The Clearsale Blog

What You Need to Know About PayPal's Chargeback Protections for Businesses

What You Need to Know About PayPal's Chargeback Protections for Businesses

Making secure online sales can be a challenge for businesses. Online retailers enjoy the benefits of being able to sell their products at anytime to anyone who may be interested, but this comes with the added risk of not being able to adequately collect the money they are due. In this blog let's take an in-depth look into Paypal's protections for businesses that aim to minimize claims, merchant fraud, and chargebacks.

Seller Protection Program

More than almost anything security and peace of mind are essential for online retailers. Paypal created a seller protection program to give retailers and merchants the invaluable assets of these two things by focusing on guarding businesses from losing money to claims and chargebacks. Paypal's Seller Protection Program zeros in on the two types of consumer complaints unauthorized transaction and item not received.

If a consumer complains that they never authorized the charges made to your business or never received the items they ordered this could affect your Paypal balance. However, Seller Protection vigorously analyzes these contested charges, and ONLY if they pass Paypal's rigorous standards then your business's account balance will not change despite the fact that the consumer claims that they never authorized the charges or received their items. These rigorous standards sometimes give head ache to merchants, one of the reasons that could be easier to rely on a fraud protection solution instead.

Tips On Avoiding Chargeback Disputes

Chargebacks are no good for your business, but if you follow a few easy tips on your end then you may find that the number of chargebacks occurring to you significantly reduces. Let's explore some ways that you can avoid chargebacks or make the process that much smoother.

  • Provide your customers with your contact information. Oftentimes, consumers file chargeback claims because the item they received was significantly different from what they were expecting, or they never received the item that they paid for. In either case by providing customers with your contact information you can talk to them about the issue that they have and in a lot of cases come to resolution before they authorize a chargeback or contest your transaction.
  • Respond in the timeliest fashion that you can to any reasonable buyer inquires you may receive. Nobody wants to wait especially when it comes to the state etc of something that they spent their hard-earned money on. By responding to your customers in a timely fashion you not only maintain a good working relationship but you also increase your chances of resolving the issue before a chargeback can be authorized.
  • Paypal offers buyers and sellers alike dispute resolution services for contested charges and other disagreements. If one of your customers tells you that they are going to file for a chargeback with their credit card company or banking institution, suggest that you use the Paypal Resolution Center instead. The Paypal Resolution Center allows you and your customers a space for you to work out your dispute.
  • Provide a crystal clear return and refund policy on your site or selling page or before a customer checks-out and finishes a transaction with you. If you put your return and refund policy in clear, direct language there will be little room for disputes down the road.

Tips to Avoid Item Not Received Claims

Item not received claims are one of the most common reasons chargebacks occur to businesses. You can avoid these types of situations by following a few simple tips that will not only give you peace of mind but ensure that your shipments are always accounted for.

  • Give your customers realistic delivery dates. This is the first step you can take to cutting back on item not received claims. A number of these claims are made by people prematurely while their package is still en-route. Provide your customers with a realistic window of when they can expect their package and you will significantly cut down on these claims.
  • Ship your items with a service that will provide you with online tracking. Standard shipping services only show you when and if an item was sent out. Tracking services not only allow you to track the packages progress along every step of the journey, but they also assure you that your packages have been successfully delivered to your customers. 
  • Order shipping insurance for all packages that you send. The amount of potential things that can go wrong while a package is en-route to its destination is numerous. Shipping insurance works in two great ways for you, it not only ensures that the item is covered in the event that it gets damaged or lost, but it also includes tracking and delivery information as well. When it comes to insuring your packages one thing you do need to keep in mind is that the coverage can change depending on the type of package, the declared value, and the shipping company you are using. Always talk with the shipping company to ensure that you have the proper coverage on all of your packages.

There are many different facets to operating a business that sells products online especially when there are real cases of fraud that do occur to businesses and to consumers alike. It is important to be careful about all of the transactions that you make online, and to be understanding to your customers when they are the victims of fraud or have simply forgot that they made a charge to your business.

In card-not-present transactions, merchants alone bear the brunt of chargebacks, so it’s important to be prepared — and protected. E-commerce survival means minimizing fraud losses while successfully processing legitimate sales; a solid risk management solution can help you do just that.

Contact us today to learn more about how ClearSale’s Chargeback Protection Insurance solution can help you increase your revenue, let you approve more orders and guarantee you’ll never again pay for chargebacks.

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