Issues with Paypal - Need advice

[shilgupt]

I need some advise from those who are using Paypal to accept payment.

I use Paypal for accepting payments for job credit and Resume view subscription.

In Resume Subscription, I provide Unlimited number of Resume Views per month.

There have been few incidents recently where a customer subscribed for Unlimited Resume Views, using Paypal. System has automatically provided him access. Customer utilized the Resume access services for complete subscription term. And just a day before subscription renewal date, he not only cancelled the subscription but also filed a chargeback for amount already paid, giving the reason "Unauthorized Use". Paypal also reversed the payment immediately and open a dispute case.
In this way, customer has utilized the Unlimited View Resume subscription services for full one month and has not paid anything.

Paypal policy also says that if there is no tangible good to be shipped then seller protection is not there. It means, using paypal for "services" (instead of "product") is at the risk of seller.

Few Employers are taking advantage of this and we have no way to confirm that payment will not reversed in future, before enabling the "View Resume" option.

I would like your advise on how to prevent such actions from customers? Is there any way that the payment received should not be reversed unless confirmed by seller.
Any other payment gateway that provides better protection for seller?

Looking for your valuable advise.

[WileyHunter]

There have been few incidents recently where a customer subscribed for Unlimited Resume Views, using Paypal. System has automatically provided him access. Customer utilized the Resume access services for complete subscription term. And just a day before subscription renewal date, he not only cancelled the subscription but also filed a chargeback for amount already paid, giving the reason "Unauthorized Use". Paypal also reversed the payment immediately and open a dispute case.
In this way, customer has utilized the Unlimited View Resume subscription services for full one month and has not paid anything.

Paypal policy also says that if there is no tangible good to be shipped then seller protection is not there. It means, using paypal for "services" (instead of "product") is at the risk of seller.

I would suggest talking with a lawyer.

From my point of view (and I tend to use the common sense viewpoint) is that BOTH the subscription and the ads are a product and not a service. Computer data has been held (by US Courts) as tangible product in several cases, and unfortunately I can't quote specific case history.

So again, find a lawyer.

[shilgupt]

Thanks WileyHunter.

I have written to Paypal about this incidents. Please see the reply I got from them --

"Intangible/virtual goods and services are not covered under the Seller
Protection Policy.

If a seller chooses to engage in transactions not covered by the Seller Protection Policy, the
seller assumes the risk associated with the transaction, as well as any chargeback liability.

There is a link to our User Agreement from the bottom of every PayPal
page."

FAQ on Paypal website also says that Seller's Protection is available only if there is physical shipment sent to a physical address, so that Paypal can use that as proof of delivery.
It means, paypal does not consider online subscription as tangible product...

I am clueless what can be done to prevent these in future? 

[Katherine]

Hi,

I'm studying law at the moment and was interested in the contracting intangible goods. There are no protection available for intangible properties like software and online sale of services. It is unfortunately a copyright issue too.

I asked my lecturer about it to confirm and basically - there is no settled law in this area, but there is a lot of obiter (judges comments to say it simply:) and it all suggests that online supply of services and mass produced software such as Microsoft Word etc do not come under the Trade Practices Act 1974 (Cth) (Australia only) because it is not a good, and it is not a service, it is an intangible item. Hence why we cannot sue Microsoft for selling us useless products :-) But also leaves the seller of online memberships no where. This is applicable to common law countries (Aus, UK, USA, Canada, South Africa)

It is not legal advice, but I would go with the payment through the bank, not paypal. If you read Jamit Board Terms and Conditions the similar issue is raised there - no refund for the purchase of Jamit Job Board, because it is intangible item. Thus if you work directly with the bank, rather than paypal you remove the refund issue if your customer agreed to the terms of no refund (just make sure that prior to payment they "agree"to that - Pressing button "I Agree" is sufficient to create binding contract and allows no comeback after the payment is made for the things covered within the contract.

Good luck