Fruadulant chargeback for virtual items

[Stinger910]

I sell virtual goods in an online video game with no way to trace if they got items etc. I sold an individual $264 worth of virtual items in said video game. One month later he charges it back on Paypal saying he did not authorize the payment. For whatever reason Paypal ruled in his favor. I made him send me the $ via family and friends because 99% of the time you are not able to chargeback that way. I have a plethora of pictures kind of proving it is him etc. I think I am needing to take him to small claims court in his state to get my money back.

[kernowlass]

@Stinger910

Its against Paypal rules to accept a family / friends payment for selling goods and can lead to your Paypal account being limited.
A buyer would not be able to open a Paypal dispute for 'non-receipt' OR 'not as described' as they would have no Paypal buyer protection.

However they can still open an 'unauthorised transaction' OR do a 'chargeback' (if they funded that Paypal payment via their credit card) and you would probably lose as you would have no Paypal seller protection because you accepted payment that way.

Your lucky paypal have not limited your paypal account.....yet.

[Stinger910]

Thank you for getting back to me in such a speed manner! I know understand I should not use family and friends for my transactions and going forward will not continue to do that. The only reason I asked my customers to send via family and friends is because it was (I thought) impossible to chargeback. People have tried charging me back in the past and  Paypal has ALWAYS ruled in my favor. Why is this time different? I am ample real world proof that this person did need authorize said payment and they are lying to get their virtual item + their money back. What are my next steps to getting my money back?

[kernowlass]

@Stinger910

If they sent using the goods / services option and tried to chargeback then you would be covered by paypals seller protection policy.

However by using friends /family they can always chargeback and should always win as its the credit card company that make the decision on behalf of their client and not paypal.

Unless of course you meant it was filed as an unauthorised transaction and NOT a chargeback?

If that was the case then you may well win as paypal will check IP addresses / devices of the 'buyer' and if they show that they made the transaction then of course it would be denied and you would win.

As for getting your funds back again then nothing paypal can do for you unfortunately, if you have something like the small claims court in your country then that may be an option but if it was genuinely unable to be proved it wasn't unauthorised then you may lose again. 

[Stinger910]

But I have also gotten charged back when accepting payment via goods and services and Paypal has ruled in their favor as well. I have a case in my history from Jan 8th, and on Jan16th they chargedback and got their money back.

Yes, I am referring to a chargeback via unauthorized transaction. I have reached out to Paypal live chat but there was a fraction as helpful as you. Will contact them again when they open.

[kernowlass]

@Stinger910

Well normally a chargeback would give you seller protection UNLESS you were selling digital / virtual goods when you have 0 seller protection so yes in your case you would lose either way.