How to deal with PayPal chargebacks
If you are a producer or beat maker, you may or may not have faced a PayPal chargeback while selling your beats online. With the hundreds of websites that allow you to upload beats for sale, you may inevitably run into a situation where you have to deal with a PayPal chargeback. As the owner and producer of Almost Free Beats, LLC, I pride myself on good business practices and doing everything in my power to ensure customers are satisfied when they purchase beats. However, in December 2010, I ran into a chargeback from PayPal. Here is my detailed account of how I handled the situation.
In December 2010, a good friend of mine recommended an artist for my music production company. The artist was interested in some beats for sale on my soundclick page. Seeing that this client was a referral, he excited me about the opportunity to sell beats. Referrals are usually the best type of clients to have.
After contacting me via email and telling me exactly which soundclick beats he was interested in, the artist paid by credit card and I sent him the beats. I also sent a non-exclusive beat license agreement, as well as an invoice showing that he paid for his instrumentals. Full sale was for $99.99. After a couple of days, they contacted him via text message to confirm that he had received the beats. He said that he did and that he loved them. I was glad to have another satisfied customer, but unfortunately, things took a turn for the worse soon after.
About a month later, I woke up to an email from PayPal saying the customer had issued a chargeback. I was disgusted to say the least! The $99.99 had been put on hold and put my PayPal account in the negative as well! I was really starting to make some headway selling my beats online. I had only sold my first beat in October 2010, so it was like a punch in the face for me.
Understanding the situation and how PayPal’s dispute process works, I began to gather all the necessary evidence to prove my case. Due to the way the credit system works in the United States, the credit card company ultimately has the final say on whether or not to refund your money. PayPal only acts as an intermediary by presenting proof.
I submitted the following to PayPal’s resolution center:
All contacts by email with the client.
Telephone records of customer text contact
All email contacts after the chargeback was issued
Copies of the non-exclusive beat license agreement, instrumental terms, and a copy of the invoice.
Note: It may seem like I did everything possible, but it’s completely necessary!
To win a dispute as a seller, you must prove that the customer received the goods/services sold!
In my situation, I needed to show PayPal and the credit card company that the artist received their beats in satisfactory condition.
After presenting all my evidence, I had to wait until the end of April 2011 before a decision was made on the dispute. Fortunately, I won the dispute and they financed me with my money. However, I would never wish something like this on any producer or beat maker selling beats online.
Here are some of the lessons I learned from this situation:
1. Keep a good paper trail
As a producer or beat maker, make sure you have your business and paperwork together! It can potentially save you a lot of heartache! If you need legal advice on contracts, agreements, etc. find an entertainment lawyer to cover your butt!
2. Communicate with your client and PayPal
I was in constant communication with PayPal during the dispute process. I followed up with them often regarding my case and also continued to try to contact the artist even though he somehow “disappeared” and no longer communicated with me. I made sure to forward these “dead” email conversations to PayPal as proof of my case.
3. Be patient in chargeback disputes
PayPal disputes seem to take forever, but you have to be patient. Keep moving forward with your music production business. Don’t let one bad apple spoil the other great clients.
Interestingly, the same client tried to contact me through another alias to get hits! This time he was trying to buy beats via Moneygram under a different name and email. I reported it to PayPal’s fraud department shortly after! Ha ha!
I laugh about the situation now, but it was definitely a great learning experience. Hopefully, you don’t have to deal with a dispute like I did, but if you do, learn from my experience so things can go as smoothly as possible for you.