Protecting yourself from chargebacks on big sales?

Diiz

Diiz

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I really hope this doesn't turn into another ethics debate, but I feel that this is a serious question that I hope can be addressed. There are a number of people who will be selling PS3s on eBay a couple of weeks from now. As is to be expected, there will probably be a large amount of fraud during that time on both sides of the spectrum. I use eBay fairly regularly, but I am a little nervous about this. I am very cautious of using Paypal for my PS3 auction since I have heard so many horror stories of chargeback nightmares. So how is this preventable? Is Paypal a bad idea completely, or is there a good way to go about it?

My best idea so far has been to only accept money orders or cashiers check, and if the buyer pays to have it overnighted, I will deduct that cost from their shipping. That way, the speed in which the PS3 is shipped is dependent on how fast the buyer gets me payment, and I can have the cash in hand before shipping. Any ideas or helpful suggestions?
 
I think your M/O idea is the best approach. IS there any way of sending payment though bank accounts? Or if you could have a phone discussion with the buyer you could setup a western union transfer, so you can ship the system as fast as possible. The buyer probably wouldn't go that route, but having a discussion on the phone can help build trust.
 
Yeah, I'm just amazed at how many people are probably going to be selling these PS3s at launch with "same day shipping" and Paypal as an accepted payment. Are they just living on the edge or do they know secrets that others don't? Any eBay/Paypal experts, please chyme in!
 
I recommend requiring immediate payment, and that only confirmed buyers can bid. Also, get a tracking number so you know it was delivered.

Edit: Require that the buyer have a Paypal account. I'm sure there are other things, and I would appreciate any tips as well, because I do not want to get screwed over by some idiot who wants a free PS3.
 
Craigslist warns of Money Order scams, so they can be faked and your bank will take them and then tell you later that they are taking it back, or something like that.
 
[quote name='Dr Mario Kart']Craigslist warns of Money Order scams, so they can be faked and your bank will take them and then tell you later that they are taking it back, or something like that.[/QUOTE]


Argh, well there goes that "fool proof" plan then. Hmmm...
 
Well you could require postal money orders, from the post office. So you can them there when you go to ship it off, they don't won't cash them they are probably fake.
 
Require users have a PayPal account, set a Buy It Now price, require they pay immediately when they buy, and require that they have a Confirmed address in PayPal. Beyond that, be sure you use a trackable shipping method (duh!)
 
I would hesitate on accepting USPS Money Orders, since they are commonly counterfeited. I received one of these when I was selling a laptop on eBay, but fortunately I caught it and confirmed it was fake with the post office.

Some telltale signs of scammers is wanting to use their own FedEx, etc. account # for shipping, and wanting pay you more than their winning bid/your asking price, usually requesting you to ship outside of the US. If you use PayPal, NEVER ship to an unconfirmed address, or you will not be protected against scams.

For big ticket items, I usually would insist on a Cashier's Check, since these seem to be the most secure form of payment (though I wouldn't be surprised if people have tried to counterfeit these as well, but at least you can verify their authenticity with the bank they come from).
 
The money order idea is pretty good, but you'll lose out on some money cause people want to be able to have it shipped tomorrow, not when the M/O gets to you. Your best bet is to accept paypal from confirmed paypal accounts only. Then, once paypal payment is received, IMMEDIATELY request a transfer out of paypal and into your bank account. That way, if they do a chargeback, there is no money in your paypal for them to take. It will send your paypal account into the negative, but you can abandon that account and start a new one. Hopefully no chargebacks will be issued, but hey... you never know. Luckily I've never had chargebacks issued against me, but then again, I've never sold anything worth more than $100 on ebay.
 
The suggestions made in this thread even still won't fully protect you.

1) Accept paypal only, and require immediate payment.

2) Set your paypal settings to reject all international payments and all unconfirmed address.

3) Since this item will be over $250, YOU MUST HAVE SIGNATURE CONFIRMATION. DELIVERY CONFIRMATION IS NOT GOOD ENOUGH AND YOU WILL LOSE ANY DISPUTE AUTOMATICALLY.

4) Make insurance mandatory and insure for full amount.

That combination will solve 99.99% of all problems

Dave
 
I have to ask the question which probably has a very obvious answer. How can a buyer do a chargeback on something like this? And does it pull directly from the account the buyer paid?
 
[quote name='MightySlacker']The suggestions made in this thread even still won't fully protect you.

1) Accept paypal only, and require immediate payment.

2) Set your paypal settings to reject all international payments and all unconfirmed address.

3) Since this item will be over $250, YOU MUST HAVE SIGNATURE CONFIRMATION. DELIVERY CONFIRMATION IS NOT GOOD ENOUGH AND YOU WILL LOSE ANY DISPUTE AUTOMATICALLY.

4) Make insurance mandatory and insure for full amount.

That combination will solve 99.99% of all problems

Dave[/QUOTE]

All very solid tips, and those actually will make me feel much better. Thank you! Does anyone know where to find those settings in Paypal?
 
I'm hoping everything goes smoothly when selling my PS3. (I might sell the preorder.) MightySlacker's tips look to be the best you can do.
 
Send that bitch Registered mail if possible. Included Date/Time of delivery, signature, return receipt, and insurance. If You're using Paypal, WITHDRAW THE FUNDS IMMEDIATELY BEFORE YOU SEND THE ITEM. It usually take about 2 business days for the funds to post to your bank account, so by the time the item is there, and a scammer ties to file a chargeback, the cash should be in your bank account which (if I remmeber correctly) paypal can't touch.

The best way to protect yourself is the method in which you ship. Don't cheap out on it.
 
Can anyone confirm or deny what RF said?

To date I've had all great buyers (mostly great, a few wierdos here and there, but no real issues to speak of), but I'd like to know what are the best ways to protect yourself from unscrupulous eBayers on any big items I may sell in future.
 
About the PayPal funds transfer? I've done that many times and it usually takes about 3-4 days to clear (though the funds are removed from your PP account immediately). I am not sure about the whole "nothing can be done if you have no money in your PP acct" issue, but I would imagine they can't just go invading your bank account or charging your credit card if your PP account lacks funds.
 
[quote name='Diiz']About the PayPal funds transfer? I've done that many times and it usually takes about 3-4 days to clear (though the funds are removed from your PP account immediately). I am not sure about the whole "nothing can be done if you have no money in your PP acct" issue, but I would imagine they can't just go invading your bank account or charging your credit card if your PP account lacks funds.[/quote]

No, but if a chargeback is indeed filed and you lose the dispute, paypal will put your account into collections (similar to a credit card company), and you will have to deal with them.

As far as the above advice, I think Dave has a pretty firm understanding of what to do.

Even if you do decide to go with the idea listed in my quote, just know that paypal doesn't simply "give up" if your account has no money and they have decided that you owe them that money; (i.e. if your buyer does a chargeback for any reason, and Paypal decides to honor it at your expense), they will find a way to get their money back. (in my experience anyway).

In short, I would take every single precaution necessary with the presumption that the buyer is going to try to defraud you, that way if the best case scenario occurs, you can rest easy; but if the worst happens, you are covered.

Good luck.

-V
 
[quote name='Veritas1204']No, but if a chargeback is indeed filed and you lose the dispute, paypal will put your account into collections (similar to a credit card company), and you will have to deal with them.[/quote]
Verily I thank you for the info. I was thinking something along these lines, but wanted to hear for fact.
 
[quote name='guinaevere']Verily I thank you for the info. I was thinking something along these lines, but wanted to hear for fact.[/quote]

NP. It's funny how many people are under the assumption that, as long as you get your money out of your paypal account, nothing else will happen.

For anyone still thinking that way, it helps to liken paypal to a formal bank account. IOW, if you withdraw all your money from the bank before a transaction can clear and your account draws a negative balance, you have to deal with collections, (or whatever candy coated name the bank gives it), until either your balence gets current, or you get sued. (which, btw, doesn't happen very often, but I digress).

Pretty much the same deal.

A little O/T and it might have been covered in another thread, but I noticed that ebay has made a few requirements of anyone wanting to sell a PS3/Wii preorder.

If I'm correct, I think they were: over 50 feedback, must require paypal only as a payment method, must have an acutal pic of the preorder reciept in the auction, limited fixed pricing rules, etc. (that's all I saw, there may be more).

That should definately at least cut down the scams, and make it a little more evenhanded.

Again, if that was posted somewhere else, I apoligize.
 
[quote name='Diiz']All very solid tips, and those actually will make me feel much better. Thank you! Does anyone know where to find those settings in Paypal?[/QUOTE]

Log into your PayPal account. Click the Profile tab. Click on Payment Receiving Preferences. You can block unconfirmed addys and international payments from there

Dave
 
Something else to consider is having 2 bank accounts. I have a bank account just for Paypal and as soon as the money from Paypal goes into that account, I transfer it into another account that is not linked to the Paypal account. I don't know if it would help at all but I figure it can't hurt.
 
[quote name='Veritas1204']NP. It's funny how many people are under the assumption that, as long as you get your money out of your paypal account, nothing else will happen.

[/QUOTE]

I'm onyl going off experience, but mine was disputed by the buyer, and not a chargeback. I withdrew the money from PAyPAl, they froze the account, and I still got to keep the cash. It was sorted out when I sent them prrof that I -did- mail it out, and it was all good from there.
 
If you're really worried about being out a lot of money I suggest accepting only Money Orders from the post office. The post office with cash the MOs on the spot so you don't have to worry about the MO being a fake a month later. Although I'm sure the post office has maximum MO value.
 
If you withdraw the money from your Paypal account immediately, there is nothing the buyer or Paypal can/will do to recover it.

When a buyer files a dispute and you have no money in your Paypal account, the buyer gets nothing and you lose nothing. Your Paypal account gets suspended due to a negative balance until you deposit the required amount of money, but otherwise, nothing happens. Paypal will not dip into your credit card or bank account to recover the funds. They will not send you to collections, as they aren't owed any money.

This is all from personal experience and the "facts". If someone has personal experience with being sent to collections by Paypal, I would love to read about it.

I have also had experience with filing a credit card chargeback against Paypal (bought $800 auction and never received item). Paypal didn't even bother to respond to the complaint from American Express, so I was awarded the chargeback by default after 30 days.
 
[quote name='Zing']If you withdraw the money from your Paypal account immediately, there is nothing the buyer or Paypal can/will do to recover it.

When a buyer files a dispute and you have no money in your Paypal account, the buyer gets nothing and you lose nothing. Your Paypal account gets suspended due to a negative balance until you deposit the required amount of money, but otherwise, nothing happens. Paypal will not dip into your credit card or bank account to recover the funds. They will not send you to collections, as they aren't owed any money.

This is all from personal experience and the "facts". If someone has personal experience with being sent to collections by Paypal, I would love to read about it.

I have also had experience with filing a credit card chargeback against Paypal (bought $800 auction and never received item). Paypal didn't even bother to respond to the complaint from American Express, so I was awarded the chargeback by default after 30 days.[/quote]


I'm sorry, but you're wrong here.

If you sell an item, and for any reason, a buyer files a SUCCESSFUL chargeback, (note, emphasis on the chargeback being successful) and you moved the money, leaving your paypal account at 0, paypal doesn't simply say "gee, well I guess he got his money out, oh well" and move on; rather, they push your account into the negative and freeze any and all incoming payments until the difference is paid.

You say you know this by personal experience, let me ask you: did you personally sell an item, recieve a dispute, lose said dispute, move the money out of your account before the dispute occured, have your account go negative, and paypal never responded? Or, was your personal experience quote concerning the $800 you spoke of later in your post?

Either way, the bottom line is this: if you sell an item and receive a successful chargeback against your account, paypal will freeze your account until the account is brought current.

As for the collections issue, yes paypal has been known to go after those who leave their accounts negative for long periods of time, but no, they by no means can dip into your bank or credit card accounts to obtain their moneys owed. (nor did I ever imply that they could, BTW).

In short, paypal is not going to simply write off a negative account (in which they have to pay a chargeback on your behalf to a buyer) because you were crafty enough to remove the money. One way or another, if they had to pay a chargeback to a buyer on your behalf, they'll get their money back from you.
 
[quote name='MightySlacker']Log into your PayPal account. Click the Profile tab. Click on Payment Receiving Preferences. You can block unconfirmed addys and international payments from there

Dave[/QUOTE]

Thank you sir.
 
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