Chargeback protection or seller protection not available to online businesses

[jess786]

I am an online furniture business with paypal available at checkout.

Received a charge back from paypal and tried to understand how to prevent future fraud and charge backs.

I thought opting for charge back protection for an extra fee might help.

however after a long conversation from paypal I understand the following: If you are an online business who accept payment at check out, and where customer pick up from your store or you offer delivery service that is not trackable such as AUSPOST (furniture cannot be delivered by AUSPOST in my case because they dont take bulky items) - then as a business i am not covered by charge back protection or seller protection. This means that if somebody buys from me and pay via paypal, and later pick up or get delivered through a removalist, but then say that the transaction was unauthorised- then paypal will not offer any protection to me as a seller. This means that they will take the funds from my account despite me having delivered the goods to the customer.

Are there any other online businesses experiencing the same issue with paypal?

is this acceptable that paypal make money from so many online businesses but do not offer ANY solution for online businesses to be protected against fraud/scammers?  and shift the risk completely on these businesses?

So the only way an online business can be covered by charge back protection and seller protection is where they do not have customer pick up and ONLY Deliver through AUSPOST?

hoping to get some help on this issue thank you in advance.

[sharpiemarker]

@jess786 

Business owners have to carefully read/understand the terms of any payment processor/merchant account to see if it is a good fit for one’s business model, including the protection features/fraud prevention features and be prepared to make adjustments, if need be. It is what it is. There are limitations to the PayPal protections. PayPal never advertised a 100% guaranteed protection. 

Your government may allow you to write off business losses/refunds on your business income tax return, check with your tax adviser. You may consider self-insurance, setting aside a % of each sale to cover the occasional refund.

Use PayPal's goods and services QR code and get the buyer use it to pay in person for pick ups, then you’ll be covered:

https://www.paypal.com/au/webapps/mpp/ua/seller-protection

Ineligible Items and Transactions

The following items or transactions are not eligible under PayPal's Seller Protection Policy:

• Physical, tangible items delivered in person, including in connection with a payment made in your physical store, unless the buyer paid for the transaction in-person using PayPal's goods and services QR code.

Also, under Basic Requirements:

“For eligible tangible items, unless we otherwise agree with you, you must ship the item to the shipping address on the transaction details page in your PayPal account for the transaction. Transactions involving items that you deliver in person in connection with payment made in your physical store, may also be eligible for Seller Protection, so long as the buyer paid for the transaction in person by using a QR code for goods and services transactions. The shipping requirement does not apply to eligible transactions involving items that you deliver in person, provided, however, that you will provide us with alternative evidence of delivery, or such additional documentation or information relating to the transaction that we may request.”

You can check the PayPal supported shipping carriers for trackability and see which ones you can use:

Here's how to view the list of carriers: 

1. Click Activity.
2. Click Add Tracking Information on the payment you want to ship. 
3. Click the "Shipped by" dropdown to view the list of supported carriers.

As for PayPal Chargeback protection, exclusions apply there as well. I put the links for reference.

[jess786]

@sharpiemarker thanks for your input and yes this is what i am understanding from paypal. I am just shocked that this means that MOST ONLINE BUSINESSES like myself are not covered by paypal and i want to know if other online businesses know about this? are you an online business yourself? 

To accept to write off the losses at my end is not ok for me because this means that when times are good, paypal makes money, but when things are bad, i am the only one to cop the losses. Further i also find it shocking that in the times that we are living, that paypal has ZERO measures to help me mitigate fraud. With the amount of fraud and scams happening we all have a part to play including myself as a business owner - but so does paypal. They  have a responsibility to help prevent fraud - for online businesses using paypal - there are zero measures in place atm. 

The charge back that happened on my account seems to be its because a scammer used someone else paypal account to check out. I asked paypal how can that happen? they said to me they don't know. My question is if they know scammers are using peoples account - why not enable 2 factor authentication across the board and making it safer for everyone?  The proactive approach is not 'wait for the scam to happen and get the businesses to cop the losses - the right approach is ' scams are happening because people are being able to use other accounts, lets enable 2 factor authentication across the board'? the lack of consideration from paypal and complete shrugging off approach is not acceptable.

Are you simply accepting these losses at your end and simply writing it off? is that how most business owners are approaching this?