Getting too many chargebacks, suspension threatened

[bobbytal]

Received an email from PayPal today ordering us to lower the rate of Reversals from my account owing to Claims of unauthorised payments by my buyers to less than 1% of your total received payments over the next 45 days. If after 45 days my account has not achieved this target, then my eligibility for PayPal Seller Protection will be suspended for a period of 90 days.

Whilst I have been reassured the email was automated, this email warning has obviously unsettled me, and I am concerned about the future of my relationship with PayPal, and how this effects my business.

About me:

• I am one of the largest sellers of Apple iPhones on eBay (UK), particularly the latest iPhone 7. In eBay best match searches we are in the top 5 in the UK.

• I have been with PayPal over 11 years
• I am a PayPal Top Customer
• I have an immaculate seller record, both with PayPal and eBay
• Every time I ring PayPal to discuss an issue, I am complimented by PayPal saying what an outstanding seller account I have
• I turnover tens of thousands of pounds a month with PayPal - I have done for years
• I therefore pay (and have paid) a significant amount in PayPal seller fees
• I also spend just as much with PayPal on stock purchases, generating lots in PayPal fees (for PayPal, from the sellers I buy from)
• I am on the Merchant's Level discount with PayPal which reflects how much business I do with PayPal
• I am very much "Mr PayPal"!
• I am fully compliant with PayPal's rules and regulations, as I have always been for the past 11 years

Sales have been great the last 6 months, but due to the nature of what we sell, i.e. the most popular, sought after, and expensive consumer good in the world, we also get fruaudlent attention. In particular unauthorised payment claims/chargebacks. 

The number of chargebacks and claims for unauthorised payments we get is actually extremely low, even more so when you consider the types of items we do (explained below).

Despite our efforts, chargebacks and claims (for unauthorised payments) are something we can do very little to control. Generally once a payment is received, and we are told on every single sale "OK to send item" by PayPal on every payment email we receive, we must send the item. 

These chargebacks/claims for unauthorised payments can often be opened by buyers several months after we are told by PayPal to ship and item. I rigorously follow PayPal's Seller Protection guidelines as to where, how, and when to ship an item. If a chargeback (for an unauthorised payment) is opened against a payment, we comply fully with the requirements of the case, as we are asked by PayPal.

Even still, I feel the number of chargebacks I have, whilst higher than some sellers, is still extremely low given the nature of what type of items we sell.

The reason my chargeback rate is low (and is extremely low given the nature of the items that we sell) is because we have an eBay account that is very (very) high level, and I am told the fraudsters stay away from the experienced sellers like us - we also secure our eBay seller account to prevent purchased from high risk countries and buyers etc, as well as take stringent steps to ensure we are posting to the correct PayPal Confirmed addresses etc, prior to dispatching an item.

Just in this past 24 hours for example, we will be refunding PayPal transaction because it was from a fraudulent buyer's account. WE know this because WE checked the buyer's shipping address, and it was the same postal address that was used for a chargeback last month. Again note it was US who realised this, NOT PayPal, and prevented this one from becoming another chargeback for PayPal to deal with.

As a result of being vigilant like this, and our selling account being outstanding, our chargeback rate is extremely low, again given again the context of what type of items we sell (the most sought after and expensive consumer electronic goods in the world).

Despite this some chargebacks do inevitably slip through the net, we rely on the systems in place on PayPal and eBay to prevent such sales from occurring in the first place, and preventing chargebacks from happening by not allowing such buyers to buy from us at all. We hope the thousands of pounds in eBay and PayPal fees we pay, and have paid over the past 11 years, contributes to these prevention systems.

Any advice here? Will PayPal take into account the type of goods I sell? And reset their expectations re % of chargeback claims for unauthorised purchases I should have?

Obiously a scary time for me, this is my livelihood here - and its under threat.

Would appreciate any advice you guys may have! Thank you in advance