posted on October 10, 2000 10:29:32 AM new
There has been a lot of criticism lately about Paypal in this forum lately. What I would like to know is how you would design a Paypal type system to deal with both buyer fraud and seller fraud. For internet merchants who use a traditional merchant credit card account:
1. Buyer fraud is handled by letting the seller take the risk, absorb these costs.
[Internet merchants do not it seems want to require written signatures for charges]
2. Seller fraud is minimized by requiring bank references, checking credit reports, and the credit card processor can do chargebacks (use ACH and pull money out of merchant's account long after the funds were deposited). [If you ask around you will find lots of internet merchants rejected by their local banks for merchant accounts and going to specialists instead.]
So critics, please tell us a system design to deal with these problems (note the huge number of small part-time sellers using Paypal for example--how do you minimize fraud from these sellers?).
posted on October 10, 2000 12:03:37 PM new
I think I would just eliminate the taking of credit card transactions. I would suggest that the buyers do a cash advance to their own checking accounts and then transfer the money into their electronic account or use a some type of credit account that checks are issued from. This would leave the banks to deal with the credit cards.
As far as buyer protection - there's already a good system for that - it's called feedback.
There has been a lot of criticism lately about Paypal in this forum lately. What I would like to know is how you would design a Paypal type system to deal with both buyer fraud and seller fraud.
I don't care really what type of system they use. The thing you are missing and where the criticism is coming from is how they handle things. Read carefully: They restrict accounts without notification. They will not or are very slow at returning email. They will give you no reason for the restriction (other than there has been a complaint) or any information about the status of the investigation. When you call them they just give you the run around. When the investigation is over they say things like "the investigation is over and your money is confiscated." Giving you no reason for it or any proof of wrongdoing.
This is and excellent system wouldn't you say?
I can provide you with links to multiple threads here and elsewhere to back this up.
[ edited by outoftheblue on Oct 10, 2000 01:26 PM ]
posted on October 10, 2000 01:49:27 PM new
PP's problem lies in the stupid decision to allow charge backs in the first place.
Sellers can't choose their buyers. Sellers cant even reject a paypal payment. It goes right into their account and they have no idea what CC it came from. Buyers should know who they are buying from. They should check the seller's feedback, ask questions, etc. Buyer's remorse is a far more common problem than seller fraud. If you have read any of those articles about fraud on the net, they all said that only about 1% of the complaints involved real fraud. The rest involved buyers who just didnt understand the process or made assumptions and were unahppy. So you look at the situation and say:
"If we side with the sellers, 1% of the complaints will be justified. If we side with the buyers, 99% of the complaints will not be justified."
PP decided to side with the buyers. THis opens them open to thousands of unjustified complaints. That was stupid decision number one. Stupid decision number two was to do it without any real plan in place. Then I lose count of how many stupid decisions led to:
-employees who make up the rules as they go along
-whole accounts restricted instead of just the disputed amount
-restrictions without the seller even being contacted
-restrictions that go on for weeks with no resolution or explanation
-charge backs that go back months - to a time when charge backs weren't even allowed
Paypal CHOSE to do all this. They could have very easily avoided it by forcing customers to fund their account first and make payment second (like Paydirect) so charge backs wouldnt even be allowed.
Now that Paypal shot themselves in the foot (and the stomach and the arm) can they do anything NOW to make it safe for sellers? It's doubtful. But a bigger question is: Are they even trying? http://www.ygoodman.com [email protected]
posted on October 11, 2000 09:02:35 AM new
cassiescloset: Though PP has its share of problems, you cant blame them for your mistake. You refunded the buyer before getting the item back. What do you expect PP to do? Send a few goons over to collect? If you had mailed her a check, would you expect your bank to go to her house and collect your item for you? This is not a PP issue. You naively trusted someone who turned out to be a crook. http://www.ygoodman.com [email protected]
