Hello everyone,

We recently received a chargeback against a PayPal transaction. The customer paid for a month of service, but have only used it for a few days (until now).

At this time, we don't mind accepting the chargeback so long as PayPal does not charge additional fee on us. Fighting a dispute may not be easy as we provide intangible service. Furthermore, there is no point in keeping the customer if he really wants the money back.

When clicking the "resolve chargeback" button on PayPal, 3 options are presented:
- Provide proof that I already issued a refund to the buyer
- Accept liability
- Provide evidence for dispute

What are the consequences of selecting "Accept liability" other than the transaction get refunded? Any additional fee imposed on us by PayPal? We heard of PayPal charging a $25 chargeback fee, but cannot find anything about this on PayPal's site. Can someone confirm this?

Thanks.

It is $10 chargeback fee if it is a charge back from the credit card company.
And none if your client chargeback from PayPal.

It is from the credit card company...

I managed to find something on PayPal's site - http://www.paypal.com/cgi-bin/webscr?cmd=p/gen/ua/policy_spp-outside :

If a chargeback dispute is won, the Temporary Hold will be lifted and the seller will be free to use those funds, but the seller will be charged the $10.00 USD chargeback fee if the transaction does not qualify for Seller Protection.

Obviously the transaction doesn't qualify for Seller Protection, and we have to pay the $10 no matter we win or lose the dispute. If that is the case, we will go ahead with accepting the chargeback after receiving feedback/confirmation from the customer.

Thanks for your help.

What did they charge back? Have you read Paypal's TOS? Have you called Paypal about this?

The customer charged back the last month of service which had already been rendered (worth about $70). He even threatened to pursue this matter to the full extent of "domestic US and internation laws". This is funny as the subscription was created/approved by him - we did not overcharged or failed to render the service whatsoever.

He seldom contact us and had no complaint with us during the course of service and is now filing a chargeback for no obvious reason. Not that we are afraid of him, we just think it's not worth to keep this customer anymore and so proceeded with accepting the chargeback and closed his account.

Nope, didn't call PayPal but I think there response would be no different from what's stated on their site.

Its best to accept the liability and move on. There will be $10 fee if its a chargeback from the bank which also means this customer's paypal may be closed.

In almost all cases you can win a PayPal dispute for web hosting services if you are the seller. Simply say that you have the tracking information and write something like "INTANGIBLE SERVICE." Buyers are not protected for such.