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Ecommerce Forum

Seller Protection from Fraud other than PayPal?

 4:36 am on Feb 17, 2010 (gmt 0)

Due to chargeback hell I only sell to customers via confirmed paypal addresses (like an Ebay seller) but I think I may be taking a hit on my sales as a result.

I'm totally unwilling to accept the risk of chargebacks, so are there any alternative processors that will provide me protection given that I satisfy some criteria, or that force the customer to verify themselves somehow?

How about a third party company that will take my payments, deal with the verification, and then tell me whether a customer passes or fails. If they pass, then I am guaranteed funds.

Basically a company like paypal that will accept credit cards and pro-actively deals with confirming payments and takes liability as a result.




 4:30 pm on Feb 17, 2010 (gmt 0)

Basically a company like paypal that will accept credit cards and pro-actively deals with confirming payments and takes liability as a result.

You think PayPal actually does this? Yeah, right! Take a closer look at their so-called "Seller Protection"- it is full of loopholes.

If a company like this exists, expect to pay a hefty premium for it. Especially if you are at a high risk for CBs, as you seem to be.

I'm totally unwilling to accept the risk of chargebacks

Then you should consider a different line of business. There are steps you can take to minimize CBs, but not eliminate them. There will always be new ways for fraudsters to game the system.


 4:53 pm on Feb 17, 2010 (gmt 0)

I will say this Googlecheck out has been a good one. 2-3 years use not one chargeback.

paypal well another story and not much else to say about them.
pro-actively deals with confirming payments and takes liability as a result.
if you think this is true just give it some time.

merchant account you need to do some work on ownership.


 2:48 pm on Feb 18, 2010 (gmt 0)

Atorres: Thanks, that's exactly what I was looking for.

Bwnbwn: Will check out Googlecheck, thanks.

Any other suggestions are welcomed. Not interested in "PayPal sucks" outbursts.


 2:49 pm on Feb 18, 2010 (gmt 0)

Oh bwn - you're talking about google checkout? But they don't take any liability right?

Are you just under the belief that their fraud detection is really good so it protects you overall?


 2:57 pm on Feb 18, 2010 (gmt 0)

Google checkout DOES have a protection policy actually. It isn't cut and dry like PayPal in that customers just need to be verified, but you are totally covered and the terms are almost identical to PayPal.

Thanks guys. Looks like I'll be including Google Checkout in my system.


 3:36 pm on Feb 18, 2010 (gmt 0)

Giving customers payment options such as PayPal and Google Checkout will help increase sales but you need to accept credit cards directly from customers if you want to maximize your sales.

The issue with not accepting credit cards directly is the drop off rate associated with third party payment providers. Just for example, a customer goes to a site and has the option of using PayPal or Google Checkout. The customer does not like using PayPal and doesn't have a Google Checkout account. The customer clicks off and completes the purchase elsewhere.


 5:05 pm on Feb 18, 2010 (gmt 0)

No doubt... But at $300 a pop for each order and the nightmares I've heard from many, many vendors (as well as my own experiences in other ventures) I'm willing to lose those orders rather than take the risk.

And Google Checkout seems to provide a system that permits the use of credit cards much easier than PayPal. PayPal requires address confirmation to guarantee orders - doesn't look like Google does.

Regardless, I don't think the way credit cards are used and how chargebacks are completely the responsibility of the merchant is going to last - it's a ridiculous system right now, and the use of third party guarantors is going to become more and more commonplace - customers will probably learn to understand this.

I don't mind losing sales so that I don't have to worry about customers' intentions in the cases where customers don't want to use a third party processor.

Regardless, it's pretty obvious the reason I've created this thread is to try to minimize the loss because of my awareness of what you have just pointed out.


 5:22 pm on Feb 18, 2010 (gmt 0)

What about something like authorize.net. They advertise fraud protection


 5:23 pm on Feb 18, 2010 (gmt 0)

From my uinderstanding Google Checkout provides seller protection to orders that pass their Buyer Credit Verification System. Not exactly sure what this is but probably some sort of automated AVS system or something to that effect.

Also, signature confirmation is required on orders above $250 which is not a big deal if you're doing this anyway.


 5:27 pm on Feb 18, 2010 (gmt 0)

Authorize.net offers "fraud detection" software. You set the filters and the system kicks back a score. If you're comfortable with the score you ship the merchandise. The problem I have with all these "fraud prevention" systems is that there is always the possibility of false negatives and false positives.


 7:08 pm on Feb 18, 2010 (gmt 0)

D.O.C. the opposite of C.O.D.

Delivery on receipt of cash.

Have them send money orders or wire money to you. Once you get it, you ship.

Fraud protection will not save you from charge backs. Nothing will.

If you want to accept credit cards then you have to accept the fact that charge backs are offered by credit card companies as a service to their clients. No gateway taking credit cards can tell you that no chargebacks with be issued because it isn't up to them it is up to the card company.

I am not sure what happens in Google checkout if someone claims to not have received the goods despite you having shipped.


 4:40 am on Feb 19, 2010 (gmt 0)

Demaestro: I think requiring customers to send money orders would be ridiculous in regards to the damage it would do to the order rate unless you have a serious competitive advantage.

But you are incorrect - you ARE protected by both Google and PayPal from ALL chargebacks if you deliver tangible goods according to their requirements and the orders you deliver to are payment guaranteed.

That's what I am looking for in this thread - not necessarily sophisticated fraud prevention (although if that's the best we can do, so be it) but rather a company that will take the liability.

Both PayPal and Google Checkout provide this. Any others would be super!

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