Paypal Can Reverse Credit Card Payments
If you are a business owner who provides a service instead of tangible goods and you accept payments via Paypal, you may want to beware. Cara Williams over at the Freelance Switch blog recently detailed her experience with Paypal as a graphic designer.
In her case, a sizable Paypal payment was unjustly reversed by her client six weeks after it was made. The client falsely claimed that he paid for artwork that was not actually received. Immediately after reporting the “problem” to the credit card company and to Paypal, the client was issued a refund and Williams’ Paypal account abruptly went far into the negative. All this occurred without Williams ever being given the option to present her side of the story.
In Paypal’s defense, after the fact, they heard Williams’ complaints and even helped her “gather a case” to present to the client’s credit card company. Of course, the credit card company would only take the side of their customer and refused to acknowledge any other point of view. So the efforts of Williams and Paypal were all for nothing. It sure would have been nice if Paypal had consulted her on the dispute before issuing the refund from her account.
If you are a service provider, you may want to use a third-party payment collector that offers better protection and helps settle disputes. Another option is to get a legally binding contract, signed by both parties, stating clearly that payment is issued only when all services and/or goods have been provided to the client’s satisfaction. Bottom line: Protect yourself when dealing with credit cards on the Internet, not only as a shopper but also as a service provider receiving payment.
March 20th, 2008 at 12:15 pm
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