

Tell HN: Another PayPal Farce - Refunds my money to customer - ozres1

I run an Australian Calling Card website on the side which sells roughly A$800 in cards per month. I've never had an issue previously with PayPal up until now but I've read some shockers about PayPal which concerns me (http://notch.tumblr.com/post/1096322756/working-on-a-friday-update-crying-over-paypal).<p>I received an email from Paypal over a week ago which states that they've decided to open an investigation of their own accord into a transaction of mine and that they require more information from me. I explained the transaction and that the buyer was furnished with a calling card code which they can use to place calls overseas in exchange for the payment made.<p>Today I receive the outcome of PayPal's decision. They decide to reverse the transaction and refund the customer. They provide no reasons for the decision they've made (which seems to be pretty standard for them based on what I've read).<p>So now the money's gone and I can't resell the calling card code either. Great.<p>So I write a complaint to PayPal:<p>-------------------------------------------------------------------------------------------------------------<p>To: PAYPAL<p>You have decided to reverse the transaction on this case:<p>Inquiry by PayPal - Case ID: PP-001-<i></i><i></i>*<p>for transaction ID: 6VB<i></i><i></i><p>Can you please explain your decision?<p>I explained previously to you when the investigation was opened that in exchange for the payment the buyer made, the buyer was sent a Calling Card Code.<p>This same buyer has made the same purchase on two previous occasions over the course of a year as you can see from the following transaction codes:<p>8TK6<i></i><i></i>
9PD3<i></i><i></i><p>Yet you have decided for no apparent reason to investigate and reverse the third transaction.<p>You have arbitrarily opened an investigation into a regular transaction and have created for me an unnecessary cost of time, effort and money. Furthermore, you have damaged my reputation to a repeat customer of mine.<p>I request that you reconsider the said case and explain your decision.<p>Richard<p>-------------------------------------------------------------------------------------------------------------<p>I emailed the buyer as well and he's decided to pay again for the previous transaction ;)<p>The way PayPal treats its customers baffles me sometimes. If it has a legitimate reason to open an investigation and concludes that the transaction is wrong/fraudulent or whatever, then it should state its reasons rather than leave its customers in the dark.
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reidbradford
When something like this happens with Paypal, you're lucky when you get out
alive. Your business is still intact, your Paypal account is not disabled and
the customer has payed again for the previous transaction. Why persist with
this? If your goal is to try to change Paypal, your business can't have much
going on - because there should be lots more important stuff that you need to
deal with. Be grateful and move on.

~~~
cobrabyte
I agree. As someone who has had their business PayPal account frozen and
eventually (permanently) disabled, I can tell you that you'll get no response
from them that will give you closure.

PayPal is a silly, silly business. You only stand to drive up your blood
pressure if you go back-and-forth with them. You'll send passionate pleas for
an explanation, only to be met with robotic responses.

Frustrating does not begin to describe it.

Move on and find another processor if you want closure.

------
phaus
PayPal has turned into just another mechanism for online fraud. Basically the
way it works in the past few years is a customer can buy whatever they want
from you using a credit card linked to their PayPal account. As soon as they
get the item, they cancel the transaction and tell their credit card company
that their card was used in a fraudulent manner without their knowledge. The
credit card company then seizes the funds and PayPal is left in a situation
where they can either eat the cost of the item and give you the money, or
their "investigator" can find you at fault and force you to eat the loss.
Because they don't have the power to challenge the credit card companies, they
side with the customer almost 100 percent of the time and then stick you with
the bill.

With non-tangible items, such as calling card codes, video game subscriptions,
and digital items, there is pretty much nothing you can do to get your money.
PayPal has act to like it has investigated the situation fairly, so they tell
you that they sided with the customer no matter what evidence you have
presented them with.

Unfortunately, this type of behavior is largely why eBay is in decline. My
parents ran an online antique business in their spare time but they were
forced to shut it down because it no longer felt safe. Personally, I've been
on both sides of a PayPal dispute. When I almost lost a few hundred dollars
selling a non-tangible item(luckily the item was recovered), the PayPal
customer support rep told me that it didn't really matter what evidence I
furnished and that if I wanted to sell something similar in the future, that I
should try to deal locally because being scammed on PayPal has become an
epidemic.

------
citricsquid
DO NOT SEND AN EMAIL.

Seriously, don't, you're wasting your time. Phone them, their phone support is
fantastic, their email support is close to non-existent.

(ps: the issue Notch had with Paypal is misleading, they weren't in the wrong)

~~~
dholowiski
This is absolutely true. I had a paypal issue recently and got immediate,
useful help when I called, before they had even looked at the case I submitted
online. Call!

------
westiseast
I had pretty much exactly the same. A friend bought one of my products via my
site (tea) and I gave it to him personally the same day. Later Paypal reversed
the payment with zero explanation. I didn't receive a single explanation from
them, or even a response to my emails. They have a practical monopoly it
seems, and dont seem to care an ounce about customer service for merchants.
Let's all just switch to Stripe when they expand out of the USA!!

~~~
MediaBehavior
1000+ HN points can't be all wrong. From 2 days ago:
<http://news.ycombinator.com/item?id=3053883>

~~~
dholowiski
Sadly, if you're not in the USA this is of no use, for now, until they expand
into other countries. I have a product launch soon and I'm seriously
considering just extending the free trial period until they launch in Canada.

------
c16
I've not had any issues up to date however I've heard many other horror
stories, and so I'm sitting and waiting for the worst to come. Till that day
comes, I can't say I've had any problems.

I saw this link in my twitter feed (<https://stripe.com/>) and while it's not
paypal, it seems relatively easy to integrate, though if I were a customer I'd
probably prefer PayPal since it's much better known and there's the added
bonus of not having to give your card details.

Since your client has paid you back the money, I'd let it drop so long as it
doesn't affect your future payments and clients.

Good luck getting it all resolved.

~~~
ozres1
Thanks. Unfortunately stripe is currently restricted to US customers

~~~
c16
Which is the reason why I'm not using it... yet!

------
shinratdr
I always try to play devil's advocate for PayPal. I think they process a
shitload of transactions every day and end up getting a lot of flak for simply
trying to cover their ass a little.

Imagine this scenario. You are a payment processor. A new client appears out
of nowhere, and is processing transactions for $20 from credit cards all over
the world all throughout the night, hours after creating his account. A
percentage of these transactions fail and are placed multiple times. In a
matter of days, the client has accumulated $600,000 and you have no idea what
he's doing other than trusting the information he willfully provided in his
merchant info.

What do you do? Do cash out 600k the moment this client requests it without
performing any due diligence? Or do you freeze the funds, make him call in and
verify, and get him his money within a week or two?

The business PayPal is in is inherently risky. Whenever I see some surprised
post about how PayPal freezed your massive pile of rapidly accumulated funds
instead of just handing it to you and assuming that they won't be dealing with
thousands and thousands of scammed customers, I can't help but roll my eyes.

Have a little perspective, people.

This is obviously more about notch's situation and less about yours. Yours is
just a simple misunderstanding and a less than adequate support system. Once
again, thousands and thousands of transactions a day. Some aren't going to go
perfectly.

If you are about to cite Stripe, well:

> Stripe is ten people.

Stripe is nice, but Stripe is ten people. They have nowhere close to the scale
that PayPal has to deal with. If they reach PayPal's size and still remain
developer friendly and don't have issues like this, I would be truly amazed.

------
ozres1
UPDATE: For those of you that are interested, here is PayPal's reply below

\---------------------------------------------------------------------------------------------------

Dear Richard,

Thank you for contacting PayPal.

Our Seller Protection protects you from claims, chargebacks or reversals that
are a result of unauthorized purchases or items your buyer didn’t receive.
With PayPal’s Seller Protection, you are protected for the full amount of all
eligible transactions.

If a transaction is eligible for seller protection, it will be marked as
eligible or partially eligible on the ‘Transaction Details’ page. If it is
marked as partially eligible, you are only protected for items a buyer didn’t
receive. Transactions of $250.00 or more requires the customer signs for the
merchandise.

Here are some additional requirements you need to meet for seller protection:

    
    
       * Ship the item to the address on the ‘Transaction Details Page.’
       * The goods must be physical items that can be posted.
       * Provide proof of delivery (we require online tracking to confirm

delivery). * Respond to our requests for documentation and other information.

To learn more about PayPal’s Seller Protection Policy, click ‘Legal
Agreements’ at the bottom of any PayPal page, and then click ‘PayPal User
Agreement.’

Sincerely,

PayPal Account Review Department PayPal, an eBay Company

Copyright© 2011 PayPal Inc. All rights reserved.

Consumer advisory: PayPal Pte Ltd, the Holder of the PayPal™ payment service
stored value facility, does not require the approval of the Monetary Authority
of Singapore. Consumers (users) are advised to read the terms and conditions
carefully.

------
0x12
> I emailed the buyer as well and he's decided to pay again for the previous
> transaction ;)

That alone should be enough for PayPal to issue apologies all around. Good
luck with that.

------
brackin
We have lots of issues with Paypal, I run a digital deals network for
designers, coders, etc and our paypal account is constantly having issues.
Being told it'll take 10 days before we can send payments because there was an
influx in payments to us. When we run a deal there's an influx in payments
because obviously they're daily deals.

This causes a list of problems but we're going to eventually switch to Stripe
or another option.

------
matthewking
It would be interesting to see how PayPal justify this given that the customer
paid you again after they reversed it, not that id count on ever getting an
answer out of them.

I don't think I've ever seen such terrible customer service and reputation
management, it's like they're trying to scare people away.

~~~
ozres1
My thoughts exactly mate

------
ig1
It seems pretty weird, but I'd recommend you'd move off paypal. Paypal is
designed for low risk businesses, you're selling something which is "cash-
like" which automatically puts you into a high risk category. And Paypal fraud
detection systems give you far less leeway if you're considered to be high-
risk.

~~~
ozres1
if you suggest a good alternative that's available in Australia, i'm all ears

~~~
ig1
If you're doing a reasonably volume of sales I'd recommend just using a
merchant account provider (probably your best bet is asking around local
startups to see who they use). You'll pay a higher premium due to your risk
factors, but you'll get better service.

------
rs
This can happen from time to time, and I think most of the time they just end
up giving the customers a refund.

From my personal experience, its better to just ask Paypal to refund the money
and ask the customer to re-pay. Its a bit annoying, and you may get some
disgruntled custoemrs, but a whole lot easier than going through the pain of
asking Paypal for an explanation.

------
LUTOPiA
PayPal should at least bother to investigate thoroughly before meddling with
someone's livelihood. They pass judgement based on baseless assumptions and
have no empathy for the damage they are causing.

If they can't handle the load, then they should just pass up the information
to law enforcement and let them do the investigating and prosecuting of crimes
made using their service.

Either one has to happen, but the current way they do business is damaging
alot of lives. Something's got to give.

By the way, there is a Class Action Lawsuit being mounted against them for
their unethical practices, like withholding funds from users or simply making
unauthorized charges to the bank accounts of users and abusing their privilege
of access.

Here's the link: <http://www.freedweiss.com/PayPal-Holding-Money.shtml>

Also, i called the District Attorney's office of Santa Clara County and they
said that they get alot of people filling small claims suits against PayPal.

This is what happens when a company gets too big, empathy and respect for
customers gets flushed down the sink :/

