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You shall understand Fiverr's stance towards payment chargeback if you haven't

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The ultimate guide to deal with PayPal chargebacks on Fiverr:

Sorry, there is NOTHING you can do when buyers file a chargeback.

Seeing so many sellers complaining unresolved PayPal chargebacks, I decided to raise the concern on Fiverr’s Twitter instead of contacting support. Here’s what they’ve come up with. It’s actually disappointing.

First time asking:

Any seller protection against PayPal chargeback? What if buyers create multiple ACs by proxies to order & charge back for free work?

Fiverr Official Answer:

This would be a direct violation of Fiverr’s ToS and the user would be banned permanently. https://www.fiverr.com/terms_of_service

Ask again hoping they don’t evade my question:

What if they bypass the ban by proxies, order, & charge back again? As chargeback always succeeds with Fiverr not responding to PayPal.

Fiverr Official Answer (Disappointing…):

As advised, this is still a Terms of Service violation. Please review under the Disputes section: https://www.fiverr.com/terms_of_service

As sellers (esp. new sellers), you shall understand the following:

  1. You can’t fight PayPal chargebacks.
  2. Buyers filing chargebacks will always win as Fiverr do NOT help you respond to chargebacks. PayPal will be in favour of the buyer as there is no response from the seller side.
  3. Your hard-earned money will vanish. Or you’ll have a negative balance if you’ve already withdrawn the money.
  4. Fiverr will only ban the buyer who files a chargeback through PayPal. They won’t do anything else to help you recover you lost time, lost money, and lost efforts.
  5. There’s is a chance the buyer will use proxies to register new accounts.
  6. They again get free work using PayPal chargeback.
  7. The cycle goes on and on.

    There is only one thing you can do. Preventing them from using your work by, for example, a DMCA notice. You can never get back your money.

    Could anyone share their experience if they have successfully reclaimed their money of a PayPal chargeback? As I haven’t read any forum posts talking about that.

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The problem is that this is (almost) unavoidable. The amount of either some type of insurance or other backup assets required to pay people back for chargebacks is enormous. Usually you get this kind of backing with banks and credit card companies who will cover you for identity theft, etc. Those places usually have a combination of insurance and/or some government backing.

The other problem for Fiverr and sellers is that banks and companies who have some sort of backing (Ebay) is that in order to do it, they require a lot of identifying information from their clients so they know payments and withdrawals are generally secure and valid. One reason both buyers and sellers like Fiverr is that you can retain a fair amount of anonymity. An average user who doesn’t get into trouble rarely has to provide much proof of identity.

They could do something about it by offering some type of preferred user status to certain users if they were willing to provide all that identification. Since they can’t offer that without breaking the original model, they’d have to charge you for it up front, charge you much higher commission (and processing fees for buyers) or something like that to reduce the number of people that get a funding guarantee. With the money they are already making and the number of regular buyers and sellers, why do it at all?

I’m not for or against the current method and I’m not defending anything. I’m just clarifying part of why the answer to the question of funding guarantees is currently “no.”

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  • 3 weeks later...

So fiverr are worrying about a lot of staff but not about protecting us from paypal users, great, now I’m afraid of doing any job now, some jobs require me spending some money, so like this I could spend money and effort and then the “paypal using” buyer can get a free work and his money back while I lose time, effort and money and fiverr do nothing about it, wow amazing fiverr, Great.

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That is an incorrect statment saying that they can create different accounts.

#1, They most likely will have the same Paypal ID, therefore Fiverr will be aware of that and terminate that account

#2 Paypal don’t just refund, if they do, they don’t do it to the same person on a continuous basis. Instead, they’ll contact their ban and request an in house consultation on to why he’s stealing (although very rare, legal action can be taken against him thru Paypal)

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Paypal has always been an issue. The reason is that they do NOT verify new accounts. People can create tons of accounts until they reach the level where they actually need to provide proof on who they are. I run a web shop that sells software and I get about 15 fraudulent orders per day. People just create new accounts, use virtual credit cards they buy in stores, order, credit card passes.

They contact the card issuer and claim their card was charged by someone and get the funds back. They don’t even complain via Paypal. They just go directly to the issuer and the issuer gets the money back from Paypal. Paypal of course gets it back from the seller, so there is nothing you can do sadly.

So the real problem is that paypal does not require verification until you reach a certain amount. I believe it is 1500 Euros in Europe, so it might be 2000 USD in the US.

Also, you can pay using paypal without creating an account. That way people just get a few virtual anonymous credit cards and have an even easier life.

Sad but true.

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