As you can see in my latest Flippa auction, I now only use Escrow.com as a payment option for the larger sales. I used to allow Paypal, but after being burnt twice it is no longer a feasible option.
Check out my latest auction, a bundle of 66 apps.
For sales under $500 I generally allow Paypal, but for anything over that it is too risky.
In previous iterations of my blog I talked about Paypal chargeback scams. Unfortunately is is very difficult to avoid Paypal chargeback scams as laws are in place at the moment which allow people to do this.
When you receive a payment via Paypal where the buyer used their credit card to buy the transaction, they have 90 days to file a chargeback against you.
This happened to me and even though I was able to show that the current buyer was the who.is owner of the website, I lost the dispute. This is because the people deciding the outcome of the case is the financial institution who own the credit card (The buyer’s bank).
The buyer’s bank rarely side against their client. The client said it was a false internet charge, they accept it and give him back the money while he keeps the website.
To overcome this problem with larger sales, just use Escrow.com and accept the fee (which can be split between the buyer and seller).
Here’s how it works:
- Both parties agree to the sale terms
- The buyer sends Escrow.com the money
- Once Escrow receives the money, they instruct the seller to send the item(s)
- The seller sends the items
- The buyer accepts them
- An inspection period begins (You can agree to the length of this)
- At the conclusion of the inspection period, if the buyer has been happy with the good received, Escrow.com send the money to the seller
It can take a while to get it all done, but it’s worth it for a large transaction.
You don’t want to spend 3 months wondering if a buyer is going to hit you with a chargeback, which Paypal will take straight out of your balance/bank account as soon as the chargeback is filed.