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Thread: PayPal Refunds

  1. #1
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    PayPal Refunds

    Hi,

    We have a strict "No Refund" policy and it's not like we hide it -- it's the very first line of our TOS and it's in bold to boot. A recent situation came up in which a customer threatened to get their refund through PayPal.com. This is the first refund request we've had from our customers in a long time.

    My question is, how do you as a business offering services (No physical goods, tracking #, etc.) handle customers requesting refunds from PayPal? If PayPal sides with the buyer, it would lead to them being placed in collections and in some cases a lawsuit (depending on amount lost) and all these other horrible things when a user tries to circumvent their own legally-agreed-upon terms.

    I've only had a couple buyer chargebacks, all in which PayPal has sided with the company rather than the [ex=]customer. I'm just looking for opinions. How does YOUR business handle chargebacks with a no refund policy on services?

    Thanks!

  2. #2
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    I found that if you say its a virtual service they will normally side with the seller

    Rus
    Russ Foster - Industry Curmudgeon

  3. #3
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    Moved to Running a Web Hosting Business.

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  4. #4
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    I've only had a couple buyer chargebacks, all in which PayPal has sided with the company rather than the [ex=]customer. I'm just looking for opinions. How does YOUR business handle chargebacks with a no refund policy on services?
    Interesting, PayPal almost always ruled in favor of the customers in many of my cases before, especially those which didn't involve physical products. Though this was a while back before I sold the company.

    Most of the times, if the cases were not very extreme, I would just go ahead to refund them and avoid all the hassles. I used to have a merchant account, and everytime if a customer requested refund or filed chargeback on the conditions that he/she didn't entltle a refund, I would record whatever necessary information and sent it to my merchant provider for investigation. I have never lost a case, just many cursing from the customers' sides.

  5. #5
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    They've sided with us on a couple past issues but I think that had to do with the fact that the user was outside the United States and/or wasn't a verified member. If we were talking about $10 or $20, I'd go ahead and approve the refund, however a couple hundred dollars -- I can't do that.

    Is it becoming harder for businesses to get PayPal to side with them when a user who has not purchased a trackable item does a chargeback?

  6. #6
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    Re: PayPal Refunds

    I hope you learn your lesson and will switch to regular merchant account who will let you tell your side of story in order to block fraudulent chargebacks.

    PayPal, 2CO, MoneyBookers and etc - they are too affraid of chargebacks and they will side with cardholder all the time.

    Regards

    Steven

    Originally posted by ServerChange
    Hi,

    We have a strict "No Refund" policy and it's not like we hide it -- it's the very first line of our TOS and it's in bold to boot. A recent situation came up in which a customer threatened to get their refund through PayPal.com. This is the first refund request we've had from our customers in a long time.

    My question is, how do you as a business offering services (No physical goods, tracking #, etc.) handle customers requesting refunds from PayPal? If PayPal sides with the buyer, it would lead to them being placed in collections and in some cases a lawsuit (depending on amount lost) and all these other horrible things when a user tries to circumvent their own legally-agreed-upon terms.

    I've only had a couple buyer chargebacks, all in which PayPal has sided with the company rather than the [ex=]customer. I'm just looking for opinions. How does YOUR business handle chargebacks with a no refund policy on services?

    Thanks!

  7. #7
    Join Date
    Feb 2004
    Posts
    390
    When you reply to a dispute, it lets you choose a few options like "item delivered, have tracking number; give refund; etc" Choose the item delivered option. For tracking number choose other and for description put "internal". Put their customer number where the tracking number should be. This works for me.

  8. #8
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    how about the fee that paypal charge? will paypal give the entire fund back to customer along with fee that they charge to process it?

    i'll hate to pay out of my own pocket for the fee... if paypal keep the fee

  9. #9
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    Originally posted by jt2377
    how about the fee that paypal charge? will paypal give the entire fund back to customer along with fee that they charge to process it?

    i'll hate to pay out of my own pocket for the fee... if paypal keep the fee
    PP will refund the fees. At the interface, you put in the total refund and the fees will be automatically calculated into the total. You won't have to pay a dime for the transaction if you refund the payment through the Refund link.

  10. #10
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    Originally posted by Eric Lim
    PP will refund the fees. At the interface, you put in the total refund and the fees will be automatically calculated into the total. You won't have to pay a dime for the transaction if you refund the payment through the Refund link.
    thank.

  11. #11
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    Re: Re: PayPal Refunds

    Originally posted by steven-v
    I hope you learn your lesson and will switch to regular merchant account who will let you tell your side of story in order to block fraudulent chargebacks.

    PayPal, 2CO, MoneyBookers and etc - they are too affraid of chargebacks and they will side with cardholder all the time.

    Regards

    Steven
    We're searching for an alternative to 2CO and PayPal which will allow us to do recurring billing. We use ProPay mainly for credit card processing now and have had no complaints, however like everyone else people use on this forum (PayPal, 2CO, MB, etc.) they side with the card holder.

  12. #12
    Join Date
    Aug 2005
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    Simply give those people their refunds. It is not worth the hassle. Really, I mean I used to get angry over such issues. Today I give a refund and don`t even think about it. Maybe I will live 2 or 3 years longer because of this...seriously.... They are getting their refund anyway. They can do a chargeback or Paypal refunds it. Don`t even bother...if only for better health.

    One more thing: If someone orders my largest account and pays yearly it is fraud in around 9 out of 10 cases so I contact the Paypal account owner before setting up the account. Usually they tell me that their account was hacked and I give them a refund...simple.

  13. #13
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    Originally posted by thisisnoneofyourb
    Simply give those people their refunds. It is not worth the hassle. Really, I mean I used to get angry over such issues. Today I give a refund and don`t even think about it. Maybe I will live 2 or 3 years longer because of this...seriously.... They are getting their refund anyway. They can do a chargeback or Paypal refunds it. Don`t even bother...if only for better health.

    I am in complete agreement. The time and energy involved in stopping a chargeback is usually not worth it, and often times fails anyway.

    I disputed one time due to the size of the claim and the fact that the resources had been used for a few months. It took some time proving their fraudulent claims. Had to contact the ISP for verification of the user of several IPs (dynamic..yadda, yadda). I still sometimes wonder if that few hundred bucks was worth the hassle.

    Refund, then breathe easy knowing you are in the right.
    Gard
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  14. #14
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    In the past I have had three PayPal disputes. PP always sided with us and never with the customer.

    If the amount isnt large, I would refund to keep customer satisfaction up. However if your ToS clearly states no refunds and you have supplied the service you agreed then this is your decision.

  15. #15
    Paypal will not side with the customer when dealing with intangible services. I would not worry about it.
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  16. #16
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    Originally posted by goodydomains
    Paypal will not side with the customer when dealing with intangible services. I would not worry about it.
    I've been under this impression, however wanted some other opinions.

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