PayPal Dispute – Does PayPal Favor Buyers Over Sellers?
PayPal Dispute – What do you think of the title above? Does PayPal favor buyers over sellers?
My recent experience says yes to that question.
There were 2 incidents that led me to that conclusion.
The First Incident
This happened about 2 months ago.
By now, you should already know that I run a minisite design service. I use PayPal to take payments from customers.
One of my customers, let’s call him X for simplicity, ordered a design package from us.
Not long (I’m talking about one day) after we’ve delivered the design to X to his satisfaction, he filed a PayPal dispute saying that the payment charged by us (for our design service) was without his consent and knowledge.
We then went ahead and explained to PayPal that this was not true and provided them (PayPal) with proof of our past communication with X where he provided us with feedback on how he want his site designed, and also showed them the minisite we’ve designed for X.
We even referred to X’s website (yes his own domain which can be verified by a simple whois lookup) where he was using our minisite design and at the bottom of the page there’s a “designed by wowminisites.com” small image.
Despite all the proof we’ve provided, we lost the case and X was credited back with his money. This means we’ve designed his minisite for free.
After this incident, PayPal said that “your account has been noted for future reference”. I don’t know about you, but for me this indirectly implies: “Hey you better behave yourself. We are constantly watching you. If your account continues to receive disputes, we may have to terminate your account.”
The Second Incident
The second incident took place 2 weeks ago.
This time, PayPal decided to randomly investigate one of the payments I received from a buyer. They claimed that the investigation was completely random and was not an indication that my account was under constant surveillance because I was blacklisted or anything like that.
Once again to make it clear, the investigation was initiated by PayPal and not by the buyer.
After some back and forth communication, PayPal once again deemed this payment to be inappropriate, resulting in the funds that we received from the buyer to be returned to him again.
(click the image above to see clearer)
Conclusion
During these 2 incidents, PayPal kept asking if I have shipped the product to the buyer and if so they need the tracking information for the shipment.
If you sell digital products like information or software where no physical items are actually shipped out to your customer, or if you sell intangible services (like my minisite design service), PayPal is not on your side. They are biased toward buyers, as can be seen from my 2 incidents.
So does this mean that we should give up selling digital products and services altogether? Just because PayPal is in favor of buyers instead of sellers?
Of course not!
While I’m very unsatisfied with PayPal for how they handled my 2 incidents, the money I made via PayPal is much, much more compared to the losses I suffered.
In addition, there are other merchant accounts or payment processors out there that you can use. It would be foolish to give up on your business simply because of this small problem.
Lessons Learned
In business, you need to learn to let go.
Most customers are good, honest people. Nonetheless, there are always going to be a few rotten eggs no matter what.
It’s a numbers game. The more sales you make, the more rotten eggs you’re going to have. You just need to treat this as a business cost and learn to let go instead of taking it too hard.
Don’t waste your time fighting or arguing with cheaters like X above. It’s not only a waste of time, but also a waste of energy. Let them go and move on to the next customer. Ban them from buying your products or services FOREVER.
Concentrate on your good paying customers.
Speaking of customers, do you know that you can deliver the best product and serve customers with the best service, yet there are always people who complain no matter what?
In this case, you also need to let go. These whiners are not worth your attention and time. Kindly refund their purchase and wish them the best of luck.
What about you? Do you think PayPal favors buyers over sellers? Do you have any experience when it comes to PayPal Dispute? Tell your story below…
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15 Responses to “PayPal Dispute – Does PayPal Favor Buyers Over Sellers?”
lucy on July 17, 2011
hi! i just got some shipment from china and it is a totall mess it is around 2000 usd that include shipping cost. the stuff is damage some of the style that i order i never recieve it, bad quality, glue is all over. this is first time for me and i am new to paypal should i open a dispute to paypal? also if they ask me to send back then i am responsible for that too??? i really need help, he said he give me 300usd but his stuff not worth a pennies. i need advise please. can i get the full amount back i got all the prove of picture and products order send to his email. please let me know thanks
Todd on March 10, 2011
I opened a case with a buyer who told PayPal item was not as described. I sent buyer a tangible Data DVD with tracking included. The data disk held eBooks from my collection. I described the item as an electronic manual sent to your residence via first class shipping.
I will tell you, buyers always have the option to return items only if its unopened. I’m a manufacturer and here the buyer opened the manual, placed it in his computer and did not like the clickable options provided in the PDF file. Thus preceding to say, you Sr have “copywrited” the manual and I’m not happy.
I responed with changes have been made, and thus I have the source code rights. I did included this in my description of the product, and if he had any question he should have asked before he bought the item.
At any rate, the buyer is trying to scare me, but I am within my rights. The auction description is correct, and I did state everything that was included on disk. I am a nice guy, but I do not take kindly to intimidation. My kindness is not my weakness
I will need some advice on this as I am a new seller on eBay, but I know the laws and would never copy and/or scan from a book, ever! As you may know PayPal, and eBay are really the same company will they rule in favor of buyer? Am I currently waiting to hear back from PayPal and eBay that the buyer is right? Or will they see that item was as described?
Welly on March 23, 2011
I’ve never sold items in ebay before, but I do know that paypal tends to favor buyers. All they need to do is file a dispute and 9 times out of 10 they will win, and us as sellers will lose. Sad but true.
I hope everything goes well for you.
Take care.
avninfotech on November 22, 2010
Hello,
I have won the case.
Now the scammer is telling me that he will go to lawyer and case against me, is it possible to case?? I am in india Scammer in USA.
Please Help.
Welly on November 24, 2010
I’m not sure about that. It’s best that you do some searching on the net as I’m really not good at this kind of thing.
Best of luck to you.
avninfotech on November 15, 2010
Hello,
we are web design company and we provide SEO also we have complete SEO for Client 3 Months and his web site gave 1 Rank in google.
After it he Dispute with paypal and my account have -$900.
i dont want to payhim back bcoz i work very hard.
Any suggession?
Welly on November 16, 2010
The best advice I can give you is try to fight for your case, even though there’s a high chance that you’re gonna lose.
But try it anyway, because if you don’t you’ll always be thinking “why didn’t I try to fight for it” in the future.
Whatever the outcome, ban him from purchasing any of your services in the future.
avninfotech on November 16, 2010
Thanks so Much for Advice,
i am submitting all document and see what will outcome
i will inform you.
we have to open a website against those Fraud clients.
i also want to know if i will not pay to paypal then they can do case against me?
Let me know
Thanks
Welly on November 17, 2010
You’re welcome.
You won’t have a choice. Paypal will just take away your money from your account and give the money to the buyer.
Sad but true. Hope you get this sorted out asap.
Greg on October 25, 2010
Yes, I sold a document online which was emailed to the buyer. They left neutral feedback and the filed a dispute claiming they had not received the item. I couldn’t provide tracking information because the item was emailed. I submitted proof of the feedback left but Paypal still ruled in their favor. Not fair at all.
Welly on October 25, 2010
I hear you. Best is to move on and keep servicing the good customers. There are always going to be a few bad eggs in whatever market you’re in. Just concentrate on the good paying customers
pligg.com on May 10, 2010
PayPal Dispute…
PayPal Dispute – Does PayPal Favor Buyers Over Sellers?…
Heather on May 8, 2010
Hi Welly
That’s awful, but I agree with you: just refund and get rid of those bad eggs.
I also had an incident when selling mp3s and the person was saying even though the audio played perfectly on his computer it was “not downloadable” and therefore wanted a refund. I did not want to draw this out so I just refunded. Also gave him some other bonuses to keep him happy. (which he complained about as well… oh well…
thanks again
Heather
Welly on May 9, 2010
Lol. You gave him bonuses and he still complained? My oh my…
Albert Mikha on May 7, 2010
Welly,
Yes, dealing with some disputes is so annoying. I have experienced a few disputes which is actually the buyer didn’t pay attention how to receive the product after purchasing, although it’s clearly written in download page (one of disputes).
But as you mentioned above, we have to play as “Mr. Nice Guy” and treat the customer as King. Thank God after several conversation with the buyer, he finally understand and close the case as it have been resolved (and the best part is I still keep the money).
Thanks a lot for sharing your experience with Paypal.
Best Regards,
Albert Mikha