LifeinAsia - 3:33 pm on Sep 8, 2010 (gmt 0)
PayPal adds another layer of "communication" in the chargeback process. If a customer issues a chargeback, their bank issues the chargeback to PayPal. Then you submit your paperwork to PayPal, who forwards it on to the bank (or they may decide on their own not to dispute it and just accept the chargeback without your approval). If the bank rejects it, you lose- no appeal.
PayPal takes out a level of fraud prevention as well. Since PP handles all the transaction details, you are not privy to missing CVV numbers, address mismatches, suspicious IP of the transaction, etc. We had cases where PP happily processed transactions that we NEVER would have processed without additional verification. And guess what? They turned out to be stolen cards, the transactions were reversed, we were out the money, and there was nothing we could do about it.
It also depends on what you're selling. If you're not selling tangible products, PP's "Seller Protection" is worthless.