Fiverr Forum

Potentially Major Development Regarding Chargebacks/Paypal & Fiverr


#1

I received an email from Paypal today explaining that they have

upgraded our Seller Protection to now include tickets, travel and services.

Why is this significant? Well, nobody really sells tickets or travel on Fiverr, however services are what most of us offer.
Below are quotes of some of the most significant parts of this link which explains things in full along with my own comments and explanations.

Paypal says they can “Protect Your Transactions” in the following 2 situations (The your in this case is Fiverr, not you. BUT, Fiverr represents you in the case of chargebacks).
1. Unauthorised transaction
A buyer requests a refund of an item or service, after claiming they didn’t authorise the payment. If the sale is eligible, our Seller Protection will reimburse you for the full amount.

2. Item not received
A buyer pays for an item or service, claims he or she didn’t receive it, then files a request for a refund. PayPal Seller Protection covers you for the full amount of the payment on eligible sales.

Paypal then says the process for chargebacks is as follows:

  1. If a buyer files a claim or in case of a chargeback or a payment reversal, we may place a temporary hold on the funds. (Then Fiverr takes this from your account)
  2. We’ll ask you to provide information including proof of shipping or delivery within the time frame communicated (usually 7- 10 days). (You need to submit this info to Fiverr Customer Support)
  3. You’ll be able to access your money as soon as we’ve determined that your transaction is eligible. (If successful, you get the money back to your account).

The list of product types that are and are not covered:

What can be covered by Seller Protection?
Physical goods (clothes, toys, electronics, car parts, etc.)
NEW. Services (yoga classes, website design, etc.)
NEW. Tickets (concerts, shows, sport events, etc.)
NEW. Travel (trip, flight or hotel bookings, etc.)
What isn’t covered by Seller Protection?
Items that are delivered or picked up in person
Digital goods (music, computer game downloads and licenses for digital content)
Claims or chargebacks arising from items being significantly different to how you described them
Payments not made through PayPal.

Furthermore, in the email I received, Logo Design was specifically mentioned.
To summarize, it seems like Paypal has decided to be a bit more conscious about digital SERVICES (Not Digital Products) which covers the vast majority of sales on Fiverr.

What you should do as a “Best Practice” situation:

  1. Make your gig clear - it needs to be clearly defined so there can be no disputing what is agreed - particularly important for Custom Offers where it is tempting to just say things like “as discussed” - DON’T, always be specific!
  2. When you deliver, make it clear what has been delivered and how it matches up EXACTLY with what was agreed.
  3. In the event of a chargeback, react quickly but calmly. Quote Paypal’s own rules to Fiverr Customer Support with links that back up your claim.

The full Paypal update page in case you missed it - https://www.paypal.com/IE/webapps/mpp/seller-protection
The full Paypal official Chargeback Guide (remember, only Fiverr CS can respond but by knowing how it works and what they need, you can help them a lot). https://www.paypal.com/my/webapps/mpp/security/sell-chargebackguide1

The info and opinions in this topic are my own and do not necessarily represent Fiverr, Paypal or any other third party. Always check with CS regarding procedures.


Unacceptable behaviour from a buyer (Shocked)
Can buyer make a dispute after two months of delivery
Buyers Have Gotten Worse
Can my buyers cancel their orders?
Question regarding high value sales
Cancellations after order automatically marked complete?
Fiverr has no security for sellers....?
Your Fiverr order was cancelled?
Beware of Fraudsters
Buyer cancelled order and took refund after 4 months from delivery!
#2

Heck yeah! 'Twas about time we got some protection from PayPal regarding our digital services!

I reckon this may come over the hand for Fiverr, as it will require them to deal with us and then with PayPal on each chargeback, but at least Fiverr wouldn’t give money from their own pockets to refund a seller when eligible, and instead takes the money from PayPal. As far as I see it, it’s a win both for Fiverr and [most of] us.

Thanks so much for this news/info, Eoin!

P.S. next up, banks! There still are buyers who use credit cards and do chargebacks from their bank accounts.


#3

Tiss time to start transcribing the president’s speech because the white house won’t ask for a paypal charge back


#4

I like to think that the development was CAUSED by Fiverr and other platforms putting pressure on Paypal but my glass is always half-full so who knows how it will change things.


#5

I don’t know how Fiverr works, but I used to work for a company that sold online services and we had a special team who handled chargeback disputes. If a customer used the service then we had every right to open a dispute to reverse chargebacks. Some disputes we won, some we lost.

So I was actually quite surprised when I saw posts claiming that Fiverr simply takes the money from seller’s account even after 14 days. That you may even get a negative balance and it will be taken out from the next order.

Hopefully now it will become easier and Fiverr will protect its sellers a bit more.


#6

The easiest way to avoid chargeback disputes is to hold funds in escrow like many other freelance market places already do. Fiverr presents itself as doing the same but doesn’t. If they actually did, chargebacks wouldn’t happen. Also, it is know that some buyers who have enacted charge backs and should by rights be banned, still operate freely here.

I personally can’t see this benefiting sellers practically. Fiverr generates most responses to seller queries automatically. While a human could say “hey wait, there is something wrong here,” an auto generated “we take our customer satisfaction seriously” isn’t going to do anything.

Great for PayPal to do this. Just said that they did it after Fiverr decided to go full robo.


#7

This is very gripping news, now my only question is will Fiverr adhere to the new developments? I guess only time will tell. I’ll check with CS, but I’m stoked that Paypal stepped up their game to protect sellers.


#8

Surely our protection is fiverr? People don’t buy directly from us and pay via PayPal. They order via fiverr and pay fiverr for our services. We receive payment from fiverr 2 weeks down the line.


#9

Yeah, sure, you get the payment and then a few weeks or months down the line you get a worrying e-mail from Fiverr stating that your buyer made a chargeback, and you realize that your balance is either less or negative. And why? Because PayPal allows buyers to do chargebacks up to 6 months or 1 year, I can’t remember which is nowadays.


#10

Sure our protection is Fiverr. Hence, the mystery of this new development. Personally speaking Fiverr is just one egg in the basket. Many of us operate businesses outside of the Fiverr platform dealing with Paypal. I’m just curious about Fiverr if they will go the extra mile for sellers on their platform.


#11

The thing is, the system has always been that Fiverr CS handles chargebacks and responds to the dispute IF the seller gives them the information.
However, the success rate, from what I gather, is quite low . My hope is that this declaration by Paypal (regarding digital services) is a step towards making it more likely for a successful dispute defense. When I had a chargeback of $100, I did everything I was supposed to do but I didn’t get the money back - from what I can tell it was an issue with proving the effectiveness of the service. At the time I checked out some stuff about chargebacks and found that outside of physical products, it was quite difficult to dispute them.

Now it seems there is a focus on changing that and the best way sellers can defend themselves in these situations is to know exactly how the system works so that they may direct CS on what to say to Paypal. It is also just nice to see Paypal doing something specific for Merchants in general as their focus has often been very much on the payer.


#12

Paypal didn’t just “step up their game to protect sellers”. Paypal appears all this while to be oblivious of transactions on freelancing platforms. They have rather openly backed and almost always encouraged chargebacks. This new development could only have come from demands Fiverr and other allied platforms had mounted over a long time now. This is a turningpoint. I saw this coming and Fiverr has no option but to abide. In all fairness, I think Fiverr has being doing its best to Sellers in chargeback incidences. For those with itchy chargeback fingers, kindly read my lips; ahead of you is a dead-end!