4 ms·

I make invoicing software that I sell using PayPal and it lets my users add a "Pay with PayPal" button to their invoices and over the years several of my client

by oblib 10y ago

I make invoicing software that I sell using PayPal and it lets my users add a "Pay with PayPal" button to their invoices and over the years several of my clients have called me and related stories similar to this and they all had some common traits. They all processed quite a bit of money via PayPal and they all had issues with customer's requesting refunds which they disputed or didn't issue in a timely manner, and they all sold something which had the potential to be a bit shady. One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Another sold guns. Since I sell access to web based software I don't have to ship anything and the product is "delivered" instantly. I also process refunds immediately and without any question. PayPal most certainly doesn't like getting caught up in refund issues. In my case most of the customers who've requested a refund contacted me first and I issued it promptly with a "Thanks for trying my software" note attached. The few that have contacted PayPal first resulted in PayPal sending me a notice about the request for a refund and, again, I issued it immediately, but their notice makes it clear that is what they expect and if I recall correctly they put a time limit on that. Take from this what you want but what I've taken from it is when a customer requests a refund issue the refund as quickly as possible and try hard to make that as easy as possible for your customers and to minimize the potential for them asking for one.

tyingq 10y ago
There's all sorts of other ways PayPal can decide to hold your funds as well. For example, they have a really simplistic implementation of OFAC regulatory compliance. Make a transaction that has the right strings in it, even in a comment, and it gets your whole account frozen. And some of these magic strings are very common names. Such that if someone named John Smith ends up on the OFAC list, any transaction with that string in it, anywhere, triggers chaos. That's just one additional way they can choose to freeze funds. Many others exist.
user5994461 10y ago
> One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Shady is an understatement. In the EU countries I do business with, that falls under sensitive hardware being send to a sensitive country. Not only do you need to get extensive approval from the national-export-agency-thing, but it's also special goods that's likely to be used for military purpose, thus you are required to contact the feds on your own initiative to disclose the full details of the order and the clients and get yet another level of approval and background checks. By "just sending the goods" you are in a very serious breach of regulations. Don't be surprised when your shipment is stopped at the border and the payments are frozen, because that's 100% guaranteed to happen if you get a control. Even if you try to get away with it. The intermediate providers like the shipping company and the payment provider still have to follow the law and they take it seriously.
- jacquesm 10y ago
  > By not complying and "just sending the goods", you are in a very serious breach of regulations. Don't be surprised when your shipment is stopped at the border and the payments are frozen. That would be the good outcome.
DrScump 10y ago
Since I sell access to web based software I don't have to ship anything and the product is "delivered" instantly. Since your "delivery" is not a discrete item and tracked by a common carrier they recognize (e.g. USPS, UPS, DHL, etc.), you also have zero protection from chargebacks. They won't even investigate beyond just taking back your money plus a fee.
- oblib 10y ago
  That may be. I've not worried about it though because they do notify you and let you know there's been a request for a refund.
- CodeWriter23 10y ago
  PayPal won't accept a charge back from a user until the user has contacted the merchant first. So user complaint? issue a refund.
  - DrScump 10y ago
    Not true at all. If a chargeback is filed with the card issuer first, Paypal takes the money directly from your account immediately, pending "investigation". I've personally experienced this several times (I have well over 10,000 transactions with Paypal).

by oblib 10y ago

tyingq 10y ago

There's all sorts of other ways PayPal can decide to hold your funds as well. For example, they have a really simplistic implementation of OFAC regulatory compliance. Make a transaction that has the right strings in it, even in a comment, and it gets your whole account frozen. And some of these magic strings are very common names. Such that if someone named John Smith ends up on the OFAC list, any transaction with that string in it, anywhere, triggers chaos. That's just one additional way they can choose to freeze funds. Many others exist.

user5994461 10y ago

> One of them sold aircraft parts to Iran, which may have had some legal restrictions that applied. Shady is an understatement. In the EU countries I do business with, that falls under sensitive hardware being send to a sensitive country. Not only do you need to get extensive approval from the national-export-agency-thing, but it's also special goods that's likely to be used for military purpose, thus you are required to contact the feds on your own initiative to disclose the full details of the order and the clients and get yet another level of approval and background checks. By "just sending the goods" you are in a very serious breach of regulations. Don't be surprised when your shipment is stopped at the border and the payments are frozen, because that's 100% guaranteed to happen if you get a control. Even if you try to get away with it. The intermediate providers like the shipping company and the payment provider still have to follow the law and they take it seriously.

jacquesm 10y ago
> By not complying and "just sending the goods", you are in a very serious breach of regulations. Don't be surprised when your shipment is stopped at the border and the payments are frozen. That would be the good outcome.

DrScump 10y ago

Since I sell access to web based software I don't have to ship anything and the product is "delivered" instantly. Since your "delivery" is not a discrete item and tracked by a common carrier they recognize (e.g. USPS, UPS, DHL, etc.), you also have zero protection from chargebacks. They won't even investigate beyond just taking back your money plus a fee.

oblib 10y ago
That may be. I've not worried about it though because they do notify you and let you know there's been a request for a refund.
CodeWriter23 10y ago
PayPal won't accept a charge back from a user until the user has contacted the merchant first. So user complaint? issue a refund.
- DrScump 10y ago
  Not true at all. If a chargeback is filed with the card issuer first, Paypal takes the money directly from your account immediately, pending "investigation". I've personally experienced this several times (I have well over 10,000 transactions with Paypal).