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Disputing PayPal transactions

Posted by Michael Bloch in ecommerce (Tuesday December 30, 2008 )

Before disputing PayPal transactions using PayPal’s dispute features, contact the person you paid – it can save you embarrassment and save you both time, hassle and bad feeling.

I’m not used to seeing PayPal dispute notifications in my inbox. I’ve been with the service for 7 years and during that time have only recieved 2 – and both this month. They don’t call it the silly season for nothing.

The first was earlier this month from a long time subscriber to one of my services who, likely short on cash, thought it would be an easy way to get a few bucks back by claiming the last month’s fees were “unauthorized”.

It came out of the blue, there was no other communication from him and the silly thing is that the service he was subscribed to has a rock solid money back guarantee. All he had to do was email me and the cash would have been refunded immediately.

It wasn’t worth the effort defending it for the amount involved so I just refunded it, briefly explained the situation to PayPal and washed my hands of the customer. I guess the state of the economy is bringing out the worst in some people.

The second, today, was a doozy however. You’d think a fellow merchant would know better.

Many merchants pay affiliate commissions via PayPal – it’s very convenient for both parties. This particular merchant paid my commissions a couple of days ago and then earlier this morning did so again. A silly mistake on their part.

However, instead of then contacting me and saying “Yo, Mike, we made a duplicate payment, please refund it”, he immediately opened a dispute for “items not received” and an accompanying note saying “Sorry this was a duplicate, please refund the payment”.

What happens when you open a dispute via PayPal is that the funds from the transaction are frozen and PayPal whacks on an additional fee. There was no way I could refund that payment as it was frozen and given the circumstances I sure as hell wasn’t going to dip into my own funds to pay for his silly mistake. So he’s just going to have to tell PayPal the dispute has been settled, then PayPal will need to unfreeze the transaction before he gets his cash back.

That a merchant could be so brainless threw up other warning flags for me and consequently I’ve ceased promoting his service.

All this could have been avoided with an email that would have taken him 30 seconds to write. It’s certainly a scenario that doesn’t appear on my “what affiliates want” list.

Chargebacks, disputes and associated processes are incredibly frustrating to those of us involved in ecommerce, whether as consumers, merchants or affiliates. It’s really time-wasting and life-sucking stuff and so much unpleasantness can be avoided with just a little communication first instead of bringing in the big guns.

Learn more:

Preventing and challenging chargebacks
Instigating chargeback disputes


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