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Less Fraduelant Orders With Paypal?

versus normal credit card transactions

     
8:37 pm on Jan 4, 2004 (gmt 0)

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I've been using Paypal for my international orders because I've always thought that it would be harder to set up a fraudelant Paypal account than simply typing in stolen cc #'s. I haven't had any problems at all with fraudelant orders.

The reason I'm questioning my reasoning now is because I just received an order from France for $200 (1 item), and I just want to be sure it's not fraudelant. (Most my other items are $40-$50 so not real big of a deal if I lose one. Larger items different story.)

The buyer is verified. However, Paypal doesn't confirm addresses in France, so I can't confirm the address.

I wouldn't worry it normally, but the customer just asked me to declare a lower amount on the customs form for taxes.So now I am questioning the order.

Any thoughts?

Thanks!

11:56 am on Jan 21, 2004 (gmt 0)

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One point, under declaring the value for customs or sending invoiced goods as a gift is International mail fraud. They will come after YOU, not the buyer.

I always refuse such requests, no legitimate buyer would ask for such a thing, it raises a big red flag for me.

If you export, read up the customs regs. There are some pretty hefty fines you can face.

12:27 pm on Jan 21, 2004 (gmt 0)

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> under declaring the value for customs or sending invoiced goods as a gift is International mail fraud. They will come after YOU, not the buyer.

Exactly.

The document that YOU sign is a legal document for customs in YOUR country, not the destination. YOU are committing a 'crime' against your own customs department. It is not fraud against some little country across a big pond, it is similar to tax fraud.

---

I have manged to go one whole year with WorldPay without a single chargeback, through being careful, blocking IP's and other information and using their pre-auth feature. Fraudulent orders are still attempted, just not processed - so it never appears on any credit card statements - I don't get the money, so I don't get a chargeback, if I decide not to process the order.

Never had a problem with PayPal, but these transactions are significantly less than PayPal orders.

I stopped sending orders internationally and stick solely to the UK now, due to international fraud (Nigeria, Uganda and the US being the worst in my case - never had any enquiries from Indonesia at all, but Uganda and Nigerian enquiries happen on a daily basis).

Further, I limit the amount the customer can order on the internet and request a phone call order for orders over a particular amount. It is interesting how you see them attempt to order 100, then 50, then they work it out and they order 13, because it is the maximum they can order!

I may be restricting some buyers, but as it takes a while to get the money to pay my suppliers, it also helps ensure that I am not getting too many large orders to sink the business.

4:32 pm on Jan 21, 2004 (gmt 0)

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If you want to insure the item for the actual amount ($200), you can't declare its customs value as being anything less.
8:05 pm on Jan 21, 2004 (gmt 0)

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>>So... Is there any other viable alternative? <<

CIBC/American Express have a CC product called the entourage card that contains smart chip technology. Members have a usb device that reads the CC and only allows transactions to take place if the user PIN is properly entered and communicates directly over an SSL line.

Unfortunately while it's been out for over a year now it hasn't been well promoted so very few customers have it. Further the system is purely to increase consumer confidence as they still only consider proof of sale as being; 1) CC imprint, and 2) a matching signature. This is the crux of the matter as this, until someone shows me otherwise, is the only thing that is truly considered when it comes to transaction disputes.

With that in mind it's not the fault of paypal or any other 3rd party, but the Visas and Mastercards themselves. These companies have a great thing going (consumers are confident and merchants wholey responsible) and at this point in time there is really little incentive for them to change.

8:33 pm on Jan 21, 2004 (gmt 0)

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> direct credit card processing are less than paypal

If you're going to compare services with Paypal, please use one that offers the same benefits. We're not talking about manually processing credit card transactions - we're talking about real-time online payments. Real-time means paying for credit card gateway and higher rates than phone/mail order merchant accounts. You also forgot to mention that merchants accounts often have startup fee, monthly minimums and annual fees.

8:57 pm on Jan 21, 2004 (gmt 0)

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You also forgot to mention that merchants accounts often have startup fee, monthly minimums and annual fees.

I did NOT forget. I did not mention it because not all merchant accounts have a start up fee, monthly minimum and annual fees. Yes, many do, particularly the shady ones that so many ecommerce merchants end up with. But not the ones I mentioned.

Paypal, to me, is a way to accept payment online, plain and simple. If you are looking for paypal's alter ego, then I can see your point. But either way, MOST people use paypal as a way to accept CREDIT CARDS, so I don't understand how a direct merchant account is NOT a good comparison.

And yes, with my internet only rates that are obviously still higher than people who make card present transactions, they are STILL lower than PayPal fees.

Once you start doing volume, the $20-30 you pay for a gateway is nothing compared to how much more you pay for PayPal transaction fees AND the fact that you don't deal directly with the merchant bank when it comes to chargebacks.

9:48 pm on Jan 21, 2004 (gmt 0)

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Hi,
I am using PayPal since 2001 to sell tangible and intangible items. I have never had problems with PayPal.
Reading forums like this one makes me wander - am I just lucky and problems are waiting to happen?
For my opinion, problems with credit cards processing always exist. Big and small retail stores face fraud and returns every day. Customer can always say that he/she didn't like what they get and call their credit card to stop payment. I prefer not to fight with the credit card ( or PayPal). If customer is not happy with my product or service or I gave them a chance to trick me - it is my fault.
5:35 am on Jan 22, 2004 (gmt 0)

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For the record, there are now a myriad of websites that exist for no other reason than to post people's complaints about PayPal and warn others away from the service.

All hearsay of course... but more solidly, there are currently multiple class action lawsuits against PayPal and it's extremely likely that some of them are going to win.

You shouldn't have much trouble finding all of the above with a few searches.

The one thing that everyone seems to agree on is that PayPal has terrible customer support... Which is really the only problem.

It's good that internet payment services are unregulated for the most part. We all know that the internet has become what it is today because lawmakers have been largely unsuccessful at analizing :-P it so far. If only PayPal had the common sense not to take advantage of that fact... As things are, legislation isn't far off.

6:16 am on Jan 22, 2004 (gmt 0)

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I think fraudulent orders have more to do with what you sell and less to do with what form of payment payment you accept.
6:31 am on Jan 22, 2004 (gmt 0)

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The most unsettling allegation made on these complaint sites is that PayPal will freeze your accouny if someone makes a fraudulent purchase. Sometimes account are frozen indefinitely with thousands of dollars in them. I wonder if anyone have had this happened to them.
4:11 pm on Jan 22, 2004 (gmt 0)

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I would like to hear the opinion of anyone doing more than minimal volume with PayPal. Say, for the sake of argument, 100+ orders per day.

The only large PayPal user I know of ran into all kinds of problems with PayPal as his monthly volume got over about $100K US.

MQ

P.S. For my 2c, I have been generally pleased with PayPal, but I only use it for occasional sales and eBay. I've never processed more than about $15K/month through it, but at those levels it was still working well. My reasons for using regular merchant accounts on any substantial business have been lower fees and the fact that I find the look and feel of the PayPal checkout a bit cheesey.

4:15 pm on Jan 23, 2004 (gmt 0)

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We just had our first ever chargeback from PayPal. The person was a verified US member with an unconfirmed shipping address. The value was low and the goods ordered were not that resellable. Therefore this was surprising.

I thought verification was quite a secure process. Could somebody tell me how the crooks get through this.

4:44 pm on Jan 23, 2004 (gmt 0)

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> an unconfirmed shipping address

That's how. No seller protection with an unconfirmed shipping address. There are other ways, but I'm not going to spell it out here. :)

6:22 pm on Feb 6, 2004 (gmt 0)

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MansterFred and my forum friends,

I think that type of service is already provided by some CC Companies I believe.

Maybe I don't understand what your talking about? Can you maybe clarify?

As an online merchant Visa has already implemented a program that will block your fruadulent chargebacks 100%, and mastercard is scheduled to follow suit by November.

If fraudulent chargebacks (national & International) are your main concern, maybe I can help.

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