For digital goods, PayPal tends to give the benefit of every doubt to the payer; it's just a cost of doing business. If you have an out-of-pocket "wholesale cost" for any digital goods you are selling (e.g. phonecard PIN numbers you'd buy in bulk), there are a few things you can do to minimize your losses. For instance, you can disable the "Let buyer edit quantity" setting for each of your products, to allow purchase of only one unit at a time, which would inhibit a crook's ability to "clean you out" in one fraudulent purchase.



If you redirect buyers to a Common Thank-you Page URL (Seller Admin > Account Preferences) after checkout rather than using your standard E-junkie thank-you page, the buyer would be unable to claim their digital goods immediately following checkout; instead, in order to claim their product, they would need to wait to receive their thank-you email message, which we would send to the payer account's registered PayPal Email for PayPal checkouts. If the buyer is actually a crook using a stolen/hacked PayPal account, they would also need to have access to the actual inbox of the payer account's PayPal Email address -- e.g., if the buyer hacked into the PayPal account for someone@gmail.com, they would also need to have hacked into that person's Gmail account as well, in order to receive the thank-you email with the code or download link they purchased. You would also want to set "PayPal Account Optional: Off" in your own PayPal account, so buyers could not just checkout with a (stolen) credit card and provide whatever email address they wish.

i know it's sad, the same happened to me. i answered the paypal complaint by filling in that i have a receipt for the delivery - and entered the data from the transaction log including number of download attempts and ip that downloaded the items. also i state in the terms and conditions that there are no refunds once the links are activated. paypal first reserved the money from the transaction, but then sent the money back to the customer. but then gave me a bonus in the same amount, saying i played along their rules!!!



today another guy bought a $75 package with 15 files -then said it was done in error and that he did not download the items asking for a refund. i checked the transaction log and saw he did 19 attempts from different ip's !!!

adihamocan the link go to the buyer only after he fill in all his details, email , phone , address



if yes how can i setup this in your system please

Yes, that is the way our system normally works, automatically; our system does not issue a download link until we receive confirmation that the buyer's payment was completed. There is no way to prevent a buyer from sharing their download link with others, so that is why we give you expiration settings, so even if a link is shared, it will soon become useless to everyone.



There is also no way to detect when a buyer is using a stolen/hacked PayPal account, as that is only detected by PayPal after the fact -- usually when the legitimate account holder contacts PayPal to complain about the unauthorized purchase. PayPal will generally always reverse those types of payment, so you can only make it difficult for a crook to claim the download, as E-junkieNinja suggested above. You can post no-refund policies like Catgirl above suggested to deal with buyers who paid with their own account (i.e., PayPal can tell the account was not hacked/stolen) but who try to get their money back by complaining to PayPal after the download.



If you want to require a physical address, you would need to enable Shipping/Buyer's Address in the settings of each product that you want to trigger collection of an address during checkout. If you want to make the phone number required, you can do that in your PayPal account settings; if you also accept payment methods other than PayPal, in your E-junkie Seller Admin > Payment Preferences you can make a phone number required for other checkout methods that support them.

I had the same problem with my downloadable business manual, so I began shipping a physical CD via trackable Priority Mail, charging the customer, but selling it as a "feature". This enabled Paypal's "seller protection plan" for me because I could "prove" delivery of the product in a way Paypal could accept, and therefore more successfully challenge those types of seller disputes and refund requests.



Sadly, it doesn't prevent the fraudulent buyer from getting a copy of the book for free. In my case, it is of limited value unless you have a specific need to the information (it's not general business info or money-making info). And our publication is unique enough to be traceable if posted online outside our secure areas or if someone tries to copy it. I've never had a problem with folks pirating links, thankfully. They mostly get refunds by initiating a charge-back and, presumably, then using the product for free. (Charge-backs really annoy me because I offer a 100% money-back guarantee -- I guess some folks just like to cause trouble for others....)



If your product can carry the cost, you can investigate some of the PDF licensing solutions, in which you can "turn off" a fraudulent purchaser's access to the PDF over the internet by locking the PDF to a specific IP address.



Since I haven't experienced people sharing my links, I figure the occasional bad return is just a cost of doing business.



FWIW



gary

As E-junkieNinja and GraphicBass says this is just a cost of doing business. On my site I offer a 60 day unconditional refund. I do this because it helps people make the decision to make the purchase.



Even though we offer this "no questions asked" we only get a 3% refund rate. Given that this is all e-downloads, the cost to me is zero and it takes me about 20 seconds to processes.



As was said, just the cost of doing business on-line.

i had this also, buyer got the download then reversed the transaction.

I had a similar issue again -today. The guy downloaded and then said the quality of the file was different from item description to get his money back (which is bullshit). I sent Paypal the transaction data as a proof of delivery and they replied that buyer protection only refers to the delivery of the product, which was proven by the e-junkie receipt. So it's better than we think -seller protection- at least to a certain extend

I'm just going to throw my two cents in here as well ... as been said several times ... this is the cost of doing business online (unfortunately) ... especially when you're in the business of selling digital products. I know this all too well.



The best thing you can do is take all the precaution advice given and do the best you can. Unfortunately, expect these things to happen. If you've done everything you can to protect yourself, then you've done everything you can. Don't let it get you down too much and move on.



I know it stinks ... big time ... but at least it IS a digital product and you have very, very little overhead.

If e-junkie would actually have an option to delay sending that would save me a lot of the cost of doing business online.



My biggest problem isnt with people who reverse payment, its with people who are on phished accounts. Typically they get access to PayPal by getting access to an email account first. Ive sent a few emails to e-junkie about setting up a delay, but...

The main problem with offering a delay setting is that it will drastically increase your refund/chargeback rate. Buyers who purchase digital products online expect instant gratification, so if they cannot obtain their product immediately after payment, they WILL generally assume they've been scammed and file a dispute with PayPal Resolutions or their card issuer to get the payment reversed.



Enough of those complaints will get your PayPal account shut down, and you won't be able to set up another account with the same bank account or credit card information, so after you go through that a couple times using a different bank every time, it becomes increasingly difficult to impossible to continue doing business online at all.



We want to help our merchants, but we don't want to make it possible (or at least easy) for them to "shoot themselves in the foot" like that. Development is working on some fraud prevention routines that should work automatically and invisibly to prevent obviously fraudulent orders while blocking few if any legitimate orders and allowing those buyers to continue to claim their product as soon as payment completed.

I actually have it posted everywhere I sell that delivery takes hours. The only people that expect it instantly are those who have bought from me before.

I cant explain how many times a payment comes through and is instantly flagged, since I sell gift card codes they already have the code and I am out money, but if there was even a 1 minute delay I wouldnt be.

Here's a twist on things. We sell a premium bundle of all our download products and as of March 1st we increased all the prices, which put the bundle price up to £350.00. We had our first sale the other day and the customer got all the downloads and is happy.



PayPal then decided to do an investigation of the order without any complaint from the customer. I would think its because of the new price and they have withheld the money whilst the investigation continues. I know what the outcome will be which is the customer gets his money back and the items.



Anyone come across this before?



Cheers



Stu



P.S. My work around is going to be a free physical backup will be shipped as well, that way I fall into the guidelines.

That's... rather strange. We've never heard of PayPal investigating a transaction on their own without any dispute initiated by the buyer -- or at least nothing like that has ever been brought to our attention -- and we're not aware of any particular PayPal policy against selling non-tangible/digital-only products such as downloads without a shippable aspect such as a physical backup, although eBay does have such conditions on digital sales listed in their auctions.



You can enable the Shipping/Buyer's Address setting to trigger collection of a street address during checkout for any product including downloads, but that shouldn't normally be necessary unless you're actually shipping something.



Perhaps your speculation regarding the amount of the purchase is relevant to their interest in this transaction, and/or perhaps this may have more to do with something shady about the buyer's account rather than anything to do with your own account or product.

In looking through the Paypal User Agreement it looks as if there's a $10.00 fee for processing each chargeback.



Am I understanding that correctly?

You should consult PayPal help pages or support staff for clarification on that matter.

Amendment to the PayPal User Agreement and PayPal Website Payments Pro and Virtual Terminal Agreement

Effective Date: Aug 24, 2010



Increased Chargeback Fee. Section 8.5 (Additional Fees) is amended to increase the Chargeback Fee from $10 to $20 for payments in US dollars, and the foreign currency equivalent if the payment was in another currency.



Source: https://cms.paypal.com/us/cgi-bin/?&cmd=render-content&content_ID=ua/upcoming_policies_full



As previously stated, it is the cost of doing business. All you can do is block their name and email and ban them from your website.



Costs

1. Loss of funds

2. Loss of product

3. $20 chargeback fee

4. Chargeback strike (too many and you have a portion of your funds withheld to build a chargeback reserve or they terminate your account because you're high risk)



Fun stuff!