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  1. #1

    paypal: chargebacks, fraudulent payments, rolling reserve and reversals.......


    Has anyone got experience for using paypal as a payment processor? Did you experince chargebacks, fraudulent payments, got rolling reserve and reversals???? Kindly explain.... Does it affect your paypal account?

    Any comments, views and suggestions we'll be much appreciated.

  2. #2
    Join Date
    Sep 2008
    Dallas, TX
    Have I experienced Chargebacks? Yes, you just need to weed out the bad ones. Occasionally they slip through

    Have I had fraud payments? Yes, one, was for sure fraud. There are others where people *claim* it was fraud and I am not 100% sure tbh

    Rolling ReservesNo, I hope to gosh I don't, that's really going to get me mad if they do

    Reversals? Yup, sucks when it happens

  3. #3
    Hi Jacob,

    I experienced everything as stated in this thread. It's really frustrating that in most cases, buyers always win against us. I run an online dating site, and yes, paypal help us in identifying which are fraudulent payments and place a hold on the fund, and they reversed the payment back to the real card holder. It's okay with me and i understand, since it's a fraud.

    But in terms of recurring payments, (legitimate customers) buyers also win against us and indeed created a chargeback... Though we provided information (evidence) as required by paypal and send to them the terms and conditions of our site upon payment which clearly stipulates that it's "non-refundable". The buyer also agreed to the terms, but still. we loss the fight.

  4. #4
    Hi, I seem to be following Jacob on similar topics today!! Haha.

    In relation to the question about Paypal -
    I have a paypal a/c which I now rarely use. I got some chargebacks and unfortunately yes sometimes you lose the battle and have to pay out - this is why i am not a fan of Paypal - they can dip into your bank if they need to retrieve money so you are at their peril per se. In relation to fraud - Paypal payments dont go through '3D Secure' and that will impact on attempted fraud levels. (Nochex for example use 3D Secure). I think 3D secure is essential for merchants nowadays - if you are unsure what it is it's worth familiarising yourself with it on Google. Paypal have only recently introduced rolling reserves and they are set on a a case by case basis, so it will depend on your business model and how long you have been established - however if your business is new then it is very likely they will ask for a reserve (I would say however a reserve is quite common across all processors - for merchant accounts at least). Paypal should have a little more trust in their sellers - Nochex offer chargeback protection and I have to say its been a good service so far - and rates are marginally cheaper too. Paypal has its major benefits like its size and reach but it depends what it important to you as a merchant.

  5. #5
    Join Date
    Nov 2006
    If you get a Preferred account you don't have to pay the chargeback fees.

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