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Windows software development and business blog

Archive for March, 2010

Paypal Charges $10 for Nothing

Posted by bionicoder on March 26, 2010

If you ever used Paypal merchant service, you would feel like to run away from it.  Especially if you got a chargeback from buyers.

Since we used Paypal to receive money from software buyer, we got a few chargebacks. In the beginning, we tried to dispute by providing enough proof to Paypal.  As you guessed, we lost case and payment was taken back. Additionally  Paypal charges $10 for disputing on our behalf per Paypal claim.

Then we thought if we can’t win, why we need Paypal charge us $10 for disputing a hopeless case. So we stopped arguing anymore. When other chargeback cases happen to us, we just refund money back to buyer without any argument. This at least saves us $10!!!

However this “good” thing did not last too long. In recent two years, we noticed Paypal informs us about chargeback two months after transaction date. That means Paypal doesn’t leave us the  option to refund money to buyer. The only option available for us  is to let Paypal dispute for us. Of course we have to pay $10 for disputing each time.

The most ridiculous chargeback was two weeks ago. We got an email from Paypal about a Chargeback. The transaction was in early January 2010. Of course, we can’t refund from our Paypal account. In Paypal email, it asks us to provide information about transaction and proof of sending purchased item to buyer within 10 days.  Since we already know there is no hope to win the case, we just wait without doing anything.  On the tenth day from Chargeback informing day, we got another email like below.

Hello Bionicoder,

Using the information you sent us, we are disputing the buyer’s request to
reverse the payment.

The buyer’s card company has reversed the charges for this payment. We have
placed a temporary hold on the disputed funds until this matter is
resolved. If the card company decides the case in your favor, the funds
will be available in your PayPal account.

The credit card company has charged PayPal a settlement fee for this
chargeback. According to the terms of the PayPal User Agreement, we debited
your PayPal account to cover this fee.


Attn: Accounting Department
P.O. Box 45950
Omaha, NE 68145-0950
United States

What a ridiculous thing! We never provided any information to Paypal. How can they use the information we sent?

In the mean time, this chargeback event was marked as “completed'”. Like always, Paypal charged extra $10.00, but for nothing.


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