Dealing With A PayPal Chargeback
Scammers on eBay and Amazon have been in the news a lot lately. Whether it was the couple that scammed $1.2 million from Amazon, using the two address method, or the return a rock method the reports seem to be on the rise.
I have to admit I have been extremely lucky on eBay and I had never had a run in with a scammer…until now.
Details of the Sale
As you may have heard Amazon had a pretty amazing sale on Kindles not too long ago. I even shared how I did selling them. Well, a week or so after posting my results I received a chargeback alert from PayPal.
When selling the Kindles I had run into a 3 different buyers with low or no feedback on eBay. Of course this is a huge red flag. I decided to be extra cautious with these buyers and document as much as possible. I took pictures of the Kindle’s UPCs next to the prepaid shipping form. The scammer in question had actually ordered two Kindles. I made sure to send him a message that both would be in the same box even though he bought them separately. He responded and agreed with combining the shipment, which made me feel like he was more legit at the time.
Turns out two of the three buyers started getting ratings over the next few days. It seems like they were legit buyers just starting out. The scammer never got another rating. I usually hold off giving feedback on anyone with a score under 10 until a few weeks after they receive their item.
PayPal Notifies Me of Chargeback
It had been a few weeks since the scammer received the item so I thought I was in the clear with my three eBay newbies. Then I received the email from PayPal that there was a chargeback on one of the two kindles that I sold to the scammer. He claimed that it was an unauthorized transaction.
Two things stuck out to me. The first one was that he filed the claim with PayPal and not with eBay. The second was that he didn’t file them both at the same time.
I jumped into action right away. I filled out the form on PayPal and submitted the following info:
- The tracking number.
- Date the scammer received the item.
- The pictures I took of the UPC and the shipping slip together.
- A screenshot showing the packing slip matched the PayPal confirmed address.
- A copy of the message that I sent about both being in one box and his agreeing to it. My thinking was that he may be trying to say he only received one of the two Kindles in the mail. And that may have been why he only did a chargeback on one.
- I also explained that I was a seasoned eBay seller and this was a 0 feedback buyer.
I am pretty sure that only proof of delivery was needed for this type of claim. But, in a situation like this I go with the “better safe than sorry” mantra.
At this point I decided to call eBay and alert them to the issue, because the first one to talk with a live agent usually wins. I wanted to make sure that eBay was aware of the issue and notate it on the second Kindle in case he filed that claim through eBay. The rep did clarify that once a person files a claim with PayPal they can not file a claim with eBay. The two companies seem to have a double jeopardy kind of rule.
A few hours later the chargeback on the second Kindle came through and I filled out the form and sent the same information as before.
Let the Wait Begin
I gave it 1-2 weeks and didn’t hear anything from PayPal. Thinking this would be wrapped up in a week I started to grow a little impatient. I decided giving PayPal a call wouldn’t hurt.
After a brief hold I was informed that the scammer actually filed the chargeback with their credit card company vs through PayPal directly. This made a lot of sense to me. It explained why the chargebacks came through PayPal and not eBay and also why they came hours apart.
The PayPal rep also informed me that the address on the credit card matched the verified PayPal shipping address. The scammer also had to go through PayPal verification to place the order. For once the PayPal loop was a good thing haha. And for the trifecta the IP address matched the shipping and credit card address. The dude was sunk!!!
I knew at that point it was just a waiting game until I would get my money back. PayPal still had a few weeks to respond to the credit card company according to the rep so it should be wrapped up by then. I received two identical emails a few days ago wrapping up both cases.
Most Annoying Part of the Ordeal
It is annoying to get scammed and you may think that having your funds tied up for three weeks may be the worst part. That wasn’t the case for me, it was only $70 after all. The worst part was that it made my account negative. And the two options to make the balance positive were not the best.
I could pay off my negative balance with a credit card which would post instantly but it would be billed as a cash advance. I am not sure why PayPal couldn’t charge the standard 3% but that wasn’t an option. The other option was a bank transfer but it would take 2-3 days to post, not ideal. I went ahead and initiated the bank transfer.
The very next day I ran into an issue when a PPDG sale was going on. PayPal would not let me complete the purchase with a negative balance. I was able to get two single gift card purchases done before I hit a wall. That is when my travel hacking brain kicked in and I transferred money from my wife’s PayPal account to my own. This wiped out the negative balance instantly. A friend or family member transferring the money to your PayPal account seems to be the quickest way to to deal with a negative PayPal balance.
At the end of the day the scammer lost and I won so chalk one up for the good guys! I know some will say I should cancel the order of any 0 rated buyer. I considered it but I didn’t want to risk a negative feedback rating from the preemptive cancellation. There is nothing in the eBay terms that allows this either. We all started out at zero at some point, and these were not expensive items, so I figured maintaining a 100% feedback score was worth the risk. It all worked out in the long run.
I would suggest keeping good records for any buyers with low feedback or any buyers that do not carry 100% feedback. It will probably come in handy at some point. I also think that winning these type of cases is much easier with eBay than it is with Amazon.
Let us know about your scammer stories in the comments and how it ended up working out!