Afraid of chargebacks

Discussion in 'Server & Community Management' started by sebasju1234, May 30, 2017.

  1. Hey everone,

    In the past few weeks, I've been thinking about creating my own server network. I have almost 5 years worth of server management and plugin development experience, but there is one issue that I'm facing. I am afraid of chargebacks - especially those through PayPal.

    At the moment, I don't have a fulltime job but I have the money to own a medium-size server. Because I want to develop something fun and unique, I'm planning to dedicate a lot of time to the server. Donations will come in handy for me to support my financial situation. However, I've read that PayPal gives you a $20 fee for each succesful chargeback.

    Is it actually a good idea for me to start working on my own server? How many players donate to you each month and what % of them actually charges the money back? Can you actually win the chargebacks easily?

    Thanks in advance,
    Sebastiaan
     
  2. Thanks for your comment.

    I guess I'm scared of them because of my (indirect) experiences with them. I know some people that, for example, have bought virtual currencies for games with PayPal and charged their money back succesfully - not once, not twice, but maybe up to ten times. People can be that retarded.

    If I do create my own server though, I'll keep the money on my PayPal account until it's not possible to charge it back any longer - that's 60 days after the donation, isn't it?
     
  3. BuyCraft has a pretty good anti-chargeback protection for the major players, if someone charges back another server/network under BuyCraft, buycraft records that data and you can set thresholds to prevent people from purchasing just by going off their record on other networks.

    Also its a very small number of people that actually chargeback, assuming you don't make ranks that are badly advertised so people get annoyed.

    Even disputing with good evidence mostly resolves in your favour. Not really anything to prevent you from actually making a server, there are bigger issues like advertisement which are more of a realistic fear to get into MC servers.
     
  4. I think thats actually 120 days if Im not mistaken. But like I said, propper legal documents should prevent chargebacks. PayPal chargebacks were hell not too long ago, I think they improved stuff. Not fully shre though.
     
  5. Thank you. If I'm allowed to ask - could you maybe explain how you usually dispute chargebacks? (if you've had some)
    Advertisement shouldn't be a big problem for me though, I've worked on the servers for large (dutch) YouTubers in the past and I usually still get in touch with them. They don't have a server any longer and they should be willing to help me out. So that's sorted :p
     
  6. I myself never had any but I heard PayPal simply contacts both parties. When they do, you simply send evidence of everything. Him paying for it, him accepting terms of use, the terms of use itself, etc. That's the part where you proof yourself and you win 99% of chargebacks.
     
  7. I have a third party company that handles my chargebacks, cant let just any kid with a plan to get their money back use my services!

    The best way to stop chargebacks is a screening process that makes sure they are adults, or own the card they are using.
     
  8. How can you make sure people are adults (or have parental permission) or make sure they own the card? I mean, people fake everything. We all have that "I am 18+ or have parental permission" checkbox and we all know who clicks it. Exactly, kids under 18 without parental permission. Do you have this on a Buycraft website or something? If so, please link it :p
     
    • Agree Agree x 1
  9. The 20 USD fee is just if u want paypal to try to "WIN" the changeback
     
    • Funny Funny x 2
  10. JamesJ

    Supporter

    As I was tagged by @MrDienns, I guess I should give my thoughts on this.

    Ultimately, chargebacks are a part of owning a business. I can file a chargeback on the pizza I bought the other day from Dominos saying it was unauthorised, I can chargeback on my recent watch I bought over the internet. It has nothing to do with owning a business online or customer face-to-face.

    Should you be scared or afraid of them? No.
    Should you be well prepared to fight them? Yes.

    First, let's get this clear. A good Terms of Service/Terms and Conditions will not save you. Especially in a chargeback. ToS are hard to enforce, to start with, and a lot of 'self-written' ones, are barely legal and hence unenforceable.

    Secondly, let's make a clear definition between a chargeback and a dispute. A dispute is a payment that was made directly through PayPal, using your PayPal balance. These disputes bear no fees nor penalties. However, a chargeback is a claim made by the customer's bank (in 99% of the cases on behalf of the customer) to PayPal to reverse the payment. These do bear a fee, and in some cases account suspension if you get too many.

    Why the $20 fee? Banks are fuckers, to be completely honest. It's like PCI Compliance, PCI Compliance does very little to actually protect bank customers, just means that VISA and other companies can charge people who use their services without PCI Compliance. So, when someone reverses a payment, banks take this opportunity to make some extra cash and charge the other bank (in this case, PayPal) usually $100. As PayPal want to keep its customers, they take 4/5ths of the hit and reduce the fee to $20.

    Furthermore, percentage wise. It depends on what sort of community you have. If you have a toxic community, you'll probably experience more chargebacks & disputes compared to a family friendly vanilla server.

    Ultimately, don't be scared, be prepared instead.
     
    • Winner Winner x 4
    • Informative Informative x 2
  11. Have a winner rating, as always :D
     
    • Like Like x 1
  12. Very good reply. Thank you for this one.
     
    • Like Like x 1
  13. Hi,

    Chargebacks are just another part of owning a business. I have won 9:10 of all my chargebacks and have a effective way to do so, I plan on posting a thread on it once I get the time. You should be prepared by having a tracking method in place (collect IP address, address and email on checkout) so in the event the player files a chargeback, you can use that against him.

    Thanks,
    Faraaz
     
    • Like Like x 1
  14. It is a $20 fee for chargebacks through a card issuer, aka a bank, building society, or credit card company. Disputes created on PayPal do not incur a fee.
     
    • Like Like x 1
  15. Doesn't Buycraft simply do this?
     
  16. It does, but some people use Minecraft Market (which when I used, didn't), Enjin or maybe their own stand alone donation platform.
     
  17. Make sure you understand the different account types with PayPal, and what happens when you reach a certain amount - you might need to validate your id after say $2500 total in transaction in EU when they need to verify it's you for tax reasons. And you might have to make sure you dont offer goods, but a service, or that sort of stuff, so they can't chargeback on "item never delivered" because digital items are harder to get a chargeback on because you can show your evidence they received the goods.

    We have a person on the network deal with creative build servers, and a full unlock through a premium account is what ppl pay for, just to support the server, blah blah .. they had more than a couple, and in a few situations ppl got confused about what they got for their donation and wanted their money back, a link to the already existing page and a review from paypal and those were resolved.

    My experience with a service where we provided a theme product, unrelated to minecraft.. as soon as people got the new version of the .xml file and some other dev stuff, they charged back, it was almost 50/50 .. even with the evidence that we delivered, paypal simply said the card used was fraudulent, and we were out of the money. We went with a sponsor instead, and made the product free. The support of the sponsor was more money that year than the product purchases the year before, and dealing with the chargeback nonsense.

    In both situations we were happy that we had a unique bank account unrelated to our personal stuff, and a paypal that was made for the site, and not our personal paypal. This made it easier to get reports for tax reasons, as well as an organised overview of fees, costs, donations, gifts, purchases, etc.
     
    • Like Like x 1
  18. I have experienced a lot of chargebacks.

    There are disputes and claims made through PayPal. These are quite easy to win if you provide as much information as possible. Terms and conditions, IP addresses, transaction information, etc.

    Then there are the chargebacks executed through the bank. Those charge a 20 USD free every time and I have never won any of those. It is always the same reason: “Intangible goods or services are not covered under Seller Protection” No matter how much information I give them, I never win and apparently the bank is the one to take the final decision. The bank support their client instead of some online seller.