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Protect Yourself Against Chargebacks: The Guide

by Sean Mal

in Payments, Selling

Chargeback Protection

PayPal payments have to be accepted on eBay. Not that you don’t have any other option but what are the options? You must accept an online payment method. The approved online payments on eBay are PayPal, MoneyBookers, PayMate, and ProPay (two of them abbreviate to PP, ugh…disgusting! 😉 ).
PayPal is the most popular one. Once, I tried to open an account with one of the 3 others (I don’t remember which) and they required $3000 deposit to start with. Not to mention they could increase it over time.

Anyway, if you can find a seller not accepting PayPal on eBay, you found a rare thing. If you’re an eBay seller, you’re very likely to accept PayPal. Because of this huge popularity, PayPal is accepted by many sellers on other eCommerce websites. If you sell on eBay alternatives like ebid.net or ecrater.com, etc. and you accept PayPal, make sure you do this: Never EVER accept a payment with unconfirmed address!

What’s wrong with payments with unconfirmed addresses is that you will be only partially covered by PayPal’s Seller Protection Policy if the transaction is not an eBay transaction. Typically, when the transaction is non-eBay and the address is unconfirmed, the seller would be partially eligible for Seller Protection Policy and that’s only for Item Not Received complaints. Unauthorized Payment complaints won’t be covered unless you have a confirmed address. That means if the buyer files chargeback against you for unauthorized payment, you will lose automatically and you can do NOTHING about it!

Accepting payments with unconfirmed addresses should be fine for eBay purchases but you need to make sure PayPal says you’re fully covered by Seller Protection Policy in both the payment email AND in the transaction details in PayPal’s website. If there’s any discrepancy, call them to confirm.

Of course you would need to explain clearly in your terms and/or in the listing that only confirmed addresses are acceptable and give the potential customer clear understanding on what would happen if they submit payment with unconfirmed address. You would generally have to refund the money and bite the 30 Cents refund fee that PayPal charges you.

I give advice based on my own experience and I learned some of my lessons the hard way. This is one of them. Once, I sold a tablet on ebid.net and didn’t notice the address was unconfirmed. Yup, you guessed it! Buyer filed chargeback saying the transaction wasn’t authorized. It didn’t matter I proved the item was delivered and signed for; I lost the case with no compensation.

It would be a terrible mistake to think: “oh, I’ve always accepted PayPal payments with unconfirmed addresses and nothing bad has happened to me so I’ll keep doing it.” You never know when a loathsome buyer hits you. However, if you still think it’s fine to do that, why don’t you let me know your reason in the comments below? If you think otherwise, let me know too.

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{ 8 comments… read them below or add one }

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global June 30, 2017

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dewa August 31, 2017

Chargebacks are not always filed with good moral. It is important to be prepared for them. Good information on the topic here. Thanks!

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