and they receive the money and lose 50 cents to Paypal fees.
    Now they have $4.50 left...
    Buyer cancels order, gets refund, they send back $5...

    And in this scenario they lose 50 cents.

    I am fairly certain that this is not how it functions, because if it did I don't think there would be a Fiverr...

    And you can say that Fiverr is a big site and maybe has a special agreement with Paypal. Okay, could easily be true. But what about all the other clones, how do they handle their receiving money/refunds/fees situation?

    Hopefully someone helps, because I'm out of ideas of where to ask and what to google for to find an answer...
     
  6. Lermontov

    Lermontov Registered Member

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    PayPal adaptive is different. There is simple, Parallel and chained payments. You are only liable when you set it up to show that the funds go directly to your account, if you set it up to show on the order page to show that the money goes to you and the seller (Parallel payment), then the seller is the one liable is such circumstance. Check the paypal adaptive page for details.
     
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  7. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Thanks. I did. Here's the link to it: https://developer.paypal.com/docs/classic/products/adaptive-payments/

    But it still doesn't solve my problem. I'd rather the money go to me, and I'll pay people as they reach the minimum cashout amount, as usual with all sites.

    But I suspect there must be some sort of escrow or some sort of magic (lol) where you don't have to pay fees per transaction for example, and you get charged eventually upon withdrawal to your debit card/bank or something... or, escrow where your money goes to a sort of limbo between your site and your paypal account, and then the countdown begins; if the sell is finalized successfully the money then proceeds to your account, otherwise the money is returned to the buyer with no fees or problems incurred for anyone involved.

    Because I imagine these Micro gig sites deal with refunds/cancellations all the time, and I doubt that they have to "deal" with them on an individual basis. Like Fiverr, buyer buys, cancels, and only if the seller rejects the cancellation is manual intervention required by support...
     
  8. Gogol

    Gogol Jr. VIP Jr. VIP

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    I am not into this business but I guess you are missing something here. This is why people don't pay you per sale. Your system should release payment on lets say, every 15 days. Within that time, you will be able to deal with the refunds. Ask for more time if not?
     
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    Last edited: Apr 30, 2015
  9. soulcollector

    soulcollector Senior Member

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    Why not try to use Amazon Payments to get money from your new venture?
     
  10. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Well, people have to pay per sale. If someone's selling something for $5, and someone buys it, that's just the way it is. And that money has to go somewhere.

    And it doesn't have anything to do with time, because the moment I receive the money I would lose a little something to Paypal fees. And then if there's a refund request, I would have to send the original amount back, effectively losing money on every gig cancelled.
     
  11. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Because people are familiar with such sites, and Paypal is an absolute must.

    Eventually I'll probably also have Alertpay and Moneybookers, and also even bitcoin and credit/debit card, but I first need to figure this out and implement paypal properly.

    I'm missing something here, and a Fiverr-clone owner could clear up my confusion in one comment...

    I've decided to do this, no matter what happens, 18 hours a day, whatever it takes, but this is the last thing I need to figure out, because if I can't, it's over before it even began...
     
  12. nikchaing

    nikchaing Jr. VIP Jr. VIP UnGagged Attendee

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    If you refund the payment, PP automatically returns the fee that they took. When you issue a refund in PP, it will display how much you are actually refunding from your account, and how much PP is returning from the fee.
     
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  13. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Oh baby, you don't say! Beautiful! Thank you!

    Okay, that makes life better right about now...

    So then, what happens though when you often have to refund payments? I don't want to get limited basically...

    I suspect that too many refunds will be a reason for getting limited. I don't expect refunds, of course, but it will definitely happen sooner or later.
     
  14. Lermontov

    Lermontov Registered Member

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    PayPal adaptive support 90 days delayed payment but I don't think PayPal has an escrow service.
     
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  15. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Well, that's the next thing to look into for me. But for starters I'll do everything manually...
     
  16. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Guys, would a Premier Paypal account be Safer from getting limited and other potential problems than a Personal account?
     
  17. jdog37

    jdog37 Power Member

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    Paypal returns all but the .30 cent transaction fee upon refund... so you will be out that much on each refund. 2.9% will be all that is returned to your account.

    I just did a quick search online and saw that fiver seems to be charging a .50 cent transaction fee to all buyers (non-refundable) Making it $5.50 per gig. I sell on Ebay and know that they do allow a handling and restocking fee for physical products so an additional transaction fee does not seem like it would be against T.O.S. for digital stuff... At least from what I have seen online.

    I would suggest that you call paypal support and just ask them straight out about the best way to handle your situation. Of course dont say fiver clone... but explain how you intend to use your website.

    Just tell them that you are going to provide a website that connects your users with service providers and for a small fee you will be the gateway between the two. Surely they will be able to help answer all your questions much quicker and with more certainty than you will find here.

    good luck.
     
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  18. Gogol

    Gogol Jr. VIP Jr. VIP

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    Umm i am not sure about this. Actually, nobody asked for a refund from me till date lol. I guess paypal returns the fee taken. Don't they?
     
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  19. Scorpion Ghost

    Scorpion Ghost Senior Member

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    Well fuck...

    There must be a way around it. I mean, Fiverr either has a way around it, or all them scammers on there would be sucking them dry. Or that's the reason they implemented that extra 0.50 charge (it wasn't always there).

    But you're right. The best thing would be to call Paypal and get real information from them.

    Thanks man