My Merchant Account Blog

People Sending One Cent via Paypal

Wednesday, October 24, 2007

Some people have reported receiving a $0.01 (one cent) deposit to their Paypal account.  The sender could be verified or not.  The sender could be from the United States or not.  The question is, do you want to accept this payment?  While finding a penny lying on the ground may be considered good luck, finding a penny in your Paypal account may not be so lucky.  Chances are that you do NOT want to accept this payment because the sender is probably trying to verify your e-mail address and / or establish a business relationship with you so they can sell your email address to spammers.

Verifying Your E-Mail

Once the person has verified your e-mail address, he or she can now add it to their list of valid email addresses and then sell the list to spammers.  Never accept money from someone that you do not know.  If you are like me and use a particular e-mail address for Paypal, you do not want anyone else having that.  This helps to prevent those phishing e-mails.

Establishing a Business Relationship

By accepting money from someone, you are establishing a business relationship with that person which helps to bypass any of the laws that are in place to help prevent some types of spam, junk mail, and junk faxes.

So before accepting that one cent, ask yourself how much is your e-mail address and / or business relationship is worth?

Merchandise Not Received

Thursday, October 04, 2007

This chargeback is one of the more common reasons.  Consumers order a product and then call the issuing bank to inform them and hopefully get the money back.  The issuing back will start the process for you, and usually will credit your account immediately while informing the acquiring bank and the merchant account provider to start the retrieval request and possibly charging you, the merchant, a retrieval request fee.

The easiest way to respond to this chargeback code 30 is to provide the merchant account provider with a signature stating the merchandise was delivered.  This is what the issuing bank will be looking for.  If you do not have this, it is very difficult to prove the product was received.  Some companies require a signature only over a certain amount - this might be something to consider as well.

Specifying a Date of Delivery

This is very popular with a lot of merchants, they want their customers to know when to expect the merchandise.  However, this can work against you.  If you tell the consumer the merchandise will be delivered on Wednesday but it was actually delivered on Thursday, the consumer has a reason for a chargeback. 

The issuing bank will not be looking for proof of delivery but looking for some type of an agreement from the consumer saying it is OK to be received a day later.  Send the consumer an email and get his / her response.  Maybe even consider a fax with a signature stating that it will be OK for the goods to be delivered one day late.

If the consumer keeps the merchandise, you have a case against the consumer.  You can contact the consumer informing them that you are going to sell the chargeback.  If you need help writing your Terms of Service to protect yourself and business and to have the ability to charge fees when you get a fraudulent chargeback by a merchant, contact Jeffrey Cohen.