5 ms·

I work on an online game also. In the case of virtual goods, you will never have a chargeback side with the seller. Never. You are at the complete mercy of eve

I work on an online game also. In the case of virtual goods, you will never have a chargeback side with the seller. Never. You are at the complete mercy of every customer. All you can do is ban the account after there has been a chargeback. We get reasons like "I need to pay my rent so I want the money back" or "I played the game for a few days and I don't want to play anymore". You can supply email evidence like that as part of the chargeback claim. You will still be decided against. For virtual goods, the credit card system is just broken. Chargeback fees tend to be around $15, but you also lose the cost of the purchase.

tantalor 14y ago
Isn't this fraud? If you have evidence that customers are ripping you off, why not report to law enforcement?
- elisee 14y ago
  I don't think it would be economically viable for most independent developers or small companies to spend time and money that could be used for productive stuff to deal with a few individual chargebacks every now and then, with no guarantee that you'll make your money back anyway. Plus what happens when you lose? When it's on a massive scale like in TFA, they will probably work with law enforcement but 1) will they find the responsible? 2) even if they do, would the payment processor agreements with the various banks cover getting the chargeback fees cancelled? I don't know but it doesn't seem a given.
  - tantalor 14y ago
    You raise a good point about the cost of pursuing these cases. From my naive understanding, this type of fraud would have both criminal and civil penalties. For the criminal component, determining jurisdiction might be an issue, so there ought to be a federal agency to report cases to. The civil components might be "sold" to specialized firms, e.g., debt collectors. The point is to disincentive fraudsters and recompense victims.
gamblor956 14y ago
If you can provide evidence that the charge was legitimate, the CC processor will undo the reversal of the charge (which means the charge will be placed back on the customer's bill). YMMV outside of the US, but the CC processors have lost enough court cases in the US on this point to settle the issue.
- elisee 14y ago
  At least PayPal doesn't cover digital purchases at all for sellers. It would basically be your word against the credit card holder anyway since there is no physical proof so I can understand why they can't. Anyone could make up some proof. The root problem is with the banks: it's their system that is being used fraudulently and they should be the ones paying for it so that they have an incentive to improve it.
  - gamblor956 14y ago
    Paypal does cover digital purchases for US sellers. I know this for a fact because I have used Paypal as a merchant of digital goods and been in this situation. Paypal's service was exemplary; I simply provided a receipt of the transaction, the customer's IP address, and logs showing that the same IP address downloaded the software. Paypal never charged back the transaction and handled the dispute for me with the customer's bank. If the customer's bank refused to undo the chargeback, then Paypal swalled the loss on my behalf. Anyone could make up some proof. Well, yes. But people generally don't go through the trouble of making up proof for relatively small transactions (<$100, from the merchant's perspective). It's simply not worth the time and effort to fake up proof for something less than a $100 unless the work would take a minute or two more than simply collecting the evidence supporting the transaction.
    - elisee 14y ago
      Was this recent? Did you sign up for a particular PayPal service? I use the basic Express Checkout myself so maybe some of their more expensive plans cover that? Anyway, from my own recent experience and what I heard from several indie devs, even after providing server logs & screenshots, PayPal can't do anything (and I'm not blaming them, I'm sure they do fight the charge if at all possible) EDIT: Oh, just saw you wrote "US seller". I'm not in the US so that might have something to do with it maybe.

tantalor 14y ago

Isn't this fraud? If you have evidence that customers are ripping you off, why not report to law enforcement?

elisee 14y ago
I don't think it would be economically viable for most independent developers or small companies to spend time and money that could be used for productive stuff to deal with a few individual chargebacks every now and then, with no guarantee that you'll make your money back anyway. Plus what happens when you lose? When it's on a massive scale like in TFA, they will probably work with law enforcement but 1) will they find the responsible? 2) even if they do, would the payment processor agreements with the various banks cover getting the chargeback fees cancelled? I don't know but it doesn't seem a given.
- tantalor 14y ago
  You raise a good point about the cost of pursuing these cases. From my naive understanding, this type of fraud would have both criminal and civil penalties. For the criminal component, determining jurisdiction might be an issue, so there ought to be a federal agency to report cases to. The civil components might be "sold" to specialized firms, e.g., debt collectors. The point is to disincentive fraudsters and recompense victims.

gamblor956 14y ago

If you can provide evidence that the charge was legitimate, the CC processor will undo the reversal of the charge (which means the charge will be placed back on the customer's bill). YMMV outside of the US, but the CC processors have lost enough court cases in the US on this point to settle the issue.

elisee 14y ago
At least PayPal doesn't cover digital purchases at all for sellers. It would basically be your word against the credit card holder anyway since there is no physical proof so I can understand why they can't. Anyone could make up some proof. The root problem is with the banks: it's their system that is being used fraudulently and they should be the ones paying for it so that they have an incentive to improve it.
- gamblor956 14y ago
  Paypal does cover digital purchases for US sellers. I know this for a fact because I have used Paypal as a merchant of digital goods and been in this situation. Paypal's service was exemplary; I simply provided a receipt of the transaction, the customer's IP address, and logs showing that the same IP address downloaded the software. Paypal never charged back the transaction and handled the dispute for me with the customer's bank. If the customer's bank refused to undo the chargeback, then Paypal swalled the loss on my behalf. Anyone could make up some proof. Well, yes. But people generally don't go through the trouble of making up proof for relatively small transactions (<$100, from the merchant's perspective). It's simply not worth the time and effort to fake up proof for something less than a $100 unless the work would take a minute or two more than simply collecting the evidence supporting the transaction.
  - elisee 14y ago
    Was this recent? Did you sign up for a particular PayPal service? I use the basic Express Checkout myself so maybe some of their more expensive plans cover that? Anyway, from my own recent experience and what I heard from several indie devs, even after providing server logs & screenshots, PayPal can't do anything (and I'm not blaming them, I'm sure they do fight the charge if at all possible) EDIT: Oh, just saw you wrote "US seller". I'm not in the US so that might have something to do with it maybe.