I decided I'd write something on this since it seems to be affecting a lot of my friends and artists I'm close to. I'll start with a few disclaimers.Disclaimer 1:
I am not a finance expert. I have never filed a chargeback nor have I been in a chargeback dispute (fortunately). I have done some research out of both curiosity and out of desire to help out the community a bit. This is going to be quick(ish) and summarized. I'm also going to be changing some things to the way I sell as well (obviously).Disclaimer 2:
This journal isn't about what to do in a chargeback dispute but rather, how to set up your sales so that you'll have the upper hand when having to deal with a dispute. I've included some useful links at the bottom for further information!
Regular Payments / ABs
Some believe that Paypal does not help in disputes over digital goods but a policy change last year says otherwise.
To understand what will help you in a dispute objectively, Paypal has a page of information here
which I'm going to try to summarize and go into.The primary reason for a Paypal chargeback is that the buyer did not receive the purchased item.
When people are selling digital goods on deviantArt, or any platform for that matter, having proof that your customer received their item is essential. Here are some examples of what you can do post-purchase to have that sort of proof.
1. When sending a file, include a message asking for the customer to confirm that they have received or downloaded the file. An extra step would be to remind them that they are abiding by a TOS if you have one or that they are confirming the end of the transaction. An example:
"I have received your payment! Here is the unmarked file/art/design/etc: [link or file]
Please respond to this message confirming that you have saved the file and that you agree to the TOS/approve of this transaction."*Remember that you can search sent notes by user and you can check if they read the note as well!
2. The second option is somewhat of a hassle but if you host the files on an external sharing website (privately of course) you may have the option to track the number of downloads and have that archived in the submission itself as opposed to a screenshot but Paypal does accept screenshots when you are contesting a chargeback!The second reason for a Paypal chargeback is a significant difference in the advertised good and the good that the customer received.
There's really only one solution to this and that is to be very clear about what you're selling and to stay as close to that statement as possible. I've actually had issues with this in the past (on my end) that could have landed me in a lot of trouble. I've only recently started outlining what you receive with the commissions I do. I include something like a "what you will receive" section.
Example from my commissions journal:"What you receive:
- One flat color version of the design
- One shaded version of the design
- One full ref sheet including both versions and a pallet"
As for adopts, I just leave the information in my TOS (as the first section of course) and include a link in the description of the deviation. If you have a TOS, be sure to include a statement like "by purchasing, you are agreeing to the Terms of Service for my designs."
For commissions and customs, including examples of your work will also help in making it clear what the customer will receive!The third reason for a Paypal chargeback is unauthorized transactions.
There's not too much that I know of that can help you if the account filing a chargeback uses this reason. However there is one thing you can do.
If using invoices (which you should definitely do for larger sums of money), when the customer pays the invoice, have them include their deviantArt username in the notes. This should be done in any case for both organizational reasons as well as helping you link the deviantArt account to the Paypal account when contesting the chargeback.Other Notes
In general, it is good to have a written, accessible Terms of Service linked to any commissions listing or design sale.
Including a note in the description that by [action] user is agreeing to [rules or TOS] can help.
Keeping up with screenshots is a hassle but you are able to "save/archive" deviantArt notes. No one can really delete them except you (and not even then I don't think).
This is definitely a much different section. The most chargeback incidents that I've seen have to do with an incomplete payment via payment plan.
Most designers I've seen that offer payment plans have used a down payment system, usually with a non-refundable portion, which is understandable since someone backing out would considerably inconvenience an independent artist. Like the above, here are a few things you can do to protect yourself in this scenario.
Since a payment plan does not guarantee an item being delivered to the customer immediately after partial payment, terms need to be clearly defined and agreed to.
1. Always try to have users note or message you before purchasing using a payment plan. This gives you the upper hand because with their initiation, they have already agreed to their proposal.
2. Define what the user receives for their partial payment. This could be anything so long as it is in writing. Something like "you have a claim on this design until the payment is completed or until the deadline." You could even go the extra mile and create a "ticket" for them, some sort of visible confirmation like a stash file that would be updated with the file/item once payment is completed.
3. If you have a non-refundable down payment, make that clear. This can either be in the description or in message etc.
Send Money vs. Request Money
Invoices can take a bit longer than the "send money for goods and services" option of Paypal but it does so much more for you in the long run.
When you request money from another account via invoice, you have the upper hand in a chargeback dispute. By sending an invoice, you are the one essentially laying out a platform for the customer to agree to your own terms. Invoicing is the same thing as billing except it is usually done prior to completing or sending art/digital goods.
Invoices will show you more information about the account that is paying (includes things such as name/shipping address etc. some of which you can view from "send money" but a few which you cannot). Scammers (from what I've seen) are more likely to coerce you into going with "send money for goods and services" but do not go for this option unless the customer is trusted.DO NOT USE "SEND MONEY TO FRIENDS AND FAMILY" FOR COMMISSIONS, CUSTOMS, DESIGNS, OR ANYTHING THAT YOU ARE SELLING.
In a dispute, not only will you have a disadvantage but you will be in risk of consequences for tax evasion.
Invoices do not protect you from chargebacks. A chargeback can be filed for any transaction. Invoices just help in contesting.
Image and Post-chargeback Protection
On Paypal's page about understanding disputes, the first bullets talk about being proactive. In a situation in which a user informs you that they are filing a chargeback, respond to them in a timely manner with a respectful attitude (even if their's isn't so much). Restate your terms, it never hurts to remind your customer about what they agreed to. Offer to fix the situation if they make a complaint that falls outside of the transaction itself (another hassle, I know, but whatever you can do to make yourself look helpful and proactive will help).
Proof of negligence is the biggest advantage that a scammer can have when filing a chargeback even if the reason is absolutely ridiculous.
For awareness purposes, save the email address of the account for reference. You can save other information but so far I have only seen business accounts used in these disputes with names unrelated to a person or the username on dA.
Sharing someone's address or even just their name makes it much easier for them to report you for harassment (since it is definitely an invasion of privacy at that point). Generally you want to stay away from anything that has to do with the physical.
To conclude, here's a helpful link
on how to best set up a preventive transaction for digital goods.
If I have any incorrect or incomplete information above, please let me know in the comments and I will update this journal promptly!
Feel free to share this journal as well if you'd like!