As many of you know, I sell some of my premium wordpress themes at WP Theme Shop and people can pay for the theme using Paypal and download the theme immediately.

If a fraudulent person knows someone’s paypal user id and password, they can use it and download the theme. Since they entered the right user id and password, no one knows if this was entered by a fraud, and they can safely run away with the theme.

Now, that someone realizes this transaction is not done by him and disputes it with PayPal. Paypal is always on the buyer’s side and they pull the money from my account and give it back to the buyer and then everyone is happy !

Wait !

1. Paypal is happy as their only job is satisfy the buyer. Their Seller Protection Policy covers only products that can shipped. They do not cover intangible goods [like in this case, a wordpress theme].
2. The buyer is happy as he got his money back.
3. The fraud is happy as he got one of my premium themes without paying a penny and without getting caught.

but I am still at a loss here.
How do I prevent this from happening again? Please throw in your ideas to solve this issue.

Thanks.
Also Read:
Beware of these Paypal Payments !

8 Responses to “Paypal payment frauds – how do I prevent it?”

  1. Sarav says:

    Has this happened? How can someone steal someone else’s paypal id and password and shop themes with it? How would it be handled if he buys some service from Google or some big shots?

  2. Sadish says:

    Yes. It has happened to me a couple of times. Sometimes it could be because someone stole the other person’s credit card.

    and as far as I know, Paypal does not protect you if you are selling intangible goods.

  3. ru4real says:

    It’s so frustrating that the innocent party always seems to be the one who loses the most. Have you considered using Google Checkout? I really like the looks of their program.

  4. have you tried a 24 hour delay for purchases…? would that save you some fraud? How quickly do PP get back to you?

    Kenneth

  5. Sadish says:

    @ru4real,
    Google Checkout seems to be good option, but again they do not officially endorse selling intangible goods with it.

    @investorblogger,
    people can even dispute upto 45 days from the date of purchase. You can not make genuine people wait for 45 days to get the theme.
    Initially when I did not have the automatic delivery system built in, I used to manually send the theme files by email., but most people want to get their hands on the theme immediately.

    I think one possible solution is to send the theme to the email address they used for the paypal. I think even though if the fraud has gained access to the victim’s paypal account, they still might not have access to the victim’s email account [Unless people use the same password everywhere]. isn’t it ?

  6. Renee says:

    Sadish,
    It may be two friends working together on this scam: one person gives a friend his user id/password to purchase a theme through his account, and then claims this was a fraudulent purchase.

    You might get some ideas here: http://www.paypalsucks.com/ however, with non-tangible goods, you are in a very difficult situation. Even sellers with tangible goods are forced to jump through hoops: http://www.paypalsucks.com/paypal-seller-protection-policy.shtml

  7. BiGAlex says:

    You could let the buyer download the theme after clicking on a link sent via mail. So, the fraud must know not only the paypal pass, but also the mail one.
    Hope this helps 😉

    PS: Great themes! 😛

  8. siva says:

    Hi

    Ya now-a-days online frauds are increasing. If you wish we will help to find out…

    Thanks & Regards

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