How to avoid PayPal chargebacks?

GudMe · Sep 24, 2018

Lime said: ↑

Thanks for the shoutout, and now I have read this topic I will post some thoughts.

The problem with the whole chargeback malarkey is that there are a lot of misconceptions regarding the types of reversal scams.

There are:

- genuine chargebacks by the parents of minors. (technically unauthorised but the validity of this differs).
- reversals made by the victims of credit card fraud. (genuine Unauthorised transaction dispute as whoever had their credit card information stolen has rightfully panicked and called their card company, resulting in a reversal of the transaction).
- paypal reversals in which the scammer tries to claim the service was incomplete (or not delivered).

Okay so leaving the first of the 3 aside as it could be valid or an excuse, I will focus on the 2nd, and the 3rd which are the most important to address.

So for the 2nd, when 'carders' (a term to categorise the fraudster who uses stolen credit cards) target gold sites, they usually do one of two things.

A) They either try to take as much as they can as quickly as possible before they owners of the stolen cards/paypals they are using notice their details are being used fraudulently.

B) They are what we will call in this instance a 'doctor of credit card fraud' and they use complex alts and methods to use several victim's cards over and over for a long period of time, repeatedly targeting gold sites with poor fraud prevention mechanisms.

Unfortunately due to the nature of RSGP and that it is not tracked by a delivery company, it is somewhat a safe haven for fraudsters. That being said, there is nothing we can do to stop fraud 100% of the time. Instead we should shift our focus on to how to prevent large amounts being stolen from us, and focus on increasing our customer base to make smaller amounts of profit from many more people, rather than larger profit margins from a niche target audience.

Many people use G2A as a 'yolo' kind of tool and they turn a blind eye to any risky customer as they feel comfortable with playing dumb to G2A and still getting reimbursed for any reversals. This is short term mentality and will harm them in the long run as while they are relying on G2A they are not developing their own systems, and when G2A eventually goes bust or kicks them off the package, then they are back at square one and risk their business crashing to the ground as they cannot offer the same promises to their customer base who will go elsewhere quicker than you can give them a coupon code.

The best thing to do is to just be patient and set strict limits for any payment method which can be reversed. Don't worry about fraud too much and just set very strict limits (even for those who provide ID etc), so you are not risking your entire capital. Feel free to sell bulk gold all day and night via cash in hand at a coffee shop (providing the bills aren't fake), or through crypto if that's your jazz.

Some example limits which you could use are:

- Yolo all deliveries of $20 or less. (so you get fresh customers through an easy experience).
- Once a returning customer spends more than $50 within a calendar month on your site, get them to verify their ID. Ideally you should safely store this so they don't have to do it again, as respecting your legitimate returning customers is very important.
- Set monthly max to something like $250 per person for paypal. If they want more gold they either have a staking problem or are playing very competitively, or are rich IRL and just want colourful partyhats and armour etc ingame. Therefore if they want more gold politely suggest they use a different payment option (try to direct them to something which cannot be reversed), and offer to guide them through the process, or give them links to safe websites or a youtube video which tell them how to.

As for your super long term customers and also those who you really do trust a lot, you can of course make exceptions. However, never get too carried away. I would just raise the monthly limit slightly for these people.

Again, try to target more people who you will get safe little purchases from, rather than a niche community of people who you aim to sell bulk to. To be totally honest, it is an eye opener to how many hundreds of thousands of people buy virtual currencies. There is a huge pool of people to target through marketing and ads beyond the niche markets of forum communities. This is refreshing news as it means there's tens of thousands of nice small and safe paypal transactions which won't get reversed.

In addition to the above point regarding the small transactions, if a scammer is reversing his own funds, he won't bother with small transactions as it risks damaging his paypal account via limitations. Also it is important to note that many credit card companies and banks charge a fee to chargeback, which in some cases is $25. So why would a scammer pay $25 to reverse $25-40 when he has to resell the gold for less than he bought it for, and also pay a fee to his card company, all while risking his paypal and card from limitations and/or future suspicion.

As for the 3rd situation, this has become increasingly rarer over the years, and it is usually the scammer who is very young or makes pennies just because he/she is that low. To be honest, if you have common sense and use the same precautions as I outlined above, then these kind of scams will be absolute minimal. I think the last time I had a scammer try something like this on one of my e-commerce sites was almost 2 years ago. Sometimes the amount is so small it's just more convenient to let them have the refund and just ban them from your site, and file a report if you wish.

Bonus:

If you have a website, then only do sales via live chat. Skype logs are often not considered valid evidence for paypal or card companies. In my experience with paypal it has totally depended on the agent, but in retrospect why even risk it. Just keep your sales to your site, and feel free to use skype, discord, email marketing and others in addition to your sales funnel. Just consider them additional channels of traffic similar to a google ad or banner ad.

The reason why you want to keep them on your live chat is that you can keep detailed documentation. In most cases live chat will record sensitive information which help identify the legitimacy of a user. Just to name a few such as, their IP, cookies, browser information, and email address.

Live chat exports combined with fraud prevention plugins on your website cart system can help greatly PREVENT fraud happening in the first place. Which is the point, you just need to prevent fraud as much as possible by limiting risky payment methods, and having good mechanisms in place. Rather than never starting with your business because you are yet to find the magical solution to win all chargebacks. Unfortunately that does not legitimately exist, as victims of credit card fraud are, and should be, entitled to their money back. And finally, as a vendor it should be an ethical obligation to practice what I have preached above to be a legitimate business owner and be considerate of the industry risks, rather than try to find loopholes like many are using by yolo selling billions of gp on G2A.

I hope this post helps. I have spent some time on it as I know others in the future may come across this topic as it is quite a recurring subject.
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This thread doesn't deserve this quality. Just replying to confirm that Lime hit the nail on the head here. There is reason to accept paypal (not just btc) and figiruing out just how to do that is almost like a complex art and skill in itself.

Voyager · Sep 24, 2018

So as a small time seller the TLR is don't use PP?

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How to avoid PayPal chargebacks?

GudMe Previously known as 3gud5me

Voyager My Discord: voyager#2063

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How to avoid PayPal chargebacks?

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GudMe Previously known as 3gud5me

Voyager My Discord: voyager#2063