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Protecting Against Paypal Chargebacks

Jaed Le Raep

Jaed Le Raep

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Recently I was taking a look at the cost of advertising on otservlist and realized that they have a measure to protect against Paypal chargebacks and that's by requiring photo identification of everyone that wants to make a purchase of their gold currency.

The difference between OTServlist and OTs is that OTServlist can actually legally CHARGE for a service that you pay for, rather than you're DONATING to an Open Tibia server, sort of like it's charity. Have you guys seen OTs take any effective and efficient measures to combating the fraud that many OT players take part in?

I have the ability to go as far as dealing with my lawyer to write up a legally-binding agreement that I could present to paypal for all donations. But even then there's the legality that you can't really legally bind a person to a "DONATION" they've made (under most U.S. and international laws), and if an OT developer was to try and legally make donating to their server more-so a purchase of services, then they could find themselves on the receiving end of a lawsuit from Cipsoft.
 
Then change the phrasing from "donating" to "purchasing virtual goods (such as coins.)"

Requesting photo identification probably helps in situations where the buyer states they didn't authorize the payment, to which Xinn can send to PayPal, "then why did they send me their photo ID?"
Also, PayPal handles international payments differently depending on where the "buyer" is from. For example, a transaction like: buyer from Brazil -> seller in USA will likely have a different (unfavorable) outcome as opposed to "USA -> USA".

To dismiss the nearly inevitable hassle, you can request photo ID from players from certain countries and/or only accept payments from PayPal users with verified accounts. The best way to "block" a payment (there is no way to do so via PayPal, because, fuck the seller, amirite?) is to create an exception in your payment processing code on your website to not add points to payments from PayPal accounts where the buyer is located in a certain country *except* if they're on your whitelist (provided photo ID.)

Disclaimer: This next statement isn't from a standpoint of racism / hate; I'm only stating from personal experience (which I've had quite a bit of.) I say this because a lot of payments coming from Open Tibia players in these countries are often too young or unable to get a credit card / PayPal account and it is far more risky to accept a payment from them. So, unless you have photo ID from your buyer...

I suggest blocking Mexico and Brazil.
Red
 
Red said:
Then change the phrasing from "donating" to "purchasing virtual goods (such as coins.)"

Requesting photo identification probably helps in situations where the buyer states they didn't authorize the payment, to which Xinn can send to PayPal, "then why did they send me their photo ID?"
Also, PayPal handles international payments differently depending on where the "buyer" is from. For example, a transaction like: buyer from Brazil -> seller in USA will likely have a different (unfavorable) outcome as opposed to "USA -> USA".

To dismiss the nearly inevitable hassle, you can request photo ID from players from certain countries and/or only accept payments from PayPal users with verified accounts. The best way to "block" a payment (there is no way to do so via PayPal, because, fuck the seller, amirite?) is to create an exception in your payment processing code on your website to not add points to payments from PayPal accounts where the buyer is located in a certain country *except* if they're on your whitelist (provided photo ID.)

Disclaimer: This next statement isn't from a standpoint of racism / hate; I'm only stating from personal experience (which I've had quite a bit of.) I say this because a lot of payments coming from Open Tibia players in these countries are often too young or unable to get a credit card / PayPal account and it is far more risky to accept a payment from them. So, unless you have photo ID from your buyer...

I suggest blocking Mexico and Brazil.
Red
Click to expand...

The only chargebacks i've had were from these 2 countries unfortunatly.. It sucks that it happens, but i made a block on mexico as of 30 mins ago.
 
With blocking Brazil and Mexico (on Paypal), do you know if there's a payment option in their territories that would be safe for the seller to use?
 
Add a line to your paypal ipn so that if anyone do charge back it will remove their account and ban the latest ip of the same account?
 
The difference between donating and buying is that the donater has no right to get his money back and most likely won't if you know what you're doing when fighting the chargeback.
On the other hand, if a buyer wants a refund of his money hes most likely gonna get it if you're shop says "Buy points" instead of "Donate" you've messed up.

Paypal doesnt protect the seller if somebody buys viritual goods from you
 
Jaed Le Raep said:
With blocking Brazil and Mexico (on Paypal), do you know if there's a payment option in their territories that would be safe for the seller to use?
Click to expand...
If they have paysafecard(.com) use this :)
 
You are not allowed to refer to it as a donation if you are giving anything back in return according to international rules and regulations, it is considered to be false advertising and may result in a chargeback by the operators. Thus, it seems to be a big gray zone regarding this matter since some major companies (e.g indiegogo) seem to be giving gifts back to those whom support their projects. However, what is the motivation behind wanting it to look like a donation so badly, is it because of less chargeback possibilities for the sender?

Source - https://secure.zaypay.com/site_requirements_guide
 
Chechlowski said:
You are not allowed to refer to it as a donation if you are giving anything back in return according to international rules and regulations, it is considered to be false advertising and may result in a chargeback by the operators. Thus, it seems to be a big gray zone regarding this matter since some major companies (e.g indiegogo) seem to be giving gifts back to those whom support their projects. However, what is the motivation behind wanting it to look like a donation so badly, is it because of less chargeback possibilities for the sender?

Source - https://secure.zaypay.com/site_requirements_guide
Click to expand...

https://en.wikipedia.org/wiki/Donation
"A donation is a gift given by physical or legal persons, typically for charitable purposes and/or to benefit a cause. A donation may take various forms, including cash offering, services, new or used goods including clothing, toys, food, and vehicles. It also may consist of emergency, relief or humanitarian aid items, development aid support, and can also relate to medical care needs as i.e. blood or organs for transplant. Charitable gifts of goods or services are also called gifts in kind."

You can refer to it as a donation because you give something to the person who does donate and is called a 'gift in return'

If you do not call it a donation you will 93% most likely experience a chargeback. Due to its nature of being a donation where the player supports the server and also accepting the terms of service that one should have and for the donator getting a gift back there is absolutely no way he/she can get the money back unless you do not answer the chargeback request. Theres a much bigger chance of winning the chargeback if you do call it a donation rather than calling it a payment where the buyer actually does buy something.
Chargebacks should not happen at all. The thing about Paypal is that if the chargeback happens and you have already withdrawed the money You will be in debt by paypal and they can actually take legal action against you. This has happened over a hundred thousand times if not a million times to several people across the globe who used Paypal. A lot of people from otland who has used paypal has gone -1000 USD if not more in minus because people can donate several thousand dollars over a couple years and then decide to chargeback because he/she did not call it donations or were simply unaware that the chargeback request was already happening.

Thing is, the reason why paypal wants you to give up your real information is that if you ever were to go in minus they will send you bills, and threats that they will take legal action if debt is not paid (Tho this not being the only reason it is one of them)
 
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