Payment for online transaction

[MarkW]

Hi all,

Just wanted to ask how people take payments if they are selling coins online?

Have read a fair few stories of people being subject to chargebacks via online transfers and even using PayPal. In a number of instances I read about, PayPal's seller protection policy was not sufficient to cover the seller and prevent the credit card company from successfully reversing a payment, leaving the seller empty handed  

I have a coin listed for sale on this site currently and have specified that I would like a cheque payment, with the coin being posted out once the cheque has cleared. The obvious problem with this method, is that it shifts all the risk to the buyer. 

So, experienced traders, please impart your wisdom and knowledge 

Cheers!

 

Mark

[HelpingHands]

You're best with a bank transfer as they can't be reversed.

[Goldmick]

16 minutes ago, HelpingHands said:

You're best with a bank transfer as they can't be reversed.

Bank transfer is what I use safe and fast 

[MarkW]

Thank you both for the advice, much appreciated 

[SilverSniper]

On 6/4/2017 at 20:21, HelpingHands said:

You're best with a bank transfer as they can't be reversed.

Actually, they can be reversed, under certain circumstances.

[MarkW]

Ah ok, but perhaps more difficult than say a standard charge back on a credit card?

[SilverSniper]

24 minutes ago, MarkW said:

Ah ok, but perhaps more difficult than say a standard charge back on a credit card?

Tricky one.  The circumstances can include:
The bank made a payment without the correct checks that the funds were available.  In essence, they can get the money back to cover the bank's own interests.
Unauthorised payment (without the account holder's permission).
A mistake in the account details (paid the wrong account).
A mistake in the payment amount (eg. paid £1000 instead of £100, etc.).
It is suspected by the Bank that the funds within the outgoing account may be subject to being reclaimed by another bank/account or the courts/police.  i,e. placed there by dodgy cheque or suspect debit card, etc.

It is a much safer means of receiving funds due to the limited possibility of a chargeback, which credit cards and e-money companies (like PayPal) are subject to.

[MarkW]

I appreciate the information, thank you. I guess there will almost always be little loopholes that can be exploited by someone hell bent on operating online payment scams, but bank transfers do seem like the best option in terms of limiting exposure to a potential scam. 

[MarkW]

Ah yes very true, it's transfer of risk currently. I see a gap in the market here for an online payment system that removes risk for both buyer and seller .... for a small (but increasingly inflating) fee ?

[Pete]

2 hours ago, MarkW said:

Ah yes very true, it's transfer of risk currently. I see a gap in the market here for an online payment system that removes risk for both buyer and seller .... for a small (but increasingly inflating) fee ?

Isn't that precisely what PayPal provides ?

[MarkW]

Well yes and no. PayPal is more of a platform for making a wide variety of payments directly into other people's accounts.

I was thinking more along the lines of a very specific tool which would focus on a safer payment system for goods, (non reversible transactions etc) where money is paid into a holding account and sent to seller upon receipt of goods  as opposed to being directly paid into a user's account. 

But perhaps if it were possible to set something up which meant it were impossible to perform chargebacks and bank transfer reversals etc, it would have been done already? 

[Pete]

6 hours ago, shortstack68 said:

Only if you're an ebay buyer

Are you sure ? - PayPal provides seller protection as well per the following terms copied from PayPal

 

11. Seller Protection Programme

11.1 What is PayPal seller protection?

If you are the recipient of a payment made by a customer ("Payment Recipient"), we may reimburse you an amount for Claims, Chargebacks, or Reversals made against you based on the following reasons:

1. A Chargeback or Reversal was issued against you for the reason of an “Unauthorised Payment” (except for any “Unauthorised Payment” initiated in an environment not hosted by PayPal); or
2. A Chargeback or Claim was issued against you for the reason of “Not Received”,

where PayPal receives from you proof that the item was posted or delivered in accordance with the requirements set forth below, subject to the further provisions of this section 11 (including, without limitation, the Eligibility Requirements at section 11.6).

Please read section 13 (PayPal Buyer Protection) to understand how a Claim against you may arise.  If you sell or market to buyers in other countries, you should read the PayPal Buyer Protection policies of the countries in which your target buyers are based (the relevant PayPal Buyer Protection policies are available here and are also accessible via the “Legal” or “Legal Agreements” footer on most PayPal site pages) as these policies will apply to you as a Payment Recipient or seller.

Please also read section 5.3 (Risk of Reversals, Chargebacks and Claims) to understand the risk of Reversals, Chargebacks and Claims arising when you receive a payment.

 

11.2 Availability of PayPal seller protection

PayPal seller protection is available to

Payment Recipients with registered PayPal Account(s) in the Relevant Countries who receive PayPal payments from buyers making an eligible purchase (worldwide and everywhere PayPal is accepted).

PayPal seller protection does not apply to Claims, Chargebacks and/or Reversals for the reason that the purchase was Significantly Not as Described (SNAD) nor for items that you deliver or are picked up in person.

11.3 How much protection is provided by PayPal seller protection?

Subject to section 10.2j and this section 11:

a. PayPal will pay you the full amount of an eligible payment the subject of the Claim, Chargeback, or Reversal and waive the Chargeback Fee, if applicable; and

b. There is no limit on the number of payments for which you can receive re-imbursement under PayPal Seller Protection.

11.4 What happens when a buyer files a Claim, Chargeback, or Reversal?

PayPal will place a temporary hold on the funds in your Account to cover the full amount of the Claim, Chargeback, or Reversal. See section 10.1.d for further details about the temporary hold process.

11.5 If the payment is not covered by PayPal seller protection, PayPal will remove the funds from your Account and return the payment to the buyer. In addition, you will be responsible for PayPal’s Chargeback Fee, if applicable.

11.6 Eligibility Requirements

What are the eligibility requirements for PayPal seller protection?

You must meet all of these requirements to be covered:

1. The transaction is not ineligible under section 11.10.
2. The transaction must be marked by PayPal as eligible or partially eligible for PayPal seller protection on your Account “Transaction Details” page. If it is marked eligible, protection for both Unauthorised Payments and Item Not Received will apply. If it is marked partially eligible, protection for only Item Not Received will apply.
3. For tangible items, post the item to the shipping address on the “Transaction Details” page. If the item is delivered in person or if the Payment Recipient posts the item to a different address (for example, if the buyer asks that you send to another address on the basis that it is a “work address” or a “gift” address) then you will not be eligible for re-imbursement under the terms of the programme.

You may access the “Transactions Details” page by logging into your PayPal Account, selecting “History” and then selecting “Details” for the transaction.

4. You must follow the delivery requirements described below.
5. You must accept a single payment from one PayPal Account for the purchase.
6. You must respond to PayPal’s requests for documentation and other information that is reasonably required by PayPal to investigate the matter in a timely manner.
7. Your primary residence, as listed in your PayPal Account, must be in a Relevant Country.
8. Your eligibility is not otherwise suspended.

Eligibility requirements c. and d. above do not apply to any item for which you receive payment through the PayPal Location Based Payments Functionality, provided that you provide to PayPal proof (to PayPal’s reasonable satisfaction) that the item was collected by or delivered to the buyer.

11.7 What are the delivery requirements?

	Protection for Unauthorised Payment	Protection for Item Not Received
Postage requirements	For services and intangible items (in countries where such transactions are eligible for PayPal seller protection):  Proof of Delivery   For all other transactions: Proof of Postage (minimum) or Proof of Delivery	Proof of Delivery

11.8 What is “Proof of Postage”?

Online or physical documentation from a postal company that includes all of the following:

1. A status of “shipped” (or equivalent) and the date of postage
2. The recipient’s address, showing at least the city/county or postcode (or international equivalent).
3. Official acceptance from the shipping company (for example, a postmark, a receipt, or online tracking information). Or, if you have Proof of Delivery then you do not need Proof of Postage.

11.9 What is “Proof of Delivery”?

Proof of Delivery for tangible items means online documentation from a postal company that includes all of the following:

1. A status of “delivered” (or equivalent) and the date of delivery.
2. The recipient’s address, showing at least the city/county or postcode (or international equivalent).

Proof of Delivery for intangible items and services means any compelling evidence (as determined by PayPal) to show the sale was fulfilled, including but not limited to the following information:

1. The date the item or service was provided.

2. The recipient’s address (for instance, email/IP) where applicable.

11.10 What are examples of items/transactions/cases that are not eligible for PayPal seller protection?

1. For: 
   1. Payment Recipients with their registered address outside the UK: digital goods and licences for digital content.   
   2. Payment Recipients with their registered address in the UK: intangible items (including digital goods and licences for digital content) and services.
      Where PayPal in its own discretion may make certain intangible items (including digital goods and licences for digital content) and/or services eligible from time to time, unless otherwise agreed in writing with PayPal, the following will always remain ineligible:  
      1. Items equivalent to cash (including, without limitation, stored value items such as gift cards and pre-paid cards).
      2. Payments made in respect of financial products and investments.
      3. Donations.
2. Items that you deliver (or are picked up) in person (except for items for which you received payment through the PayPal Location Based Payments Functionality).
3. Transactions made through Zong, Website Payment Pro (PayPal Direct Payment and Virtual Terminal).
4. Claims, Chargebacks and Reversals for Significantly Not as Described and/ or claims filed directly with eBay.
5. PayPal Business Payments.
6. Payments made in respect of gold (whether in physical form or in exchange-traded form).
7. PayPal Mass Payment transactions

[MarkW]

The cases I read about where PayPal's seller protection failed to cover the seller involved the recipient of the item claiming that the item sent through was not as described. In one case, the buyer took delivery of a brand new phone, claimed the item was not as described and sent a knackered old phone back to the seller at which point his money was refunded. New phone, money in hand! Great deal. 

After a bit of reading about this scam it seems this seller was not alone, and others have also been left empty handed and unable to use Paypal seller protection to retrieve their money. 

A platform that requires the item and the money to be sent to a third party for inspection before exchange might be a way to avoid such scams but it would be difficult providing this kind of service for a reasonable fee. 

 

 

[Moi]

A service for high value items might be a runner. Either their own courier service, or contract where staff can verify the cargo at the sending stage. Extra tenner or so be worth peace of mind. Good for trade too as flimflammers are combed out. Can definitely see a gap there.