Web Hosting Talk : Web Hosting Main Forums : Ecommerce Hosting & Discussion : Paypal charge backs

[jj@24khost]

So i had a customer who paid for webhosting and was termed for violations of terms of service. The person initiated a charge back and i get slapped with a $20 fee after advising that this was a service and not a good. I also sent an email of apeal asking them to remove the 20 fee anybody else had any luck with paypal refunding the 20 dollars.

[Aldryic C'boas]

You're probably going to end up eating this fee if you didn't have the case prepared ahead of time. Your best choice of action when dealing with TOS violators is to prorate a refund for the remainder of their billing cycle before you actually process the termination. Confirm that this refund has been initiated, then proceed with your notice and termination.

[jj@24khost]

There is no refund on violation of terms of service. Plus this is not a good it is a service which according to paypal is not something you can file a chargeback on but yet even though i advised them of all this since they filed it through there credit card paypal sided with them.

[Aldryic C'boas]

Originally Posted by sosolabs

There is no refund on violation of terms of service.

Well, taking money for unused time is never a good idea, violation or not. Plus, on the upside, if you've already issued a pro-rated refund for the unused time, it's very difficult to attempt a chargeback/dispute. So instead of trying to keep their money, just give them back the unused portion of the billing cycle and prevent the issue before it happens.

[jj@24khost]

So your basically saying go ahead abuse my business and let me give you back a pro-rated refund. Ummm that does not sound like a sound business practice.

[Aldryic C'boas]

No, I'm giving you advice as a professional billing manager with quite a few years experience dealing with online transactions and disputes.

If you offer reliable service, and you're careful to prevent abuse in the first place, most of the issue is negated. If you're also fair and honest with your dealings, you'll see a drastic reduction in chargebacks just on account of people trusting you to take care of them.

[ZackaryP]

All you have to do is call up paypal and ask to talk to someone about a dispute. And you can tell the agent on the phone the story. Also never hold funds from people, you will get in some sticky stuff and it might come back to hurt you (More disputes, and Other things). Also if the user violates the TOS let them know and give them time to fix it then paypal will be on your side most likely if you issue a warning and then they still do not listen.

[cpoalmighty]

Its not about abusing your business here. Its about protecting your business. If you take the full amount for the service and the person did not finish using the service then you will end up in hot water. That is like stealing. Among getting a chargeback that customer could leave negative reviews about you and your company for ill practices. That in turn will deter anyone from signing up with you again if they see those reviews about you and your company.

Its always about thinking ahead. What repercussions will my actions today have on my business tomorrow?

[TimothyH]

Originally Posted by cpoalmighty

Its always about thinking ahead. What repercussions will my actions today have on my business tomorrow?

That's a great way to look at it. If a client doesn't believe they violated your TOS but you go ahead and terminate their account without a pro-rated refund, if they were to post a negative review about their experience with your company, this could give your business bad publicity that it doesn't necessarily deserve.

I'd also take into account that if the pro-rated refund was only $10.00, what's the point of keeping the money considering you'd lose $20.00 in fees if the customer filed a charge back? Obviously this may not always be the case if the refunded amount was higher, but something to consider none the less.

[m8internet]

Take a look at the original PayPal transaction
Is it classified as business or personal transaction?
What type of goods/services is it?

If it has indeed been classified as a goods item, then you need to review the link you are using to your PayPal payment page and change this to service

I have never had any such issue
Yes, customers open a complaint, but PayPal agree after I provide details

Nextly, how long is there between payment date and termination date?
Finally, what countries are both parties in?

With respect to service termination, I agree with other replies above
In the first event suspend the service and allow the customer a specific amount of time to correct the issue
If no action takes place then leave the account until it expires, then terminate the account
If further events occur, then cut your losses and advise the customer you will not be removing the suspension, partial refund if appropriate, and send them a backup of their data; good riddance

[nick771]

For services, you can't do a dispute with PayPal but it sounds like they did it with their credit card company. If you don't have a signed authorization then there's not a lot you can do. The credit card issuers always ask for signed proof of delivery and won't accept an online authorization for a service as any kind of proof. For a service it's practically impossible to win those without a signature.

[jj@24khost]

Originally Posted by m8internet

In the first event suspend the service and allow the customer a specific amount of time to correct the issue
If no action takes place then leave the account until it expires, then terminate the account
If further events occur, then cut your losses and advise the customer you will not be removing the suspension, partial refund if appropriate, and send them a backup of their data; good riddance

we follow this to a t but they did not follow it.