Paypal - How to secure profits?

Promethium91 · Jan 19, 2013

I've recently been seeing increasing profit in my e-book, and I'm getting concerned about chargebacks ever since it happened to me for the first time last December.

I was chargedback by a user who purchased my e-book saying it was an Unauthorized Transaction, and the ten dollars were removed from my account. After a lengthy process with Paypal they began disputing on my behalf with the credit card company since it was for online goods which aren't covered, but they neglected to mention the additional $20 FUCKING FEE for disputing on my behalf.

Paypal customer support told me that the $20 fee would be returned if we won the case, but it's been over a month and I'm still waiting for the money to be returned, so basically $30 is missing from my account because of a chargeback.

I've had an influx of new buyers and I'm concerned that I'm going to have another chargeback, and considering it's only $10 it's not worth locking up $30 for a few months.

The only money in my account is from my e-book, so it doesn't take much to give me a negative balance and fuck everything up. What do I do to make sure I don't lose money and can continue to use my paypal? Is there any way to protect my money? If I don't accept paypal I'll lose most of my customers because of the convenience.

Nick · Jan 19, 2013

What percentage of your payments clear past 60 days? If it's less than 3.5% dispute, don't worry about it. You can't secure all payments. Everyone (including Grave, R2P, etc has had the $20 fee for a lost chargeback even if they did everything to prevent it. At least you're not losing any finite goods.

If it's greater than 5%, you can start looking into setting up a secure website for checkout. Your pre-paypal checkout could have IP verification measures. All of this comes at a price though (hosting, coding, IP software, time)...

ohcfolse · Jan 20, 2013

Start by only dealing with verified PayPal users, make sure the person's PayPal name matches their skype, etc. if you are using it.

If all you are selling is the same product (e.g. your e-book) consider setting up some sort of merchant account/invoicing system and increasing the price to compensate for fees.

Promethium91 · Jan 20, 2013

A lot of my sales are to newer Sythe members and I've only had a problem with one of them. I just have a buy now button and send the guide out when I receive payment from someone. I occasionally don't even know the name of the Sythe user that purchased it. I think I'd begin to lose sales if I started going through a process of checking out every buyer and I might risk alienating the ones that are newer.

It seems like the only course of action is to accept chargebacks and hope I still make a profit, but the problem is the more untrustworthy people that have my book, the more likely it is to be given out somewhere.