Commission Chargeback- The situation and solutions

14 min read

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CoastHarbour's avatar
Hey everyone. I'm making a new journal as the other one is messy. So, for this journal, I'm first going to go into details on what happened to me (I realize that I told some of you already in detail on what happened, in the comments, but not all of you), and then I'm just going to share some helpful journals and advice on how to avoid chargeback situations and what to do if you fall victim to it. It's a stressful situation and it's even worse when you don't have any idea what to do, so for the sake of the community and other artists, I'm making this journal. If you already know the real details about my situation, then feel free to skip down to the advice section. I implore all of you to read the journals that I linked at the bottom of this, if you haven't before seen them. It's very important information for artists who do PayPal/money commissions.


My Situation:

Earlier this week, on September 3rd, I logged into my PayPal account and found that my balance was suddenly at -$67.36, when before the balance was at $0. The reason for this sudden drop was that either Inderfinity or her mother had contacted their credit card company and claimed that the purchases they made were unauthorized. PayPal opened up three cases, as Inderfinity had commissioned me twice, and I had 10 days to respond to the cases to defend myself and provide any evidence that I could to prove that the buyer had received what they wanted. I wrote to PayPal and explained in detail what happened; I provided screenshots of the notes that Inderfinity sent when she ordered the commissions, the feedback she gave me when I completed the commissions, a link to my TOS, and a file attachment of the completed commissions. During the course of this week, I kept in contact with Inderfinity and she has replied to my notes and answered most of the questions I sent to her. She admitted that since she is too young to own a debit or credit card, that she was using her mother's credit card to pay for commissions and a dA membership. Unfortunately, I haven't received an answer yet on whether Inderfinity's mother was aware that her daughter was using her card on these things or if Inderfinity asked her mother for permission to use the card, but this leads me to believe that this is indeed what happened. A few days later, on September 8th, I logged into my PayPal account to check on the balance and saw that it had decreased to -$85.72. This amount would have been worse, but someone had sent me $20 as a donation to help me, so before it was -$40+. Either way, it decreased significantly. I checked my PayPal email and saw three emails from PayPal stating that they would email me updates on cases at a later notice. I checked on the status of the cases, and they were marked closed, and PayPal did not send me emails stating that the cases had been closed. I did research today and found out that the balance decreased because PayPal charges an additional fee to sellers once they open a chargeback case. I don't know yet what the percentage fee is, but they do charge a fee, whether the seller is at fault or not. After more research, and after conversing with a dA user who had experienced a chargeback situation like this last year, it became clear that screenshots are not deemed as solid evidence by PayPal to dispute a chargeback case; evidence such as proof of shipping would be ideal to provide to PayPal to win chargeback cases. Therefore, I'm hopeless now and do not think that I will get this money back, seeing as I can only provide screenshots and nothing else. That's all I have to say about my situation. This is what happened and calling PayPal will not resolve this situation, as they will most likely just say what I know now: that screenshots are not enough evidence and that they can't do anything about the chargeback at this time. Additionally, my balance is no longer in the negatives because my friend insanitystudz sent me the money to cover the negative balance. However, I will be opening collaborative commissions with Squidub in an attempt for both of us to make up the money we lost.

I want to clarify that I am not going to call Inderfinity a scammer, as I don't have legitimate proof that she is one. This is just an account of what she told me and my personal situation. Yes, Inderfinity is the buyer and I would advice you to beware on accepting commissions from her, just for your safety and to prevent a situation like this to happening to more of you. Do not harass her, do not send her death threats, and do not send her hate. At the moment, people are just spreading rumors that she is scamming; there is actually no proof that has been found that she really did scam the people that were involved. Again, I am only providing the username of this individual because I want to prevent situations like this to happen to more people. On a side note, I moved the commissions that I made for Inderfinity to storage. It's a shame that it had to come down to that, since I have never before moved any of my deviations to storage.

On another note, other users who have fallen victim to this situation this week are SquiduboAzuLJoAzreonn and din0mite. I wish you best of luck and it's terrible that this had to happen to us. If you have any more details or information on this situation, feel free to note me.


Fighting a Chargeback Case

If you find on your PayPal that you have been filed with a chargeback, and you know that the reason for the chargeback is false, you do have the choice to fight it! PayPal will need proof of the situation, and unfortunately, they typically do not accept screenshots as valid proof. This is why it is important to create some type of contract when you are selling a product to a customer. Just providing PayPal with screenshots of emails, notes, etc. will most likely NOT help you weigh the case in your favor. Though, there are cases where it does help; for example, when I dealt with my chargeback, I provided many screenshots of the notes that Inderfinity and I exchanged; though at first PayPal did not accept these as proper proof that Inderfinity had indeed commissioned me, it eventually was helpful because Inderfinity had made a chargeback against four other users, and all of our situations were the same. So, if multiple people are suddenly found dealing with a chargeback by one user, screenshots could possibly be helpful. 

Some valid forms of proof of transaction would be:
Proof of shipping
Contract, signed by both the seller and buyer 
Some sort of document to proof that you have sold something to the buyer

Unfortunately, fighting a chargeback can be a lengthy process. It took months for my situation to finally be solved; the case opened and closed several times. Just when I thought it had been officially closed, it reopened again for me several months later and I had found that I had won one of the cases and was given back about $60. You may not always win all cases; for example, I had been commissioned by Inderfinity twice, so they claimed two chargebacks against me. I only won one of the two cases. Therefore, I only won back the money I had earned from one of those commissions. You will need patience if you're dealing with this :(

Precautions to Prevent Chargebacks or to Resolve Chargebacks

As I mentioned previously, I did research and found some very informational journals about how to keep your digital sales safe and to prevent chargeback situations. Additionally, the user that I was talking to earlier gave me advice on how to better prevent this situation from repeating itself. 

  • Do not accept payments from users under 18 years old. If you suspect that they are underage, it would be wise to refuse. It would be ideal to accept payments from individuals who are old enough to have their own credit or debit card. And be very careful about accepting payment from young individuals who are using their parents credit cards!
  • Before accepting a user's payment, search their username on Google. If there is evidence that this user has scammed before, do not accept their payment.
  • Be careful about selling to empty accounts.
  • Be careful about selling to users who have recently joined dA, unless they have moved from a previous account.
  • Create a terms of service (TOS)
  • If possible, create a physical copy of the commission or thing you are selling and mail it to the buyer. Keep any proof of shipments in a safe place. And keep the tracking number and any proof of delivery.
  • Do not send or post a file of the completed commission until you have full payment.
  • Use invoices to request payment. 
  • Do not accept payments through "Friends and Family". You can risk getting fined by PayPal if you do this to avoid the fees they charge.
  • Keep in mind that should a chargeback case open, PayPal charges a fee to the seller once the case closes.
At the moment, these are all the solutions that I can provide. These are measurements that I will put in place from now on to prevent this situation from happening again. This is absolutely the worst issue I've had with commissions and I do not ever want to go through it again. I want to warn you that these measurements will not 100% protect you from chargeback situations; but following these steps can definitely increase your chances of winning a chargeback case and getting your money back. Especially if you have proof of shipment of a tangible good to the buyer, that will most definitely ensure that you win the case. Be careful with who you accept payments from. 

If anyone has more advice or suggestions to share, please comment and I'll feature your comment. And feel free to spread around this journal for others to see to prevent this situation or to help anyone that is experiencing it, too.

Here's some very helpful journals on this matter:
A probable solution to commission chargebacks.Artists who create commissions know one caveat with accepting PayPal: their Seller Protection doesn't cover services, so they can and will be SOL if the buyer decides to dispute the transaction. While Buyer Protection doesn't cover services either, PayPal is notorious for ruling in the favor of the buyer, so the seller needs to look into other ways of protecting themselves.
Which leads to our discussion here, of how we can leverage Seller Protection to ensure scamming buyers can't run off with the money after the service is completed -- by converting your commission service into a tangible product.
Seller Protection covers tangible products that can be shipped to the buyer, and by making a commission, you can take advantage of this by printing out your commission and mailing it to them. Right there, you have a tangible, physical item that is mailed to the buyer, and thus is covered by Seller Protection.
Adjust your commission information and terms of service to indicate the buyer is pu
How to Protect your digital sales v.1.2[Updated]
V.1.2 - #9 rule Added on - 8/1/2014
Due to recent drama caused by ToxicMutagen/Pixlett, I'm making this handy-dandy guide for newbie salesmen who wish to protect their interests.
Hi! Are you an aspiring digital artist? Do you want to sell your creations? Never a better time than now! However, there are people out there who will lie and decieve you for your hard-earned cash and it could ruin you if you are not smart about protecting your own assests! Here's some tips for you fellow digital art sellers out there:

*Your ToS should probably include something about the things you will and won't draw, the right to refuse service at anytime, information of how to properly place and cancel an order, and any repercussions that will happen by not abiding by this agreement.
Handling and preventing chargebacks (for artists)Some more informational materials I've written:
PSA about taxes
Solution to commission chargebacks
Tracing on DA
Get stolen art removed
Note: This post is primarily for US-based artists.
With all of the scamming that's going on recently, it's becoming more and more important to vet your buyer to ensure they are who they say they are on their PayPal account. It's no mystery that PayPal doesn't care about their sellers, and even less about sellers who sell digital content. An unauthorized transaction dispute

Others' past experiences with chargeback cases and how they handled them:
IF YOU HAVE BEEN SCAMMED BY PIXLETT READ BELOW[EDIT: 8-14-14] Forgive me guys as I'm getting swamped with comments about this situation. Since the original posting, we have learned that:
1) Pixlett/Toxic is a minor.
2) That if prosecuted, the parents will be held accountable, not the child.
3) At most, if convicted, she faces being marked as 'delinquent', and subsequently placed on probation unless she is tried as an adult, in which case, she would then be charged with theft/fraud, and face 3 years or more years in prison.
4) We have found who we believe to be identified as the suspect theif. From here, we should be able to file something [not sure what yet] against her/them in court.
:iconwitchpaws: and I are doing our best to dig up what we can about legal proceedings to have her delt with. Having her under 18 makes this extremely difficult to deal with legally, and also, each state has their own laws so I have to look at laws much different than my own. (which again, makes this hard)
I will update when we figure things out furt
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And on a final note, I want to thank everyone again for their support, help, and for spreading my previous journals around. It has been one hectic week, but it makes it bearable to have so much support. You guys are always there for me when I need it the most, and it really means a lot and I appreciate it more than you know. Thank you so much. Also, I got an influx of new watchers, so I just want to welcome you all and thank you, too :heart:.
© 2015 - 2021 CoastHarbour
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adaydreaming-artist's avatar
Hi, you might be interested in knowing someone on Artist's Beware (…) wrote to Paypal asking if sending a physical copy of a commission would provide protection.  The Paypal rep said it would not (…). I've always thought that requiring a buyer to have their commission mailed to them is iffy, because some commissioners are not interested in purchasing a physical copy of their comm and the costs to send something in the mail can really add up.  Some countries also have very complicated mail systems (i.e. Russia) so sending a print or CD copy of a commission, might end up taking 2 months or more to arrive...if it even gets there at all.
Laquarii's avatar
Hi can Paypal do anything about a transaction that happened in November 2015? I commissioned someone that time, and it's been 2 years and I haven't got anything from them. They disappeared.
Can I file a chargeback or dispute or something? Or is my money gone?
CoastHarbour's avatar
Err I really don't know anything about that, since I haven't ever had to file a chargeback or refund. My journal is really just about what to do if you're charged a chargeback, I'm sorry. Maybe you might be able to request a refund through PayPal.
Nennai's avatar
This is like really late as I didn't see it a the time, but thanks so much for putting this journal together. I'm very cautious about opening commissions after reading Paypal's Ts+Cs, and I'd no idea about that extra fee for opening a chargeback case. :panic: 
I hope you guys where able to make the money back as well :hug:
sorry I'm so late ;n;
CoastHarbour's avatar
Oh no problem! I think it's really important for artists to stick together and warn each other how to avoid certain situations and even how to handle them, if someone they know ever has to deal with it. 
And yea, they do take away a fee if you have to deal with one. But I actually just won back the money I had lost, even though it's been months. I guess the admins were still studying the case and now decided it weighed in my favor, because they gave me a complete refund.
And don't be sorry, it's all fine!
adaydreaming-artist's avatar
Very well written guide.  I agree with a lot of the comments, like having a thorough terms of service, don't accept gift payments, and don't do business with minors.  That's excellent advice.

I really wish Paypal offered better protection, because invoices can be charged back,  and stuff like sending a physical copy of a print isn't practical for many artists or buyers.  Paying for a physical copy of a digital commission would be a deal breaker for a lot of clients, because they don't want to own prints+the cost of shipping can really add up, especially if an international artist is involved.  Not to mention, some countries have such restrictive customs policies, it is a pain in the butt for everyone. 

I think if I ever did offer high value commissions, I would use a freelancer site like Elance that had an escrow service and a dispute resolution center.
ElectricSerge's avatar
This is why I now have created a signature page to adhere to my terms of service, that I will be making people e-sign come 2016 should they purchase commissions. For my own safety. This way if I get into any disputes with PayPal, I can show them that they willingly agreed and violated the agreement.

I would maybe advise others to do the same. I'm sorry to hear there's been more scandals going around. This person needs to get their story straight as the bit of information I've heard concerning this, seems like they're intentionally lying to cover their ass. But I can't say.
0606102056's avatar

How do you create a signature page that make people e sign?

tarynsgate's avatar
This is great! thanks for putting it together!
CoastHarbour's avatar
I'm glad you think so! And no problem!
tarynsgate's avatar
I spent the last few days digging around for alternatives to get around the problem cause I'm super worried about opening commissions again now that I heard chargeback scams are rather rampant x_x this helps put me at ease a little at least :)
CoastHarbour's avatar
I totally understand! I'm extremely wary now, too. But someone told me that a good alternative could be using Google Wallet. They said that they're more sensitive to sellers of digital goods, unlike PayPal. Maybe you could look at that and see how other artists like it! I know I'll definitely consider them
tarynsgate's avatar
I wanted ti try Google Wallet but some of the features dont seem to be available in my region :s they're stricter on certain stuff which was why I thought it was a decent alternative XD
SwaffyX's avatar
Very stressful, but I am happy to hear you found a way through. I'm surprised you deal with commissions still after all that mess, it seems like you have to run it like a small business. By the way, love Calvin & Hobbes. <3 I got the books with a ton of comic pages in them ^.^
CoastHarbour's avatar
Thank you. I'm almost to my goal, already, with the commissions
and well, I gotta make money back somehow :/ I'll just be more careful about it
Oh nice! InsanityStudz sent me two of those huge books a little while back when he sent me a package c: I'm really enjoying them
Cosmic-Cucumbers's avatar
When you say search for their username on Google, do you mean their dA username or what?

(sorry new person to Paypal Artist commissions) 
CoastHarbour's avatar
Yea, search their dA username

Edit: iEro-lau did a good job explaining it! Just as she said, you can find information online if a user is known for scamming.
ScalyFloof's avatar
Yes, since you won't know the real name of the commissionner, you don't have many choices that to Google the username. But it can be useful sometimes to know what they've done on the internet in the past.
SolarRoseArt's avatar
Very informative! and I think all those little tips are really good, that's the best way to avoid scammers :0
CoastHarbour's avatar
I'm glad you think so! I just really want it to be a helpful resource for other people who might need it if they get stuck in such a situation. It's really stressful when you don't know what to do. And I did realize that a lot of my watchers, or at least, of the ones that commented on my journal, haven't experienced this and didn't really know what to say. So, should it happen to someone else that watches me, then they at least know where to go.
SolarRoseArt's avatar
I can only imagine how stressful that must be, on top of everything else. ;-; I'm definitely going to keep this in the back of my mind for when I need to open up paypal commissions :XD: And I'm sure a lot of people will use this for future reference as well. 
CoastHarbour's avatar
It really was, I came close to crying a few times, honestly;; It was just so...shocking ugh. and then to top it off, one of my "friends" just drops me despite all this, without a word.. But I'm glad that people cared so much and spread the word as much as they did, so that makes everything a little better.

And definitely do! Just be careful, and if ever something like this happens to you, you're free to come and ask for help. But I hope it doesn't happen to you. 
SolarRoseArt's avatar
omfg I would've started crying the moment I saw it; I would've have just lost it. 
ah that's always fun

aa thanks again for the help :> I hope it never happens again *_*
CoastHarbour's avatar
Yea I wouldn't blame you;; god seriously hope you never have to experience that ugh ;-;

yeep great times

And you're welcome c:
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