Another classic scenario illustrating how merchant payment processors can really take the fun out of making money online and turn a successful online business venture for an honest merchant into a disaster. Pay fees to receive your money and don’t even get any real security or protection in return…
Shared at http://www.paypalsucks.com/
In this case, a seller closes an eBay deal on two very expensive antique vases, with the winning bidder paying around $2000 for them via PayPal. After finalizing the deal, the seller and buyer arrange that the vases will be picked up in person from the seller’s house: the buyer has positive feedback on his eBay account and the seller has no reason to be suspicious.
The transaction goes smoothly until several days after the goods are handed over, when the antique seller is contacted by PayPal, who inform them that the money received for the antiques has been refunded to the buyer – so clearly a chargeback has been initiated either by the buyer themselves or by the person they stole the PayPal-linked credit card from. PayPal tell the seller that they may have a chance of appealing the case by sending in shipment tracking and delivery documentation as evidence that they are not a fraud, (the usual course of action in similar cases of defrauded sellers is that they have to prove their own innocence – with actual proof pf delivery often not being accepted as sufficient.) The seller of course does not and could not have any proof of delivery in this case, as the goods were handed over in person. They do however have CCTV footage of the transaction which they send to PayPal before getting in contact with their customer service staff, to no avail (see this post for more on PayPal’s customer service for sellers).
In this case the seller has done nothing wrong and has been the victim of fraud, but there’s an inherent problem with using services like PayPal to take payments when you sell antiques, jewelry, or any expensive goods online. For one thing, sell an expensive item through PayPal after recently setting up your seller’s account, you’re expected to send the item and then wait ‘up to 21 days’ -or the full 21 days in my case- before the money is ‘available’ to transfer into your bank account. That means that for that period, you are completely at the mercy of your buyer and their credit card company. More importantly however, you cannot expect PayPal or the credit card company to fight your case: for many online sellers -whose accounts you can find online- all that happens is you send your goods (even if you’re beyond the 21 day threshold) and are told the money has been refunded to the buyer.
The ideal system for taking payments on sales such as this involving high value or rare goods,would be one whereby you get the payment instantly into your bank account, say by wire transfer, so there can be no chargebacks or similar scams. So you take the payment, you have the money, and then you send the expensive goods to your buyer who has a solid guarantee from an intermediary that they will receive their goods. If not they are refunded by the intermediary.
This is exactly what FizzPay was set up for, to enable online sellers to do business without either the fear of chargebacks, scams and frozen accounts, and without the delays and uncertainty of limited withheld funds.
Have you had problems taking payments with PayPal or other services for your online business? If so, please leave a comment below!