Thursday, February 10, 2011

First online sale: Through Paypal and shipped internationally from Hong Kong

After completing the web-store with PayPal option, we had our first online sales! This is an international sale to Mauritius. Although the sale was small, it does provide an opportunity/excuse to look into international shipping arrangement.

After some back and forth email with the customer and looking into the shipment process, I finally shipped out the product today!

It is shipped out, but it is not over yet. I have done some online research and it looks like fraudulent chargebacks are quite prevalent in PayPal. Some more reading also showed chargebacks are actually out-side of the control of PayPal. Paypal is just the conduit. The chargebacks is initiated  by the customer directly with the credit card company (pay by credit card via PayPal also applies).

Further reading and you will find that the seller ultimately is the one who loses out when fraud occurs.  Let's examine the payment parties involved in the payment process:
Buyer -> Credit Card Issuing Company -> Payment Processor (Gateway) -> Acquiring Bank -> Seller
When a chargeback occurs, the above process simply reverses, except the withdrawal of money is done without the seller's consent.

If a fraudulent charge back does occur, it would not be so bad. After all it is for a small amount and it is just old inventory sitting around in our warehouse. This does not mean if it happens, I will ignore it.  I will fight it until my last breath.  Not because of the money or the "principle", but as an learning opportunity/excuse to explore the options available to fight online fraud from a seller's perspective.

For those who does come across this post, I would love to hear your stories and experience on e-commerce!

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