Customer has opened a credit card chargeback but I have proof of shipment & delivery.

[missing-pieces-china]

I need some advice. I have never encountered this issue before. This customer bought 2 items from me on separate days in September. There were plenty of messages back & forth between us on Ebay as she wanted a few items.  Anyway, on one of the transactions she has filed a chargeback. We sent the item via C & S & have checked the tracking details on Australia Post which says that the item has been delivered. As we used C & S we did not receive a lodgement receipt but the item was scanned at the Australia Post counter. We will be responding to the Paypal claim with the tracking details & C & S summary. Is this enough? It clearly shows her address. Does this type of issue attract a defect? Thanks in advance for any advice. It is greatly appreciated. 🙂

[5kazam]

Well, I think that stinks!!!

It hasn't happened to me, thankfully, but if it did and no-one gave me a logical and valid reason, then I'd be taking it to the FSO.

I wouldn't sit quietly back and lose my money and item.  

[jensmanchester-australia]

kazam - yes it does stink but there is not much can be done about it. Fortunately chargebacks are really quite rare so it is not something most sellers have to worry too much about.

[clarry100]

What we learned thru both of ours was that in our case DO NOT fight it.

This is simply because we use large letter 99.9% of the time and just becasue of that point alone we will always lose the case.

So better we just roll over and accept liability and just lose only the item price (and of course the item itself).

If we choose to fight it PayPal will add on their fee of $15 and then we still lose plus the fee on top.

So unless it happens to be one of those rare occasions when we send via a C&S parcel then we will just give in immediately every time.

Of course we will always try sending a message to the buyer asking the for compensation. Just in case they are feeling honest enough to repay us.

[5kazam]

Have you contacted your buyer to get some sort of explanation?

[missing-pieces-china]

Thanks so much for all of your responses so far! We haven't contacted the customer yet about this.

Just spoke to Paypal & they said that there should not be a problem as they can see that the item was delivered. However, they said that while proof of delivery was sufficient for them it may not be sufficient for the bank. Paypal should cover it under their  Seller Protection program if the bank insist on claiming the funds.  Ultimately Paypal will wear the cost in the worst case scenario ( at least that's what the guy said) They will let us know the decision in about a week!

I had no clue that the banks would issue chargebacks for overdrawn credit cards. The whole thing seems so unfair. If we sell an item in good faith & have proof of postage & that the item has been delivered it seems ridiculous that we have to waste time chasing it up. I'll keep you guys updated when I know more.  🙂

[5kazam]

I think contacting the buyer is a must - hopefully you'll get an answer.

I had a conversation earlier with a person who had CC chargebacks and won.

The argument he put forward was that the buyer used their CC to pay PayPal.  The buyer didn’t actually pay the seller.  PayPal is the entity who does that.  So if there is a CC chargeback instigated by the bank, it is PayPal who should be the one to repay the money.  But then PayPal try to recoup the funds by back-charging the seller. 

I also can't believe the banks do this - why on earth they aren't getting the card holder to pop some money onto the CC to bring it back into line is beyond me.  

One other thing.  If PayPal did rule in the banks favour, I would be insisting that before the money is returned to the bank that the buyer must return the item to you, at their expense.  After you receive it, then agree to the release of the money.  

If you're into a little 'light' reading, have a look at  'epayments code'.  Although it is voluntary for financial institutions to subscribe, all the major banks have, and PayPal have as well.  

[2106greencat]

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@missing-pieces-china wrote:

Thanks so much for all of your responses so far! We haven't contacted the customer yet about this.

Just spoke to Paypal & they said that there should not be a problem as they can see that the item was delivered. However, they said that while proof of delivery was sufficient for them it may not be sufficient for the bank. Paypal should cover it under their  Seller Protection program if the bank insist on claiming the funds.  Ultimately Paypal will wear the cost in the worst case scenario ( at least that's what the guy said) They will let us know the decision in about a week!

I had no clue that the banks would issue chargebacks for overdrawn credit cards. The whole thing seems so unfair. If we sell an item in good faith & have proof of postage & that the item has been delivered it seems ridiculous that we have to waste time chasing it up. I'll keep you guys updated when I know more.  🙂

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Keep all records back and forth, and depending on the outcome (re O/D Credit Card, which in effect is the banks responsibily to have withdrawn or blocked any future charges) , defintiely contact the FO if this is not found in your favour, good luck.

[cherry*135]

If a person has gone over their credit card limit and/or stopped making any payments to reduce the balance on the card, how is it legal for banks to do chargebacks to recoup money from goods the credit card holder has bought & received? 

That is not unauthorised use of a credit card.

An unauthorised transaction is one made by someone else using your account without your knowledge or consent.

[5kazam]

My sentiments as well.  I keep saying, why aren't the banks getting funds from the card holder/owner to bring the account into line. That's the first port of call.  And unless the card holder is a bankrupt, there is no excuse for a bank to try to recoup money from a legitimate sale source.   I wonder what Myer and David Jones reaction to that course of action would be.

To me something smells awfully fishy, if the banks are going down this track.

[cherry*135]

Here are a few details you may not be aware of.

What happens to the seller's funds when a chargeback is received?

A chargeback sets in motion a chain reaction. The buyer’s bank pulls the funds from PayPal’s merchant bank. PayPal’s merchant bank pulls the funds from PayPal. And we, in turn, pull the funds from the Seller.

Had PayPal’s merchant bank not pulled the funds for that chargeback, PayPal would not have needed to pull the seller's funds. Note that if the dispute is found in favour of the seller, PayPal will credit the Seller’s account with the disputed funds.

What is a chargeback

.....Although a chargeback may appear similar to a PayPal claim, it’s actually a process that is granted to a cardholder by their credit card company and initiated outside of PayPal. In a dispute over a chargeback, the decision is ultimately made by the credit card company and PayPal can’t control the outcome.

 Disputing Chargebacks

How does PayPal help sellers fight unwarranted chargebacks?

Although the credit card company ultimately decides whether or not the buyer has a valid reason for filing a chargeback, PayPal works with our sellers to fight unwarranted chargebacks and attempts to recover funds associated with those chargebacks.

In order to dispute unwarranted chargebacks, sellers must provide PayPal with appropriate evidence. There are three ways for a seller to provide evidence:

• For faster resolution, go to PayPal Resolution Center.
• Email chargeback-response@paypal.com.au.
• Fax PayPal Chargeback Team 02-8223-9506.

Our chargeback specialist will combine the evidence provided by the seller with any other information PayPal may already have, and will dispute the chargeback when appropriate.

If PayPal wins the chargeback on behalf of the seller, the seller will be reimbursed the funds associated with the chargeback.

What information can a seller provide to increase the chances of winning a chargeback dispute?

The following types of information can increase the chances of a chargeback dispute being ruled in favor of the seller:

• Proof of delivery, such as online tracking numbers.
• Copies of the original item description or auction description, including any photos.
• Proof that the buyer was already refunded.
• Proof that the buyer was provided with a replacement product.
• Correspondence with the buyer or feedback from the buyer.
• Any agreements signed or accepted by the buyer at time of purchase.
• Any return policy that was communicated to the buyer.

Read more

https://www.paypal.com/au/webapps/mpp/security/sell-chargebackfaq#goto1