Headaches dealing with Paypal, credit cards

MAD Magazine cartoonist and freelance artist Tom Richmond has an interesting post on his blog about the dangers of accepting credit cards and PayPal transactions. An important read for anyone taking payment this way.

Maybe Big Box retailers are really at fault here. Companies like Wal-Mart, Best Buy and Target will take a return on anything, and they have conditioned the consumer to think their purchase isn’t really a purchase until they have used it thoroughly and decided it’s worth the money. Caveat Emptor (let the buyer beware) is dead… Caveat Venditor (let the seller beware) is the new law of commerce. Payment options like PayPal make “caveat venditor” applicable to freelancers.

PayPal has a 45 day period where the buyer can open a “dispute” over a transaction. Since freelance creative work deals with intellectual property and not tangible goods, the “proofs” PayPal typically requires from sellers to respond to a dispute… stuff like delivery confirmation and photos of the goods in the condition sent do not apply in these cases. This is especially true when a job goes sour, and even if payment has been made at the end of certain stages it’s hard for a freelancer to prove he’s met his end of the deal as far as the payments thus far are concerned. As a result, PayPal can and will refund money out of a freelancer’s account without their permission if they side with the buyer in a dispute.It isn’t simply a matter of if they got the product, it’s also a matter of if the product was what they expected to get. This policy gives a client Carte Blanche to decide months after the fact if they feel like paying for a freelancer’s work.

2 thoughts on “Headaches dealing with Paypal, credit cards

  1. I think it’s a valid theoretical concern. Realistically, it hasn’t happen to him, it’s never happened to me (I’ve been freelancing and occasionally accepting PayPal for 5+ years), and the only complaints I’ve ever heard from fellow graphic designer/illustrators usually concerns PayPal disputes related to the shipping of physical work (art prints, original work, etc). So the only conclusion I can draw from that narrow sampling of experiences is that either A. Clients are mostly honest or B. Paypal must be handling disputes over services provided pretty fairly. Not to say there aren’t horror stories out there, just that they are hopefully few & far between.

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