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  1. #1
    Join Date
    Aug 2003
    Location
    Pittsburgh
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    3,479

    Chargebacks and Complaints

    I know a problem with some clients is the fact that even if they're terminated legally, maybe because of a ToS violation, they cry a river to PayPal or their credit card company and request a chargeback. Or maybe even complain to the BBB on a false charge -- these clients seem to want to get revenge on their host, and get their money back out. How often does something like this happen? Is it as prevalent a problem as I think?

  2. #2
    Join Date
    Feb 2003
    Location
    San Jose, California
    Posts
    410
    Well, it depends on the situation and the payment method used.

    If your customers pay you using PayPal and your client decides to chargeback on you for "services not rendered" then you may win the dispute most of the time because it was a non-tangible item. PayPal's buyers protection does not cover services, such as hosting.

    In the case of credit card transactions (merchant account) you must provide proper documentation that service was rendered and that the customer authorized the charge(s). You do this by making sure your credit card customers properly fill out and sign an authorization form, AND provide photocopies of both their card and their drivers license/passport.

    In our experience it has been a bit more difficult to contest a card card chargeback, but we have prevailed when sufficient documentation was submitted to the merchant bank/processor.

    This topic has been covered a number of times here on WHT, so do a search.

  3. #3
    Join Date
    Jan 2002
    Posts
    1,033
    You should have some steps in place that allow the customer and you to try and settle things informally. Out of the thousands upon thousands of transactions we have processed / received and almost one hundred thousand dollars, we have not had one single credit card chargeback. We did however have one PayPal dispute opened two years ago over three dollars and the customer never even contacted us to let us know he was upset but we still worked with him after the fact. How often a chargeback happens comes down to the level of customer service that you offer, how clearly things are stated in your TOS, your ability to identify fraudulent orders, etc.

  4. #4
    Originally posted by nectar
    If your customers pay you using PayPal and your client decides to chargeback on you for "services not rendered" then you may win the dispute most of the time because it was a non-tangible item. PayPal's buyers protection does not cover services, such as hosting.
    My experience has been different; that while the buyer protection policy explicitly states that, and I have pointed it out to PayPal, they took no action to close the dispute opened anyway. I posted a thread in the e-commerce forum to see if anyone had advice on other approaches to getting PayPal to close that type of dispute.
    Dan Grossman - dan @ awio.com
    My Blog | Affiliate Program for Web Hosts

  5. #5
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
    Posts
    7,189
    It more than likely depends on the person that actually sees the dispute. Sure - they have a TOS and OIs they probably need to follow but if someone knows exactly how the Paypal system works - I am sure the user will get their money back.

    People love to take advantage of people all the time. And it is these people especially that know & understand that system

  6. #6
    Join Date
    Aug 2003
    Location
    Pittsburgh
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    3,479
    Thanks for the replies everyone. And, for the record nectar, I did search but couldn't seem to find this topic covered already. My apologies.

  7. #7
    Join Date
    Aug 2004
    Posts
    1,461
    >know a problem with some clients is the fact that even if they're
    >terminated legally, maybe because of a ToS violation, they cry a
    >river to PayPal

    Whever someone asks for a refund I do immediately refund it no matter how damn unjustified it is. Even if I spent money for registering a domain name etc. I will refund it because it simply isn`t worth the stress and you will only lose anyway. There are many stupid people in this world and they will cost you money and you will have to live with it as long as you have to. There is no other way. Do not risk to lose your Paypal subscriptions just because of some idiots. Last time someone complained and said I did not deliver within 24 hours... However, the 24 hours weren`t over when he sent his complaint. But I just gave him a refund because it is not worth the trouble. When I suspend someone I refund their money, too. If you don`t do it they may try to hack your site or to destroy your reputation on the search engines.

  8. #8
    Join Date
    Jan 2002
    Posts
    1,033
    Originally posted by thomas.smith
    >know a problem with some clients is the fact that even if they're
    >terminated legally, maybe because of a ToS violation, they cry a
    >river to PayPal

    Whever someone asks for a refund I do immediately refund it no matter how damn unjustified it is. Even if I spent money for registering a domain name etc. I will refund it because it simply isn`t worth the stress and you will only lose anyway. There are many stupid people in this world and they will cost you money and you will have to live with it as long as you have to. There is no other way. Do not risk to lose your Paypal subscriptions just because of some idiots. Last time someone complained and said I did not deliver within 24 hours... However, the 24 hours weren`t over when he sent his complaint. But I just gave him a refund because it is not worth the trouble. When I suspend someone I refund their money, too. If you don`t do it they may try to hack your site or to destroy your reputation on the search engines.
    Once again, another example of how paranoid you are. If you are worried about each and every of your disgruntled customers trying to hack you and destroy your reputation then maybe you should invest in a security consultant. A security consultant would be able to survey your boxes and secure them for you, leaving you with peace of mind which you really need. My company has received thousands upon thousands of transactions through PayPal which amounts to nearly $100,000. We stand our grand in enforcing policies for the most part. Never had an issue with PayPal to date. Our policies are clear and when a customer thinks otherwise, we direct them to what they agreed to.

  9. #9
    Join Date
    Aug 2004
    Posts
    1,461
    I did collect more than 50k through Paypal, too. However, as soon as you rely on anything or anyone in this industry you are doing a mistake. You can laugh at me now but we will see who laughes in the end.

  10. #10
    Originally posted by thomas.smith
    You can laugh at me now but we will see who laughes in the end.
    It's the fat lady.

    Shhhhhhh...

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