Thursday, April 26, 2012

Chargeback Fraud From International Buyers

Do you sell online? Have you heard of "chargeback fraud?"  Learn more about it at Paypal's guide to chargeback fraud. It is inevitable when you sell online, whether on eBay, etsy or your own website, that eventually the thieves will get you. We are fighting a case of it right now from a couple of international buyers. Or most likely it was one buyer doing both transactions.

According to Paypal: 
"While most buyers file chargebacks for reasons they believe are legitimate, there are criminals out there who try to take advantage of the system. The claims most often exploited for chargeback fraud are: A scammer makes a legitimate purchase - but claims the transaction was not authorized. A criminal pretends an item never arrived, or lies and says it arrived significantly different than it was described. Knowing about chargeback fraud helps prevent you from becoming a victim. It is also a good idea to familiarize yourself with the ways to reduce the risk of legitimate chargebacks."

Paypal had all types of ideas on their site to prevent this. In all honesty, the only help was for sellers who have a real buyer, who is not happy with the item they received or their package did not arrive. Not for sellers who had a buyer who intended to do an unauthorized credit card chargeback right from the start. An unsavory character, who you would not want as a customer. It was not helpful to prevent these types of chargebacks. I started  researching my own information on it. Chargeback fraud is a big problem for any business that sells online. Once one fraud buyer is successful, it appears that your name will appear on the national fraud list and they share it with others. Then you will get hit by more of them.

I read on eBay's International Shipping board yesterday that a lot of sellers were having to fight this type of chargeback often. One seller stated that he wins most of the disputes, but it is a pain having to deal with them so much. The reason we cannot fight them or stop them, is due to the fact that there is no way to report them to the authorities in their country or state. As of the present time, there is no way to have them arrested and charged for this crime. It is a crime. It is causing many sellers to stop selling internationally. On Paypal's and eBay's sites, they encourage you to sell internationally. They don't mention the chargeback fraud problem. Yes, it is also a problem  with US buyers also. It seems that right now it is more common with international sales.

I sell on eBay and I never sell internationally and I never will. I will not take the chance. I would not be selling from our website to international sales, if it wasn't for my husband. He likes doing it. We had some pretty good returning customers from France, Australia, Japan and some others. For now, he has set some new rules in place for international sales. The address of the buyer must match the billing address of the credit card. Then there are the free email addresses like yahoo and gmail to watch out for. Requiring a money order is another new addition. Now I have to research the type of money orders that are foolproof from international buyers.

Here is some other cases that I found and I feel sorry for them being out so much money.Chargebacks And How We Were Taken For $6K And How We Are Fighting Back. Our cases are not that amount of money but every little bit hurts. Not only are you out the cost of the product, but the expensive shipping charges that they requested (they usually pay for expensive shipping services). Chargeback Fraud - Customer Caught Red Handed (Finally!) is another post from the same site. Good information on both posts.

If you have a problem with chargebacks I hope you are able to figure out what to do. It seems online sellers are at the bottom of the totem pole in all ways these days. We are basically on our own fighting the buyers' credit card company. And the buyer can tell them anything. I always have the feeling they want to make fools out of US sellers. Not having Paypal or anyone else stand behind us sellers, makes us easy prey! Good luck!

Copyright © 2012 Kathleen G. Lupole
All Photographs Copyright © 2012  Kathleen G. Lupole unless otherwise noted


pelenaka said...

Very informative thanks.

Lisa Kling said...

Interesting post - I hadn't heard of this type of scam. Very informative - thanks! Found you on BlogFrog! - Lisa
The Business of Blogging

Sue said...

Hi, this is interesting. I used to sell books online on Ebay and I am glad I did not know about this at the time, or I would have been nervous about it. Fortunately, I did not have any problems, but this is great information to know.

ArtMuseDog and Carol said...

Same old story ~ the bad apple ruins it for everyone ~ Great post, kat ~ very current and informative ~ ^_^

Katherines Corner said...

very informative post, well done. Thank you for linking to the Thursday Favorite Things hop I hope you have a weekend filled with happy! xo

Jane Anderson said...

I have a friend who sells to international buyers so I'm really glad I came across this post. From what I know, she hasn't had any issues with charge back fraud yet but I will definitely let her know to take more precautions. Thanks again for the info!