Manage disputes

Managing and Preventing PayPal Disputes for Digital Products

This documentation outlines best practices and tips to reduce disputes and improve transparency. Always try to resolve the issue directly with the customer and encourage them to withdraw the dispute.

However, if you encounter a dishonest customer, you can maximize your chances of winning the dispute by providing strong evidence.

1. Dispute Prevention: Key Steps

A. Detailed Product Descriptions

  • Clearly explain what the client is purchasing (e.g., "1,000 game credits").

  • Specify the delivery method (e.g., "Automatic delivery within 5 minutes after payment").

  • Mention if it is a subscription.

B. Non-Refund Policy

  • While the non-refund policy is already present during checkout, add another message on your store's homepage in the "About" section in MY SETTINGS. Extend your non-refund policy to cover cases such as bans for cheating. Example:

    "By purchasing a product from this store, you agree that this digital product will be delivered immediately and waive your right to withdrawal. Refunds will not be granted if you violate server rules."

C. Post-Purchase Steps

  • Provide clear instructions on what the client should do after payment (e.g., "Type /claim on Discord to get your credits").

D. Visible Contact Links

  • Add a link to contact you in your store in case of any problem, you can add this in MY SETTINGS.

2. Responding to Disputes: Steps and Evidence Required

A. Identifying the Dispute Type

Disputes are typically classified as:

  1. Item Not Received

  2. Item Not as Described

  3. Unauthorized Activity

B. How to Respond to Each Type of Dispute

1. Item Not Received

  • Evidence to provide:

    1. Delivery proof: A screenshot from Tip4Serv showing payment details and executed commands.

    2. Non-Refund Policy: A screenshot of the checkout page.

    3. Server Logs: If possible, server logs proving the receipt of the product.

  • Sample Response:

    "Hello, this is a digital product that was purchased on [purchase date] and delivered the same day, as shown in the attached proof.

    Additionally, the customer waived their right to withdrawal and refund by purchasing this product (see attached checkout screenshot), as it is a digital good that has already been consumed. We cannot issue refunds.

    Kind regards, [your community name]"

2. Item Not as Described

  • Evidence to provide:

    1. Delivery proof: A screenshot from Tip4Serv showing payment details, the product name, and executed commands.

    2. Non-Refund Policy: A screenshot of the checkout page.

    3. Server Logs: If possible, server logs proving the product’s usage.

  • Sample Response:

    "Hello, the purchased product is a digital item [product name] ordered on [date] and delivered on [date].

    The product matches the description on our store: [store or product URL]. Attached are the delivery and usage proofs.

    Kind regards, [your community name]"

3. Unauthorized Activity

The customer may dispute the payment with their bank. You need to provide PayPal with evidence that the customer initiated the payment.

  • Evidence to provide:

    1. Delivery proof: A screenshot from Tip4Serv showing the customer’s IP address, the product name, and executed commands.

    2. Non-Refund Policy: A screenshot of the checkout page.

    3. Purchase History: If the customer made multiple purchases, provide their purchase history to demonstrate consistent consumption behavior.

    4. Server Logs: If possible, server logs with the customer’s IP address can also help you win the dispute.

  • Sample Response:

    "Hello, this is a digital product that was purchased on [purchase date] and delivered the same day. The IP address collected during payment confirms that the customer initiated the payment (see attached proof).

    Additionally, the customer waived their right to withdrawal and refund by purchasing this product (see attached checkout screenshot), as it is a digital good that has already been consumed. We cannot issue refunds.

    Kind regards, [your community name]"

C. Select "Digital Goods" on PayPal

When responding to a dispute, ensure you select the option indicating the order concerns a digital good. This helps PayPal understand the product cannot be returned and was consumed instantly.

3. Summary of Evidence to Prepare for Disputes

Type of Evidence

Description

Example File

Delivery Proof

Details showing that the product was delivered immediately post-payment

Non-Refund Policy Proof

Screenshot of the non-refund policy visible during checkout

Server Logs

Logs showing the product’s usage by the customer

Purchase History

Purchase history demonstrating consistent behavior

4. Activating PayPal Chargeback Protection

A. What is Chargeback Protection?

This service protects eligible merchants against chargebacks for:

  • Unauthorized transactions.

  • Items not received.

B. Eligibility Criteria

  1. Have a valid PayPal Business account.

  2. Comply with PayPal's delivery and general policies.

  3. PayPal may offer this protection after a certain period of account use.

C. How to Activate

  1. Log in to your PayPal account.

  2. Go to Settings > Payment Preferences > Risk and Fraud Management.

  3. Activate "Chargeback Protection."

5. Best Practices

A. Stay Professional

  • Respond calmly and factually to disputes.

B. Provide Clear Evidence

  • Annotate your screenshots to guide PayPal or Stripe.

C. Prevent Disputes Upfront

  • Display reminders about non-refund policies and provide easy access to contact options.

D. Respond Quickly

  • Submit your evidence promptly to increase your chances of success.

By following this documentation, you will be better prepared to prevent PayPal and Stripe disputes and effectively defend your position in case of an issue.

Tip4Serv will never charge you any fees on a payment that has been refunded due to a dispute, even if you choose to initiate the refund yourself.

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