This guide has been written to educate readers on my experience of credit card chargebacks. I actually won my case after 4 weeks, and I wanted to share my experience of what I did to retrieve my money. Please read the guide and vote, I think it makes interesting reading.
Please note I have kept the personal details of the (buyer/scammer) private, to protect his privacy. All other information presented is factual and correct.
WHAT IS A "CHARGEBACK"?
A chargeback occurs when a buyer asks their credit card company to remove a charge from their credit card statement. The credit card company then ask the buyer why they are disputing the charge. The common reasons for reversals / chargebacks are:
- a credit card number is stolen and used fraudulently
- a buyer makes a purchase, but believes the seller failed to fulfull their side of the agreement (i.e. did not ship the item; ship an item that was very far from the sellers description; the item was damaged when it was received).
In May 2006, I sold a Pal Zileri mans suit for £92.29 (inc postage). The person who bought it lived in Greece, and had an "unconfirmed" Paypal address (i.e. it has not been verified by paypal). This straight away should ring alarm bells - and I should have done further checks to verify his identity....however in my defense, I checked to see if his ebay address matched paypal (and it did). I checked his feedback and the type of items he bought in the past (all were varied, and did not arouse suspicion). The guy paid by paypal within 3 days, and I posted the item 3 days later (on 25th May). I duly received confirmation that the item had arrived, by the +feedback left on 11th June, stating: "fantastic item, good seller"
80 (yes 80!!) days after the item had been bought, I received an email from Paypal stating that the buyer had filed a chargeback with his credit card company, claiming that the transaction was not verified. Under the terms and conditions of Paypal, the money was removed from my paypal account, and placed on temporary hold. Paypal further explained that the investigation would take upto 75 days to be concluded. This put my account into a negative balance, which I had to top up with a bank transfer (took 7 days). Furthermore my subscription to my photo hosting company bounced (due to the -balance), thus potentially removing all my photos from my ebay shop & auction (some 100+)...luckily I spotted this and made an alternative payment!
WHAT EVIDENCE TO SUPPLY
Paypal asked my to provide evidence of the transaction, so that they could fight my case with my buyers credit card company. As I am an organised seller, and I use a Royal Mail Despatch Book, I had a record of the item being posted. Furthermore, as I use "Selling Manager Pro", I always type in the recorded delivery tracking number in the "buyer information" box, so that I (and the buyer) have a record of the tracking number - this proved invaluable.
- photocopy of the page in the Royal Mail Despatch Book, showing the address of the customer, the "International Signed For" tracking number and the ink stamp by the Post Office, showing the date the item (and also 8 others on that page) had been posted. (NOTE - if you dont use a despatch book - and most people dont - you would have to find the postal slip (from 80 days back) - now that would be a task! Its well worth using one...see my other guides (on Royal Mail) for info on these books and how to get hold of them.
- Receipt from Royal Mail SmartStamp (the online stamp purchasing software)....amazingly they have a record online, of the actual stamp I used to post this parcel!!!! The receipt shows the Type, Description, date, time, price paid and the "Indicia ID" - the latter is a unique ID that can be verified with the Royal Mail...NOTE (its well worth having smartstamp just for this very situation!)
- Copy of the tracking number (which I verified on the royal mail website) - it showed that the parcel had reached Greece.
What I did not supply (but could)
- Copy of the signature, given by the receiver of the parcel. I did not supply this, as I would have to pay RM for it. I believed I had enough evidence above to satisfy the credit card company.
Anyway 4 weeks after supplying the info to Paypal, and returning back from holiday in France, I had a pleasant email from Paypal stating that my funds had been returned to my account, and that the chargeback had been reversed (i.e. found in my favour).....however the sting in the tail is that the credit card company had charged paypal £7 to process the claim...paypal then passed this charge onto me....so this person who fraudulently tried to get his funds refunded...actually cost me 4 weeks interest on my money and £7 (unfair).
Further interesting information.
After looking into whether I could claim back this £7, I discovered I could not legally, and also that Visa and Mastercard are addressing a class action....soon they will be accepting liability for the £7 ( and not passing it onto Paypal...and ultimately the ebay seller!).
The buyer in question has been suspended by ebay....maybe he though: 'I know, I have left ebay now, so I will try and claim all the money I paid out to those lovely sellers by doing a credit card cash back"...who knows the mind of a crook?
- Chargebacks are not Paypal's fault - they are nothing to do with payment reversals under the buyer protection scheme. Paypal were really helpful on the phone, and ultimately they did retrieve my money.
- Send all your parcels by recorded delivery (UK) or International Signed / Airsure (non-UK)...its the only way you can defend yourself and prove a parcel was delivered...otherwise you are open to credit card fraud by buyers using the chargeback facility.
- Keep all your records of the recorded delivery....use a Royal Mail Despatch book - its then easy to flick back and view the item beign disputed.
- Keep all photos of items for upto 6 months (period that a chargeback can be made)
- As soon as paypal inform you of the CB, immediatly gather the information and send it. Use their special fax facility, and add extra evidence by using their special email address
- Be clear, concise and ensure you give as much evidence as possible....even links to any +feedback recieved
I hope this has been of use....remember it is possible to win chargebacks....it takes time, but above all be organised and be prepared from them....they will occur. Its only by being organised that you can win! Good luck!