Some time ago I have written about two way to deal with returns of merchandise from business point of view. Today I would like to share how that story has developed since then.

Let me refresh how story has began. We had a customer who has purchased couple of sportswear items online. Several weeks after she received those items she claimed that she did not like them and wanted to return them for refund. By that time it was already way past of expiration of return policy. So we could not accept return even if we wanted to make an exception. Anyway she claimed that she mailed package to us and demanded the refund. She could not provide any proof of shipment and we did not receive the package. She requested chargeback via her VISA credit card company and managed to get money from our PayPal account after 5 months after the purchase.

Let me mention few things about PayPal. PayPal has become huge on online payment solution market. Sellers reports drop in sales if they stop accepting PayPal, especially on eBay auctions. But PayPal is not the bank and does not really have to obey strict Federal banking regulations so they can take money from your account you have with them, freeze account and funds. etc even without any warning to account owners.

PayPal offers seller’s protection policy and it seams like by complying with few requirements you as sellers it protected, but just take a look at this quote from the policy:

A Chargeback is covered if it was due to non-receipt of merchandise, or an unauthorized payment. A Reversal is covered if it was due to an unauthorized payment. The Seller Protection Policy does not cover Claims for Significantly Not as Described or for non-receipt of merchandise, or sales of intangible goods, services, or licenses for digital content. PayPal Claims are not covered by the Seller Protection Policy. For more information on winning a PayPal Claim see the Buyer Protection Programs section of this agreement.

What they basically say is customers have 100% chance to win chargeback if they claim that merchandise was not as described.

In our quest to fight this particular chargeback we have researched a lot of related forums, blogs and talked to a lot of retail industry gurus. And it seams like everybody agrees with saying that customer is always right and there is nothing businesses can do about it. Before that sounded to me like “of course we as a business want to be nice with our clients, but we would want fair resolution of dispute if there is one.” Now though it seams like chargeback is really just another cost of doing business, and buyers have a lot more rights than sellers.

In order to protect themselves against such situations businesses could stop accepting credit cards in general because of this and also because of fees that various merchant account providers charge per transaction. But there were too many research done that clearly indicate drop in sales volume if there is no credit card present as a payment option. PayPal says that based on their one research adding PayPal Express button can increase sales by 14% on average. So I guess we are sticking with it for a while.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.