paypal chargeback: how paypal gets the money back

[sjuhawk_jd]

If a buyer disputes a paypal (Credit card) payment and the credit card company agrees with the buyer, then buyer gets the money back on his/her credit card. Assuming the seller withdrew the paypal money before the dispute started, how does paypal recovers that money (assuming the seller is keeping no money in the checking account for paypal to tap into).

 

[DeniseM]

First of all, make sure the checking account has NO overdraft protection - or you will get an overdraft when they charge your checking Acct.

Also, if you have a credit card linked to the PP Acct., they can and will charge your card.

 

[BocaBum99]

That's a risk they bear. They need to come after the seller for their money. Since they probably have the owner's social security number and they definitely have their bank account, it's not a good idea to stiff a financial institution or intermediary. That can damage your credit.

If you have a charge back, you need to deal with it. Trying to stiff Paypal is not going to get you out of hot water. In fact, you could be in bigger hot water later by not dealing with it. If you accept a credit card payment from Paypal, you need to accept the risk of charge back. If you are not willing to accept that risk, don't accept the credit card.

If you accept a credit card payment and stiff paypal because of a chargeback, I hope they come after you and kill your credit so you can never take a credit card payment again. It's people like that who cause transaction fees to go up for everyone else.

 

[am1]

That is right. If there is a chargeback it needs to be dealt with. Just think of the complaining if Paypal starting holding back a certain amount for 3 or 6 months. That could be their next step if people start walking away from their debts.

 

[ronparise]

pay Pal has my bank account and they will go to it if there is a charge back.

 

[ampaholic]

If a buyer disputes a paypal (Credit card) payment and the credit card company agrees with the buyer, then buyer gets the money back on his/her credit card. Assuming the seller withdrew the paypal money before the dispute started, how does paypal recovers that money (assuming the seller is keeping no money in the checking account for paypal to tap into).

It sounds almost as if you are worried that PayPal's business model might fail.

If so don't loose too much sleep over it - they are doing OK.

 

[sjuhawk_jd]

That's a risk they bear. They need to come after the seller for their money. Since they probably have the owner's social security number and they definitely have their bank account, it's not a good idea to stiff a financial institution or intermediary. That can damage your credit.

If you have a charge back, you need to deal with it. Trying to stiff Paypal is not going to get you out of hot water. In fact, you could be in bigger hot water later by not dealing with it. If you accept a credit card payment from Paypal, you need to accept the risk of charge back. If you are not willing to accept that risk, don't accept the credit card.

If you accept a credit card payment and stiff paypal because of a chargeback, I hope they come after you and kill your credit so you can never take a credit card payment again. It's people like that who cause transaction fees to go up for everyone else.

This was hypothetical question, so no worries. However, with such high number of foreclosures going on in this country, there must be several million people in this country with their credit in the toilet, so "threat of credit" may not be a deterrent for many dead-beats, just a thought.

 

[persia]

It's the same way that credit cards cover stolen card transactions, it's part of the price of doing business. It all works out in the end for Paypal, they lose a few bucks in one place but more than make up for it in another.

Ultimately they can ding a person's credit, but the amount is usually too small to try to collect in small claims court. They can't just pull it from your bank account unless you allow them to.

Bottom line is that you and I and everyone who uses Paypal pays for it in increased fees and interest.

 

[funtime]

We used paypal complaint procedure to good effect

My sister and I had to dispute a $400 paypal chargeback last year though the paypal complaint procedure. We were renting a timeshare for specific dates and the buyer just did not pay enough attention to the rental. And, of course, the buyer came late to the timeshare - the days she had actually needed - and then wanted the dates changed. Of course, no can do.

Since most of these sites are buyer friendly, I thought we were goners even though we were clearly in the right. But my sister went through the complaint procedure. Luckily we had not only emails that showed the dates we were renting but had specifically put the dates of the rental on the paypal invoice (good to put details on your paypal invoice!). My sister's determination paid off and the paypal complaint procedure worked and Buyer's claim was denied. Funtime