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Taken easy with PayPal and potential "customers"

Questions related to the distribution, marketing and selling of applications created with NeoBook. (Formally titled: "Making Money with NeoBook")

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Taken easy with PayPal and potential "customers"

Postby dec » Thu Feb 23, 2012 2:40 am

Hi NeoBookers,

Taken easy with PayPal and potential "customers". On 24 december 2011, I receive an order from PayPal that apparently are OK. PayPal never inform some suspicious thing or something else, the pay appear "instantly" and I proceed to send the registration data to the customer.

Yesterday, 22 february 2012, PayPal inform me that the client put a "not autorized use", commonly know as "chargeback" (I discover this yesterday) and PayPal hold the money (which is not the money for such order, but other money) from my account with no more explanation.

So I read and read over Internet about a new word: "chargeback", and therefore thinking that the money are lost, PayPal never refund the hold money, or in other case a miracle ocurr. This money represent more that my sales for this month, and of course I'am very sad.

So, taken easy with PayPal and potential customers:

1º When receive an order, don't send the registration data, but contact with the buyer and ask him what user name and email address want to use. In some cases, for example, if the buyer don't answer your mail, you "close" the order with no accept the money.

2º Read about this new word (maybe not for you, but maybe yes) "chargeback", and don't forget in any manner that you can elegible for his kind of "problem", "fraud", "scam", or whatever you want to name. Know that a buyer have up to 180 days (you read well) in order to "chargeback" an order.

3º The problem is not the registration data (hey my friend, enjoy my no support, and of course forget to use this registration data on future plugin releases) but the money, which is taken from your PayPal account, hold by PayPal, with no questions nor explanations. In fact "chargeback" are "normal in business" and a "seller must accept this things".

4º When a "chargeback" is initiated, PayPal hold your money if you have money on your account, or put a "negative" money on your account, and then can reclaim for this using a thirdty party company dedicated to this kind of things. So don't think you can get off the money from PayPal and forget. The "chargeback" is made, with "positive" money or "negative" money.

So taken easy with PayPal and potential customers. Ask the customer, put 1.000 eyes over the provided data, look if the name is the same that figure on the email address, contact with him and ask for some information, user name, email: try to maintain a conversation with the customer before accept the order and "get" the money. You are now advise!
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Postby Gaev » Thu Feb 23, 2012 6:09 am

Dec:

Sorry to hear about this.

PayPal is notorious for such shenanigans.

People on eBay have complained that they "blindly favour the buyer" in any disputes ... hold the amount in escrow (of course gaining free interest from it) which usually forces the seller to succumb to the "often unrational demands of the buyer".

One of my clients (in Australia) suddenly found out that (after years of use of their services), PayPal decided to quarantine (hold) all his monies for a 3 month period before releasing it ... reason ? ... they did an audit of his account (without anyone ever complaining) and realized that his business was renting Jukeboxes/Karaoke machines ... usually, such events are planned months in advance ... so people could be paying him months in advance (although he does not ask for payment until a month before the event) ... and PayPal decided that this would not allow recourse to the buyers (who have to complain within a short period of making the payment) ... since this was 100% of the way his Customers paid him, my Customer had to scramble to get an additional line of credit from his bank so he could continue paying his staff, rent and other expenses ... needless to say, this Customer no longer accepts PayPal ... just credit cards and via an Australian Payment Gateway.

I had a personal experience about 3 years ago ... after spending considerable time with a potential customer, I advised him that the platform he was trying to use was not suited for his online Application ... he thanked me and sent me a $100 payment via PayPal (I did not ask for it) ... but PayPal informed me that they would not release this amount because it apeared to be a scam ... the reason being that ... even though there was money in their account to pay for this transaction ... the other party had not used PayPal for about six months !!! ... and when Paypal asked them for some verification, there was no response ... so they assumed that I had been part of some scam !!! ... of course, it was only $100 and I was not expecting it in the first place, so no big loss ... but some malicious third party could do the same and leave you holding the bag.

Unfortunately, there is no competition for PayPal in Canada ... Google Checkout does not take on Canadian merchants ... so we have to grin and bear it ... and pray to our lady of 'ProtectionFromPayPal' :-(
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Postby dec » Thu Feb 23, 2012 6:23 am

Hi there,

Thanks Gaev. Take a look at this. In fact we can have two types of complaints with a buyer on PayPal. First of all is named "a dispute", and then the buyer and the seller can discuse about something. The second type of dispote is a "non autorized charge" (which is my case now) and you don't get any reason from the buyer (maybe a scammer), any reason from PayPal, and only "automatic" emails and your money hold.

In fact I write right now a complaint to PayPal. Ok. I accept are victim of a scammer, I don't say PayPal is responsible (even when him never said the operation can be a fraud, on the contrary, everything appear right), but I don't understand way nobody from PayPal contact with me to say, at the least, "Sorry for that". So I loss my money, loss the PayPal comission, maybe pay a fee for the PayPal investigation and never receive a personal mail saying "Sorry for that".

This is unaceptable to me, and you have reason Gaev, if any other PayPal alternative is out there I abandond PayPal without no thinking. I repeat: can asume this things happend, and don't claim about PayPal for this, but the PayPal actitude is very bad. And the protection againts fraudulents buyers or stolen credits cards... nothing. Sorry for this text, but my intention is to put all NeoBookers searching on Internet about "PayPal chargeback". Like a wise man said: learns from the mistakes of other men.
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Postby David de Argentina » Thu Feb 23, 2012 7:17 am

David,

Sorry to read this.

I think all plugin developers are exposed to such manipulations.

I think there's a good idea to create a list of "malicious clients" in order to prevent them from happening to other developers as well.

I think it's very difficult for these customers to return the money, but the moral sanction of this community could be a good starting point.

My devaluated cent,
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Postby dec » Thu Feb 23, 2012 7:38 am

Hi there,

I think all plugin developers are exposed to such manipulations.


Not only plugins developers, but anybody which use PayPal (and maybe other similar companies too) as a seller!!

I think there's a good idea to create a list of "malicious clients" in order to prevent them from happening to other developers as well.


In this case the customer never appear on this forum. And this is another point in order to make a deal or not: is the customer knowed? If not, take your cautions. On the other hand, I don't know if the person that appear on the order is really the person who make the fraud. So, caution here too: stop to publish their name or something, because we can have more problems.

:roll:
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Postby Wrangler » Thu Feb 23, 2012 8:24 am

I've had merchant status and have been taking credit cards for 20 years. Either through merchant services such as Cardservice International, as well as PayPal, and Google Checkout.

The rules below apply to financial institutions such as paypal who are based in the united states. Rules may differ if based in other countries.

Here is the lowdown on disputes or "chargebacks". Once the customer purchases an item, and the transaction has been approved, the customer has up to 2 years in some cases, to file a dispute. There can be multiple reasons for him doing so:

Unauthorized transaction: Could be the credit card was stolen and unauthorized purchases have been made with it. But this could also mean they don't recognize the merchant, and is the most common. They bought a DEC plugin, but can't relate the purchase to the charge shown on their statement. In this case, his statement will show a charge by "paypal", but it doesn't state what was purchased and the customer doesn't remember placing the order.

Once the customer files the dispute with the financial institution, an investigation begins. The merchant is contacted and has around 45 days to contest the dispute. He must submit copies of all paperwork related to the transaction to those doing the investigation (in this case paypal). Paypal provides a place on their site to do this.

Here is where things can go against you. All credit card processors tend to lean toward the side of the cardholder, or buyer. It has always been this way. But some of the regulations haven't been upgraded to the 21st century. Before online purchases, the customer gave you his card in person, and you have him sign a sales draft. Then you have his signature on something as proof, and most of the time you will win the dispute. But with online transactions, which are also known as 'non-swipe' transactions, the customer doesn't sign anything. So you may not win the dispute because of it.

ALL disputes require that the merchant contact the customer and try to settle first. Most of the time it's just because he didn't recognize the merchant, and once you call him and tell him, he can call the bank (paypal) and drop the dispute. This has worked well for me many times.

There ARE those who use this to get something for free. They will place the order, wait a half hour and cancel the order, hoping you will send an unlock code in the meantime. This happened often to me using Google Checkout. If they can't cancel the order, they will file a dispute, knowing that the cardholder will usually win and that you have no way of destroying the product sent.

All that being said, I would highly recommend that you call the customer and reason with him. You'll find that most people are honest. Also inform him that you have the option of turning the matter over to your debt collector, who will also report the transaction to the credit reporting agencies as 'nonpayment', which will hurt his credit. If he agrees to call and drop the dispute, be sure to inform paypal about it. State the time and date you called the customer.

Also submit to paypal all documentation you have about the transaction. Although you probably won't win, there IS a chance you will. Send copies of emails, your return policy on your web site (if you don't have one, you should) and anything else related to the purchase. You can also call paypal. Here is the number I have on file: 888-221-1161.

Here is a copy of my return policy on my software site:

HighDesert Software provides free trial versions of our software so you can try it before you buy it. The purpose of this trial version is to allow you to determine whether or not you are satisfied with the software and it's functionality and usability before you need to purchase it.

This is a full risk free trial at no cost to you. Unlike physical goods, electronically distributed software (downloaded) and software licenses can easily be duplicated. Once a license or registration code has been issued, it is, unfortunately, not possible for us to recall all copies or ensure their permanent destruction. Therefore, HighDesert Software cannot provide refunds - all sales are final. It is assumed that if you purchase a license, you have evaluated the software through using the trial version and are satisfied with it.

Unfortunately, these things are a part of doing business. Until regulations are updated to look more at the merchant's end, it will be this way. Financial institutions run on greed. They will choose the route that makes them the most money and be damned the rest.

Hope this clears up how things work. Stick to your guns and fight it. I hope you are quicker at the draw than them.
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Postby dec » Thu Feb 23, 2012 8:43 am

Hi there,

Very interesting Wrangler, however... The "customer" just don't reply my mails and I not have their telephone number. On the other hand, maybe this "customer" put an invalid telephone number (PayPal not recomend to claim for a telephone number) if I claim for this.

I read to much cases around the world, and PayPal affirm that certain percentage of the transactions can end with this kind of issues. The only I can thinking are thinking for many other people: why PapPal don't cover this things? We paid to PayPal to many in comissions, if I'am not wrong more than others TPV's.

But I can't expect nothing. Just to say: this morning I put a complaint on PayPal about my issue,... and what happend? No body response to my complaint. So I feel like a "speck of dust" to PayPal, and this is not very good to me. And I just expect this at this time! The money? I loss the money for sure.

Just to remember:

1º PayPal hold the money of the order, including their comision!

2º PayPal no answer me any of my complaints nor email I send *

3º PayPal apparently offer you a secure way... but it's not the case

Why the only answer I expect from PayPal now is "Sorry, this dispute cannot be recurred and your money is loss. Eh, we charge 12€ in order to investigate this dispute. Thanks for trust on PayPal"??? This is the only answer I expect. Or a miracle. So I'am sorry, but I cannot feel good again with PayPal and never think I have secure with them. To bad...

* This issue begin to me yesterday in the morning.
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Postby Wrangler » Thu Feb 23, 2012 8:53 am

OK. But just so you know, this is the way it happens with ALL payment processors.

How long ago did you send paypal the email? They are known to be slow in responding. You may want to give that more time. After a week or so, send them another, asking for current status on your claim. Keep after them. Don't give up until the fat lady sings.

I would call paypal on the phone. Here is their contact info I just got off their site:

1-888-221-1161

1-402-935-2050 (if calling from outside the U.S.)

For eBay questions, go to www.ebay.com, sign in to your account, and click Customer Support near the top of the page.

4:00 AM to 10:00 PM Pacific Time Monday through Friday
6:00 AM to 8:00 PM Pacific Time Saturday and Sunday
Please note that hours of operation may vary on holidays
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Postby dec » Thu Feb 23, 2012 9:00 am

Hi,

Wrangler, I read to much about this question on the net. Lots of people have the same issue. The PayPal phone on my country is a "pay per use" phone number. I can't pay more for nothing. A momment, for nothing? Yes. Because I read lots of people call to PayPal and the person who answer can't do anything about. So the only thing you get is nothing, after paying for the call. I know PayPal is slow to answer. But hey, very fast to hold the money from the account...

No. Definitively PayPal deliver on you the responsability for all. You need to be care with your potential customers, because PayPal does nothing. I unknow the word "chargeback" until yesterday, that I can read on the PayPal documentation. So PayPal don't lie to anybody, but anybody know this issue before happened. On the contrary, PayPal inform you of an order with no problems, "instantly", "you can send now", "everything fine"... and two months later loss your money with no excuses.
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Postby dec » Fri Feb 24, 2012 7:52 am

Hi,

Some advances on this, because maybe you are interested. After I write two complaints yesterday agains PayPal, PayPal call me some minutes ago, explaining the issue and tell me that PayPal is now decided if "recurre" to the target company or not.

Well. After my readings about this, I still thinking the same: I loss the money. But, at the least, it's good to hear a person from PayPal, and I tell just this to PayPal: I don't claim againt's PayPal, I understand now this things happend, but I want for a "sorry" from PayPal. Not other thing.

Well. Maybe this call can be considerer a "sorry". In fact the person who talk with me admit the situation can be from an scammer, in other words, PayPal don't think I do anything bad, but is the "customer" will be unfair: if at the least the "customer" is the same that the credit card owner...

Anyway. I maintain here inform you about the progress. But I expect the same that yesterday: the money are loss in the wind... And I can't understand what get the scammer. They cannot be use the plugins anymore. Cannot update the plugins. Cannot offer security in their programs.

What win this guy? Nothing at all. Just cause disturbs and waste the others time.
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Postby David de Argentina » Fri Feb 24, 2012 11:49 am

DEC, Wrangler:

Any action you want to do versus Paypal must be located PERSONALLY on the council office of Buffalo.

Some time ago, Paypal "lost" one of my checks, that "casually" was payed near Florida, and never refund me the money.

If you are outside US, forget do a reclaim.

My 0.01
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Postby dec » Fri Feb 24, 2012 12:30 pm

Hi,

Gave say above: no to much alternatives out there. However I insist that PayPal is not guilty on this case. At the least not completely guilty. The scammer is who initiated this issue, not PayPal. If we have others alternatives maybe we can change to the more convenient, but, anyway, PayPal offer a service which in the mayor cases work well. Of course anybody can have complaints and with sufficient reasons.

So take caution, pay atention with the orders, and on any doubt, stopped, ask to others, don't thing everything is good, even when apparently all is good...
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Postby dec » Wed Mar 14, 2012 6:48 am

Hi to all,

Today come the case resolution. Of course the things happend like I expected: the money are lost. Not only the money of the first order/transaction, but also the money for the PayPal comision, and the PayPal fee for look into this question.

In fact PayPal charge to you about $20 for this case. And sum to this the original PayPal comision, becase this are lost too. Well. The next time I receive a "ChargeBack", I think at least I not claim. Ever when I have the proves, why loss more time and money for nothing?

...
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Postby Neosoft Support » Wed Mar 14, 2012 10:57 am

It would be nice if PayPal would let you know if a payment came from a credit card or an account transfer. Then you could give the order extra scrutiny. It would also be nice if PayPal would let you choose not to accept credit card payments.
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Postby dec » Wed Mar 14, 2012 11:38 am

Hi Dave,

Neosoft Support wrote:It would be nice if PayPal would let you know if a payment came from a credit card or an account transfer. Then you could give the order extra scrutiny. It would also be nice if PayPal would let you choose not to accept credit card payments.


Absolutely. But I search into this and not found a manner to eliminate the Credits Cards nor other pay method, like a bank transfer. Anyway, and this is for everyone who read this: take carefully with the transactions, read all you can about "Chargebacks" and how to protect against this. In few words: learn from my error, not from your own error, if any.
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