Hi all,
Today, one of our customers has created file a claim on Paypal.
Due to dDoS attacks his server was shut down permanently by our Data Center. At once, he created file a claim; he required a refund, but our Data Center is never ever give a refund for us ( this is their ToS ), so we could not refund for him. This amount is a few hundred dollars.

We want to response/dispute this problem on paypal, but we could not find a link to response, paypal only gave us three options:

1. Issue a refund to buyer, I can provide tracking, I have a proof made refund.
2. I can provide tracking information.
3. The buyer has already been refunded and I can provide proof of the previous refund.

We do not want to select one of above options; we want to dispute and let Paypal know the story of this client. We think Paypal seem to be side with the customer.
Have you ever get this problem ? Do you have any tips so that we, a seller, can win and safe with the case like this ?

Any tips and advise are appreciated !

Thank you,

Tommy Quang

Originally posted by tommyquang


....Any tips and advise are appreciated !....



Greetings,

With respect to dedicated server customers, I suggest that you require your dedicated/colo clients to submit a signed copy of your TOS/AUP/SLA/service agreement contract and credit card authorization form by mail/fax, along with a copy of their CC front and back plus a state issued I.D.

For large purchases/service orders, I suggest another form of payment besides Paypal, a cashiers check/M.o. are good forms of payment. We use Paypal as well but only on our Virtual servers/Reseller plans to protect our merchant account in the event of a chargeback. In our 6 years of webhosting, we never had any chargeback on our dedicated and co-lo clients (we thoroughly pre-screened our prospective clients) but we had a few on our virtual servers/reseller plans.

I'm not saying these people aren't decent but it's a way to protect the finances of your company. I find that most 98% virtual hosting customers are decent good people with the exception of a few.

In general terms, Paypal will usually side with the customers, this is one of the reasons why you don't accept Paypal payments in excess of $50 unless you can afford to take a loss of hundreds of dollars in chargebacks. I know, we cannot afford it, so we make sure that it won't happen to us, not in a large scale.

Have a good day.

Paypal does not protect buyers from intangible product issues. There should be an area to explain the issue. If not, call them and let them know that it was an intangible product.

Originally posted by goodydomains
Paypal does not protect buyers from intangible product issues. There should be an area to explain the issue. If not, call them and let them know that it was an intangible product.
very true, however if it is his bank or card issuer doing the chargeback paypal will give the money back to the buyer:(

I don't mean to sound rude, but you have a very slim chance of winning this dispute. Since you are not protected under PayPal's Seller Protection Policy, and cannot produce a formal shipping receipt due to it being an online service, they will basically discount whatever you have to say and eventually credit the funds back to the customer. That has been my unfortunate experience with PayPal (and which is why I no longer use nor accept PayPal any longer).

There were situations where I was able to clearly point out discrepancies in the customer's argument, as well provide a good case and logic, however the result was still them "siding" with the customer. They make it seem as though they conduct extremely thorough and fair "investigations" for both sides, but I've always been more under the impression that they have some automated script simply send out scheduled emails (with templated crap) and then reverse charges back to the customer. Everytime I responded to one of their requests for more information once a customer engaged a dispute, I never heard back even when I sent out new emails demanding a follow-up.

All I can suggest is that you keep a dated log of all the events that happened from A. the time the customer signed-up to Z. when he had initiated the claim against you with PayPal. List all information you were able to collect from the customer -making reference to what he paid for and what services were rendered, and include all correspondence between both of you as well as a copy of your TOS.

Other than that there's not much else you can do. PayPal doesn't tend to direct all their resources towards issues like this, especially when it's much easier to refund the customer and go after you for payment. In the case of a chargeback it would also be far more costly for them to fight it with the credit issuer. But, good luck..

Originally posted by tommyquang
he required a refund, but our Data Center is never ever give a refund for us ( this is their ToS ), so we could not refund for him.

Whose TOS did your client agree to? The TOS of your upstream provider, or your own TOS? Your client is only obligated to what is says in the TOS that they agreed to.

Why use paypal if you have a merchant account that accepts credit cards? Almost everyone who have paypal has credit card. it's makes no sense there... why accept check when you have an atm maching in your store?

Originally posted by madtomic
Why use paypal if you have a merchant account that accepts credit cards? Almost everyone who have paypal has credit card. it's makes no sense there... why accept check when you have an atm maching in your store?

We have a merchant account but still accept Paypal. There are people out there that prefer to use Paypal - why lose their business?

Thank you for responsed !

This customer have been violated the ToS at our Data Center ( ezzi.net ) that why our Data Center shut down his server permanently. We think that we can dispute on Paypal only, try to let Paypal know this client violated our ToS, but it seem we do not have a change to dispute because this was an intangible product, and Paypal is requiring we to provide a tracking information :(
This seem a seller web hosting like us ( and you ) was not get protected as well. So bad :(

yes, there are people who use it so they can easily do chargeback or refund if needed and paypal don't stand on merchant side they side with customer. you gain some, you lose some...

Well, if the fact was like this. The customer will easy to do some cheat. They bought a server and make payment through Paypal then they will used it for 15 days. After that they do file a claim then they get money back :(

The problem here is that the buyer identified this as "tangible goods" when it is not. Try opening a support ticket w/ Paypal and explain that this claim was made in error, it was identified as a tangible goods claim when in reality it is intangible goods/an internet service. Not sure if it will work, but it's worth a try?

Be sure to quote the claim number & everything, in your support contact w/ Paypal.

:D Bailey

Select "have tracking information." On the next page for tracking number put their customer number or order ID. For shipping company put "internal".

Originally posted by mj4589
Select "have tracking information." On the next page for tracking number put their customer number or order ID. For shipping company put "internal".


Actually that is partially correct. In the 'shipping' field just put "Virtual item"

This tells paypal the item was a service and not covered under the "tangible goods" policy.

Thank you for your tips. We will try out these ways :)

Originally posted by Defcon|Rich
Actually that is partially correct. In the 'shipping' field just put "Virtual item"

This tells paypal the item was a service and not covered under the "tangible goods" policy.

Bingo. I haven't heard of that failing for anyone. However, if there is a bank-level chargeback, then PayPal will snag the funds for good.

We've won every single paypal dispute we've ever had, just because its hosting, PayPal will not honor the reversal for your client if you explain it to them. They know how it goes, if people could just take their money back everytime they violate a hosts TOS spammers would run rampant buying servers from every DC in the world and just doing paypal reversals, and then nobody would accept paypal...

Originally posted by Take-IT-EZZI
We've won every single paypal dispute we've ever had, just because its hosting, PayPal will not honor the reversal for your client if you explain it to them. They know how it goes, if people could just take their money back everytime they violate a hosts TOS spammers would run rampant buying servers from every DC in the world and just doing paypal reversals, and then nobody would accept paypal...

Paypal has an awesome policy regarding intangible goods, however no bank will back them if there is a bank level dispute. That is where the issue usualy lies, paypals mouth writes a check it's butt cant cash.

I would hope that you have a clause in your TOS covering this situation and that anyone doing a chargeback for something like this is charged a fee and taken to collections for the money? I have a clause in mine and I sell shared hosting so I highly doubt I will ever use this clause.