Money Minute: Chargebacks, and Disputes, and Reversals. Oh my!
In the streaming community, anytime someone attempts to get money back that they have paid to a streamer, the term “chargeback” is often used. But more often than not, especially when dealing with PayPal, there are many more terms that need to be understood, because in not every instance is the word “chargeback” appropriate.
There’s a difference between a chargeback, a dispute, a claim, and a reversal on PayPal. The vast majority of the time, if a person tries to reclaim their money on PayPal, it will be via a claim, dispute, or reversal. Lets look at each of these in a little more detail.
In a dispute, PayPal emails both the buyer and seller, and opens up a dialogue on PayPal between the two parties in an effort to resolve the situation. Since this happens on the PayPal website itself, PayPal keeps a record of the dialogue and analyzes it if the dispute gets escalated to a claim. If the buyer and seller can come to a resolution during the dispute where either the buyer gets refunded or agrees to let the seller keep the money, then the dispute is closed. If neither party can agree, it gets escalated to a claim.
A claim is decided by PayPal, often with evidence supplied by the buyer and seller, or records from a dispute dialogue. PayPal analyzes the information, and rules in either the buyer or seller’s favor.
A reversal comes in when someone attempts to recover money from a charge that was made with a bank account. This differs from a dispute because it is often used in cases of unauthorized use. PayPal works to resolve these situations with evidence that is supplied by either side.
In the case of disputes, claims, and reversals on PayPal, if the seller loses the claim, there are no additional fees. Only the original amount is lost.
Chargebacks, however, are a different story.
A chargeback happens when someone asks their credit card/debit card provider to return money from a charge. This is almost always in a case of unauthorized (aka, fraudulent) use. This can occur on both PayPal or through a payment processor, such as Braintree or Stripe. The key here is that the person went through their credit card company in an effort to recover the funds, which is different than someone simply pressing a dispute button in PayPal in an attempt to get their money back. Chargebacks, true chargebacks, end up costing the seller additional fees, sometimes even in cases where the ruling is in the seller’s favor.
So now that we know a little bit more about the types of payment disputes, how can a streamer fight them?
One of the easiest ways I’ve found to win a PayPal claim or reversal is to prove that the person received something. This makes it hard for streamers sometimes, especially when they call it a “donation”. Have something that you give to them, even if it’s just something simple and intangible like channel points/currency in return for their money. If you can say that you gave them something, it helps your case. It’s an exchange of goods (even digital) for money. Try not to think of it as a donation.
Originally published at blog.gamewisp.com. Apr 5, 2016 9:42:43 AM
