Owner of an online business doing his own item deliveries with PayPal

[Saroyan]

Hello. I am not particularly sure if this forum is the right place to ask but I hope somebody can provide me with some help. My case is very simple - I want to open a website selling certain goods and deliver them through my company instead of using a delivery provider like usps, ups, FedEx.

However in the past I experienced a lot of fraud alerts from customers trying to get their money back stating they did not receive the product they paid for. In which case PayPal asks for confirmation of delivery. Obviously a tracking number for the online service of a delivery company solves everything. The problem is that I want to do my own deliveries. Which makes things more complicated when I get to prove a delivery with PayPal.

I emailed them and asked what is the best way to prove to which they replied that I should try and find a easy tracking system to buy and set up on my server for my deliveries. However any system running on my server can be manipulated so I don't see how this is going to prove anything. Anyhow is there anybody who works with PayPal and does their own deliveries? If so what do you do when somebody claims he did not receive the product that he paid for? Please and thank you.

[topr8]

what do you mean, your own deliveries?

[topr8]

slightly OT, but i have a face to face business and europe is now chip and pin with credit cards, when i have an american or other foreign card that still has a signature i take a photo of the customer, it has cut back on fraud completely.

i also hand deliver some products that are ordered from the website from reasonably local addresses ... i get the customer to sign a form on receipt (also film the event) i've never had credit card clawback from this method.

[Saroyan]

I want to sell goods through my website and then do the deliveries on my own.

As to what you suggested. I can easily get the customer to sign a delivery paper but then how is PayPal going to know it was the customer to sign and I didn't just sign my own papers? Even if I film the event, how would they know what the customer looks like. I had dealt a lot with PayPal in the past and they don't like jumping into big drama or so it seems. They want to solve and verify things fast and swiftly. It's not like they are willing to open a whole investigation to see if the delivery actually happened. That's why I am trying to see if somebody found an easier solution to deal with frauds on their own deliveries.

[Kendo]

There is no difference between your signed delivery receipt and that of a third party delivery service. Both can claim that the owner did not sign. A photo taken of the person, if legal where you are located, can add a lot of credibility. You can do this with a mobile phone that date stamps with lattitude and longitude.

[dpd1]

So you actually send someone from your company to the people's home/office... and hand deliver it face to face... and then they have the nerve to come back and say you never gave it to them? How often does this happen? Have people really become this dishonest?

I suppose you could use a legal proof of service document... get them to sign that, then scan it and send to PP. I don't see how they can't accept a document used in courts. If it's good enough for court, it should be good enough for them.

[Saroyan]

@dpd1 - I worked in a company where we sold software to people online. After using the software for months they would complain to their banks they did not authorize the transaction and take their money back(we had proof of the usage but still lost every case).

They often complained to PayPal for the same reason within a week of usage or so. So yes, they do that. PayPal wouldn't care to investigate a case of signature or a photo taken with the item. How would they know this is an authentic photo/signature. They are not willing to open a court case which would be something the merchant will have to do. It costs money, takes years, it's not worth it for $100.

[LifeinAsia]

Sounds to me like the only choices are:
1) Take the risk with PayPal and assume you'll lose most, if not ever, dispute
2) Not accept PayPal for payment

I lean strongly towards option 2. (We stopped using PP for general payments years ago because of many reasons similar to this discussion- PayPal's unwillingness to accept concrete proof related to the transaction and the likelihood that we would usually lose in any disputes from buyers.)

[Kendo]

PayPal wouldn't care to investigate a case of signature or a photo taken with the item.

This not the case. In your example there was no signature collected at any time and if there was then it could have been submitted in response to any claim made.

For customers to claim a charge back there is a process where they formally submit the claim and then you have the option of accepting it or challenging it in which case you can then submit supporting documentation.

Paypal does look at that supporting documentation. They also look at the history of the customer and the vendor and despite the fact that too many people purchase via Paypal because they believe that their policy favours them so much that they can simply make a false claim and get away with it, I can tell you that in ten years we only ever had one claim awarded against us and that was the first one after which we learned how to properly submit a counter-claim with supporting documentation.

[Saroyan]

You are correct we did not have signature present. However how is PayPal to verify a signature exactly? And taken it's from a photo/scan. I doubt they have the time and money to hire a specialist to make a confirmation if the document is authentic or not for every $50 order. That's why I said they would not care and would rather avoid it. Thanks for your opinion, I respect it but I am looking for somebody who went through the same problem.

@LifeinAsia, can you suggest a payment processor in this case? We worked with several different but I must tell you that PayPal was the friendliest. The $20 fee after a chargeback for a $30 hurts a lot. At least that one can avoid with PayPal.

[LifeinAsia]

At least that one can avoid with PayPal.

I've never heard that they eat the chargeback fees (if a person pays with their CC instead of payPay balance, then disputes the charge).

I don't have an alternative suggestion- we pay a chargeback fee like everyone else with our processor. But at least our ratio of winning chargebacks with our processor is far greater than our ratio with PayPal.

Granted, our volume with PP was substantially less than regular CC processing, so the few disputes made for a much greater effect. But the mentality of PayPal pretty much made it clear that further disputes would end the same way: "You're not selling a covered product, therefore you're not covered by Sellers Protection, therefore you lose."

[Saroyan]

In which case can you name your payment processor? I won more cases with PP than with our payment processor. That's why I am asking, if I am to replace PP I would rather go for a payment processor different than the last one.

[Kendo]

I am looking for somebody who went through the same problem.

In our first year of online sales we had more than 50% of all sales come back as charge-backs for a variety of excuses, the most popular being that their credit card was used without authorisation.

At the time we had our own payment processor directly linked from our server to our bank and we also used Paypal. After requiring signatures for all purchases over $25 no charge-backs were approved by the bank who could clearly see that the signee on the claim form was the same as the one on our sales agreement. So that fixed the problem with our bank but we still had a problem with Paypal and their protect-the-client policy.

But like I said, since learning how to properly submit a challenge for a claim we had no problems. Yes, we still get claims and yes some Paypal users think that they have the right to cheat, but none are awarded a charge back. Now this may be partly due to the fact that we have a history of doing things correctly, providing sound goods and not challenging justified claims.

Today we are most comfortable with Paypal and after comparing the fees charged to those of our bank, on new projects we recommend and use Paypal only.

The fact that you do use a signatory system will dramatically reduce the number of attempts to charge-back from the onset.

[Saroyan]

Kendo, thank you for the insight. Can you tell me - how do you require signature online exactly?

[LifeinAsia]

In which case can you name your payment processor?

Elavon (formerly NOVA).

[Kendo]

how do you require signature online?

Our online ordering system, whether using our bank or Paypal, presents a sales agreement at the bottom of our transaction confirmation with instructions for printing, signing, scanning and emailing the signed agreement. A copy is also sent by email.

Although we do not specify the format, most signed agreements are returned as PDF and some as JPG. In all cases we print a copy and keep a hard copy with a copy of the invoice for 6 months. We print these to confirm that they can be used because on odd occasions we have reveived PDF with print disabled, in which case it becomes difficult to forward to Paypal if needed.

We have required signed agreements for all sales over $25 since 2000 and sometimes we get complaints... but only from those that we suspect wanted to cheat and in those cases we simply cancelled the order.

Now this protects you from claims of unathorised card use and with software or Internet services they have signed to confirm that they have indeed tested the online demos/trials so they cannot claim falsely advertised goods or that they didn't work on their computer.

But this offers no protection against claims that the goods may have been damaged in transit. That part could be handled by your delivery guy.

[Saroyan]

Thank you very much to both of you.