It devastates me to say that one of my customers has committed fraud.
My goal here isn’t to name and shame this person (a book blogger, which actually makes me even more sad). My goal is to shed some light on what can and does happen to sellers every day. In fact, my husband showed me a huge topic on Reddit where people shared their experiences.
Someone bought my theme, downloaded it, then issued a chargeback with their credit card company
I sell pre-made WordPress themes. Due to the digital nature of these themes (there’s no way to “return” them) I have a no refund policy.
I also have a web hosting business. If you sign up for that hosting, you get my themes free.
A blogger purchased my WordPress theme
A book blogger purchased my Tweak Me v2 theme for $69. Shortly after, this person signed up for a hosting account with me. She asked for a migration from Blogger to WordPress as part of it. Then she emailed me saying:
“Hi! I bought the tweakme2 theme and was wondering if you could install it on my blog.”
So she probably bought the theme, not realizing it already came free with her hosting.
At the time, I hadn’t realized she’d only just bought it. If she’d bought the theme, used it elsewhere, then moved to my hosting, I wouldn’t have provided a refund at all. However, she’d only just bought it like a day beforehand and hadn’t used it anywhere else.
Even with that in mind, she wasn’t entitled to a refund because of my “no refund” policy. However, if she’d said something, I probably would have been understanding and given her a refund anyway. But she didn’t say something, and I didn’t realize how close the purchase times were until later.
But it’s important to see that she bought the theme, downloaded the theme (saved it on her computer), explicitly told me she bought the theme, said she wanted to use it, and was not entitled to any kind of refund because of my policy.
One month later, she claimed this was an “unauthorized purchase”
Almost exactly one month later, I received this email from PayPal:
Dear Creative Whim,
We’re writing to let you know that one of your buyers opened a chargeback with their card issuer. The buyer stated that they did not authorise this purchase.
And immediately, the $69 was removed from my account, pending an investigation.
I’m not sure what was going through the customer’s mind one month later. Maybe they woke up and realized that they could have gotten that theme for free and didn’t need to buy it. So then they decided to take matters into their own hands and get their money back. Or maybe they looked at their credit card bill and didn’t remember what the purchase was.
Either way, they would have remembered or realized eventually because I emailed them to ask why they did it and they never responded.
So anyway, I proceeded to pour over my BUCKET LOADS of evidence.
- I had payment records from this same person on two different systems (one for the theme, one for hosting).
- The IP addresses and billing addresses of both purchases matched. And yet one was supposedly “unauthorized” but the other wasn’t?
- I did a geolocation lookup on the IP address and it matched the billing address perfectly.
- I had logs (with IP addresses) showing that the customer downloaded the theme. Several times.
- I had an email from the person’s PayPal email saying, “I bought the tweakme2 theme”. Was their PayPal account hacked too? Probably not.
In short, I had an OVERWHELMING amount of evidence proving that this purchase was completely legit and would have matched PayPal’s IP address/billing records for this same person.
This customer committed fraud
So by telling their credit card company that they didn’t authorize this purchase, when they so obviously did, they committed fraud. That’s illegal.
I handed over all the evidence to PayPal
I sent them screenshots, logs, detailed explanations… all of it. A few days later, I received another email from PayPal containing this message:
The disputed amount has now been debited from your PayPal account because of the following reason(s):
This transaction is not marked as eligible for Seller Protection.
In addition, you have been debited a chargeback fee.
Despite my OVERWHELMING evidence that my customer committed fraud, PayPal chose not to do anything about it because I’m not eligible for Seller Protection. Why? Because I sold a digital good. Does this suddenly give people the right to BREAK THE LAW and get away with it? How ridiculous is that?
And to take things even further, I was charged a $20 “chargeback fee”. So I lost the $69 from the sale and then had to pay $20 out of my own pocket, because someone else decided to lie and commit fraud.
PayPal’s unwillingness to see the facts and fight is ABSURD
It’s so stupid that you can have so much evidence, just to be met with a brick wall. And it’s so stupid that PayPal is choosing to protect buyers of digital goods, but not the sellers. The sellers are the ones making people money, so we should be offered protection.
I eventually called PayPal to complain. The case was now marked as closed, but obviously I was not happy.
Without me even having to ask, PayPal kindly reversed the $20 fee. Clearly even they could see that this customer was obviously committing fraud. They then told me that they couldn’t do anything since I wasn’t covered under Seller Protection (SIGH) but they have sent all the evidence to the credit card company, who will be running their own investigation. If they don’t respond back within 75 days then I should have my $69 returned.
What can we do to stop this from happening?
Honestly, I would have LOVED to take this person to small claims court. It’s a case that I would obviously have won, and I want to see people like this face the consequences of their actions. You cannot lie and commit fraud and expect to get away with it. That shouldn’t be how the world works. You lie, you face the consequences — that’s how it should be.
But alas, if I wanted to take this to small claims, I’d have to do it in this person’s state, which means actually flying to the United States. I don’t think that’s worth it for a $69 item.
At the very least, I’m hoping this customer’s credit card company drops them. Then at least they’ll face some kind of consequences.
I am looking into other payment options
I’ve started looking into other payment options because I’m unhappy with PayPal’s policies. I shouldn’t be put in this situation because they’re too lazy to protect sellers against fraudulent claims. I’ve been looking into options like SagePay, Stipe, WorldPay, and more.
I want a payment option that will actually stand by me when I have an overwhelming amount of evidence. I want one that isn’t afraid to fight to protect their sellers and the law.
But at the same time, I’m worried about losing customers who only want to pay with PayPal. Is that a risk I’m going to have to take in order to ensure this doesn’t happen again?