Credit card chargeback fraud - what to do when it strikes you?

[dbcs.computer]

Hi all,

Several years as a seller on ebay and recently experienced my first CC chargeback on paypal.

A little bit about me: I own a computer parts and computer build home-based business. 60% of my business is services, the other 40% is sales. Most of these sales are new parts, which I get from my wholesale suppliers.

So, back on Dec 2, 2013, this newly registered buyer purchases 2 identical brand-new motherboards from my ebay store, paid with paypal, shipped to Ontario. Shipped next day as usual. He receives the order on Dec 9 (according to CP's tracking) and contacts me on Dec 18 stating "one of the mother board does not work". I asked him a few questions to try and identify the issue and he describes me what looks to be a hardware issue with the board.

On Dec 22, I send him return information, that always include return guidelines, which state, amongst other things, that full products, accessories and documentation has to be returned, warranty returns cover only hardware defects, etc.

On Jan 3, I receive the order back (1 of the 2 mobos, if you follow 🙂 the other one being working properly). As always when I get an order returned (I've been burned once before), I take a video of me breaking the shipping seal and opening the packaging. Good call I did it, since I found a board physically altered (5 bent pins on the socket) and accessories missing (sata cables, crossfire bridge, socket protector). I email him back stating this info and asking him if he wants to get a quote on product replacement/repair or if he wants to have the board sent back to him. He answers the cables were never there (which I find hard to believe since he got two identical boards and never stated anything missing until I mentioned it) and he never damaged the board (which was protected by a socket protector when it was shipped to him). That's where the threats begin ("I do not want to go ugly with ebay dispute or anythig else."). I co ntinue to answer politely to try and explain him warranty requirements and policies, as well as asking him how come he never mentioned the so-called missing accessories and didn't noticed FIVE bent pins on the socket. He answers the same day "Ok, as your wish, we opened the dispute and let Paypal and ebay to do the rest.", and I didn't hear back from him. No, he didn't open a case with ebay/paypal or anything. So I assume these were empty threats, he knew he did something wrong and took a chance - seeing it wouldn't work, he gave up. How wrong I was.

On Apr 11 (4 months+ after the payment was made, and 3 months after his last email), I am being notified by paypal of a credit card chargeback on this transaction ($218.37, mind you), added to a $20 or so processing fee, paypal stating "we're fighting this on your behalf" (yeah, right). I'm following the guidelines, provided a 2 pages document explaining the whole history of this and a full email trail of our communications. I also indicate I can provide a video of me opening the package (paypal only allows doc and pdf files to be sent, maybe images too, but not videos).

On May 30, after not hearing anything since I sent that file with my comments and my offer to provide a video, I receive an email from paypal stating "The credit card issuer decided the chargeback in the buyer's favor as the buyer met the card issuer's requirements." I am being advised that a total of $129.18 has been deducted from my account (better than the initial $238.37, but still) and that the case is closed. I was on vacation when it happens, so I'm contemplating my options now I'm back.

So there we go:

- I feel like it could help to talk directly to that credit card company. Heck, I don't even know if paypal provided them with my word doc. And of course, I have a video proving my facts, are you not interested in watching it?? However, how can I get that credit card company info? Can I force paypal on provide it to me?

- I could send that buyer an invoice with the total I was charged back, added to processing fees. And advise him that should he fails to pay his debt, he'd be accountable for any court/lawyer fees involved. Now would I have any chance on winning, should it go that far? I can prove I got it new from my supplier, but I can imagine a judge asking me to prove I sent it the same way to the customer. Well, I have thousands of happy customers, but would it be sufficient? That guy hasn't purchased anything else on ebay since that - he has only one positive fb - mine. With a follow-up telling about the CC chargeback. He didn't leave me any feedback.

Now I know some will say "not worth your time" or "cost to run a business". Well I'm sorry, but I don't accept it. I'm a honest seller with fair practices, I try to please my buyers as much as possible (as long as it's fair to me as well, obviously), so I'm not decided to let this go. It's not really about the amount of money I lost, it's about being a thief and knowing you can rob someone and get away with it.

Any good advise would be appreciated.

Thanks,

[pocomocomputing]

The video is worthless as it only shows what you received back and not what you sent. There is a chance you sent it that way. Again your word against theirs.

If you do get a refund from PayPal, it is because they are tired of your complaints and the time they spend on this kind of issue is more expensive than paying you out. So while you could get the money back, the buyer still goes unpunished.

[pjcdn2005]

However, how can I get that credit card company info? Can I force paypal on provide it to me?

No, you can't force Paypal to give it to you. When you use paypal you agree to the user agreement which

allows paypal to investigate any chargebacks.

Fighting an unauthorized use chargeback is easy if you have proof of shipping but unfortunately, fighting a SNAD chargeback is really difficult. As Poco said, the video doesn't really prove anything in paypal's eyes.

I honestly don't have any 'good' advice. I do understand how you feel and your frustration but there are always a percentage of dishonest people that you have to deal with in retail whether you are selling online or in a brick or mortar store. Retailers expect a certain amount of loss because of people like that and have to decide whether or not it is worthwhile fighting someone about it.  

You could consider going to small claims court but I don't know how that works since each of you is in a different province.

[mdf_jersey]

Personally I would  chalk this up as a loss. The sooner you let go the sooner you will get over it.

Pay Pal seems to have a mandate to side with the purchasers. Unless it is black and white, you dont have a chance with this and even in those cases it still may go against you.

Your right to say "yeah right" on the WE WILL BE WORKING ON YOUR BEHALF statement from Pay Pal. They seem to have set responses that they probably have in front of them when someone tries to reason with them. As far as investigations go, I doubt they go any farther than the actual complaint. I doubt they really look at the facts. I have had my own experience with them recently. Its no picnic.

I think what is worse than being handled like this, is not having the option to use another service other than Pay Pal. If a company dosent treat me correctly I should be able to go some where else, but no, not with Ebay.

[melissasminis]

So you all just accept that this is wrong, and don't bother to stand up, just accept it? This is why this stuff happens, because people sit around and take it. People are doing chargebacks on creditcards illegitimately. This is a fact. Along with the other scams that ebay and paypal pull, this is just one of the many sad things that happen when doing business with ebay and paypal when credit cards are involved. Ebay and paypal lie to people, tell you it's a safe place to do business, when in fact, it's the opposite sometimes. When I've called ebay or paypal, they make up stories and rules, don't understand anything you're saying, or just don't want to bother. Very unprofessional. I have had paypal lie to me and make up their own story in a dispute with a buyer. Paypal has breaken their own rules many times and don't care. They will do anything to get out of the situation, and if your money is involved, you will lose it. I know for a fact ebay and paypal do not work by their own policies they preach, they bend them for their own convenience. This is always a concern when doing business online, but it doesn't mean you have to be another victim. Stand up for youself, this is definately not right!

[dbcs.computer]

Exactly my thought. Everyone here except Melissa is basically saying "that's the cost to run a business". Well as I mentioned in my initial message, I know (and knew) about these risks. I should probably consider myself lucky that hasn't happened to me before. However, I feel as a seller, I owe to myself and to fellow sellers to try my best to straighten things right. If I don't, I have the feeling I'm giving the message to that guy that it's perfectly acceptable to rip off a seller. Next thing you know, he'll do the same to you, another seller. Just because he can. And he'll mention it to his friends and...you see my point? You let one guy do that kind of cr**, more sellers will get screwed up. Of course, chances to get my money back are extremely slight, actually I don't believe I will. Again, I can financially lose $120 or so, that won't hurt my business much. But that guy (who happens to be a student, he can easily be found online) needs to understand he did something wrong (if he hasn't understood it yet) and there's a risk for him of financial consequences to steal goods.

I'll send him a new invoice tonight by email, including the chargeback amount, his CC company fee, and a $35 processing fee for good measure. Email and invoice include references to previous invoice and indications of late payment fees and possible court costs to be applied as well should he not pay within 2 weeks. Funny thing is, his email address is linked to his university. Easier to track down than a random gmail/yahoo/hotmail account. If he ignores that email, I'm thinking of contacting someone at his school - and ultimately, mailing that invoice to his physical address. It might not make him react much (aka answer back), but it will for sure make him think about it.

[maximus7001]

You are wasting your time. Nothing will ever come of this matter. University is over for the summer and many students were renting rooms situated around the university and are not from there. When and if they are back for the new school year they may or may not be staying at the same address.

Just out of curiosity, what city did it happen in?

[femmefan1946]

I think what is worse than being handled like this, is not having the option to use another service other than Pay Pal. If a company dosent treat me correctly I should be able to go some where else, but no, not with Ebay.

Actually you can use other services.

Perhaps you already have a merchant account with Moneris or another company. This would be useful in your shop and you can accept credit cards directly on eBay. Our B&M does.

That being said, most of our online customers still prefer to use Paypal. We don't keep a record of cc #s and I guess they feel more comfortable with the anonymizer. Even though we have been in business for over 35 years.

You could look into Square, which is a Paypal like service. Not sure how it would work for an online business, I barely understand it as a trade show service. But it seems pretty simple if you are not a technodolt like me.

The costs for these services (including the merchant account) are pretty much the same as PP. But the merchant account does have the benefit of working directly with your Canadian bank account, including the US dollar one.

But the basic problem is trust.

Customers trust Paypal. They don't trust other services. They don't trust merchants.

So not offering Paypal is possible. However, you may find you have fewer customers.

[pjcdn2005]

Please let us know how things works out.

Even if you had a merchant account and could directly deal with the credit card company I'm not sure if that would make a difference. It would still be a he said/she said scenario.

I'm curious if anyone who accepts credit cards has ever had to fight a cc chargeback and what the result was.