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Thread: How to deal with chargebacks on Virtual Products

  1. #1
    Member Chargebacknation is on a distinguished road
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    How to deal with chargebacks on Virtual Products

    I sell a virtual service online and have had a very hard time combating chargebacks. I don't ship anything and the user don't necessarily have to download anything. Because of this , whenever a chargeback comes thru, I can never prove that services were delivered to the client because it's nothing tangible. I've tried sending copies of emails sent back and forth between the client but paypal doesn't even consider those, same with our return policy. Can anyone give me an idea of what I can do to combat chargebacks with virtual products??

  2. #2
    Member Jinderoo is on a distinguished road
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    I'm curious as to what exactly you are selling! The only way I can imagine you may be able to combat this problem is by having some kind of log in to access the product. Would that work?

  3. #3
    Member Chargebacknation is on a distinguished road
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    I sell Virtual Assistant Services, so really the only time the login is when they sign up. After that everything is email. I track the IP from where they signed up and i've tried disputing based on this but i've never won it, even though I can show that they signed up for the service from their IP

  4. #4
    Member Streeter is on a distinguished road
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    Your business sounds interesting, sorry to hear people are trying to cheat you with chargebacks. My best advice is stop using PayPal! Other financial service options are better at customer and business service in my opinion.

  5. #5
    Member Chargebacknation is on a distinguished road
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    Got any suggestions? I'm really starting to hate paypal. We have a clear refund policy on our site and paypal literally ignores it. It's almost like their helping the customer cheat us out of money.

  6. #6
    Member Jamie55 is on a distinguished road
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    PayPal is tough on digital product chargebacks. Have you looked into any other shopping cart systems like for instance 2checkout.com? I personally don't use them but I know they charge a monthly fee for their service. When a customer makes a purchase they have to fill in more information than PayPal demands. Maybe this type of system would be a deterrent to chargebacks because of the way the process is done.

  7. #7
    Junior Member aramiin is on a distinguished road
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    the problem is that with the present economy people are abusing of their credit card chargebacks privileges. They continue to have their lifestyle as they did in "good times" when truly they cannot afford it. The beauty industry is getting deeply hurt. Women are going all over for a new salon to get their hair color, haircuts or any other service and then chargeback with any excuse. I think salons must stop accepting credit cards or credit cards should improve their policy and help merchants also!

  8. #8
    Junior Member boonodoh is on a distinguished road
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    Question, do you know if the chargebacks you are seeing due to friendly fraud or actual stolen card fraud?

  9. #9
    Member buzz is on a distinguished road
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    There is probably not a lot you can do about it. But it may be wise to check and block recurring IP addresses, to avoid further losses from people living in the same area. The only good thing is that at least you aren't losing money on a real product.

  10. #10
    Member SkyDiver is on a distinguished road
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    It's not just PayPal. No matter which payment processor you use, any time you are selling virtual products you will lose a chargeback. Card association policies all pretty much state that with virtual products or even downloads the merchant is virtually never going to win. Adjust your business model accordingly.

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