Once upon a time, PayPal disputes amounted to less than 1% of all transactions.  It wasn’t really necessary or desirable to have a procedure to handle your side of the dispute.

In fact, in our business, we used to simply refund them and inform them that they weren’t welcome to make any purchases in the future.

The economic downturn and other factors have sent PayPal disputes through the roof for many businesses though.  Our own current rate is over 6%.  We have customer who is experiencing a 26% PayPal dispute rate and/or chargeback rate.

This all started in October of 2008 right when the stock market crashed.  It was simultaneous with a large change in the Glyphius database and a huge blip of absolutely no sales in the businesses of several of our customers for a solid two weeks in October.  We also experienced reduced sales during that time.

Perhaps you experienced the same thing.  Perhaps you needed to put into place a program to start disputing the PayPal disputes and chargebacks for no other reason than to protect your PayPal account from being shut down.

It’s actually a very simple procedure in the end.  PayPal makes it very easy for vendors who meet just a few criteria to win every single PayPal dispute.

First, let’s break down disputes into the two categories that PayPal uses:

1) Significantly not as described.

2) Not received.

Your customer (or thief in this case since they really aren’t customers… they are trying to rip you off) has to choose one of those two reasons.

The first reason is the easiest to dispute and win.  You simply enter the UPS tracking number of the item being disputed and click the “escalate to a claim” button.

The dispute will be automatically judged in your favor and closed immediately.

The reason is that PayPal does not put itself in the position of deciding if an item is described properly in your sales letter.  They really can’t do that.  That’s up to enforcement from the F.T.C. and/or civil remedies in courts.

Of course, you must follow the law and describe your products accurately in the sales letters.

And also, of course, there is no reason to feel guilty about winning the dispute.  You describe your items accurately so the “customer” (ie: thief) has just filed a fraudulent claim with PayPal trying to steal from you and get your PayPal account shut down.  Winning a dispute with a thief is a good thing, not something to feel guilty about.

The other reason is “not received.”  The action to take is identical.  You simply enter the UPS tracking information and escalate the claim.  This one won’t be closed immediately.  It will take some time for PayPal to look at your tracking information and make sure the item has been delivered.  However, once PayPal looks at your claim, it will always be found in your favor.

Once again, the “customer” (ie: thief) has placed a fraudulent claim pretending that they have not received the item you shipped.  PayPal trusts UPS because UPS simply doesn’t lie about delivery.  In fact, they get a signature if your product is over $100 and you buy the insurance.

That brings us to the details of how to use this extremely simple procedure to win every single PayPal dispute with less than one minute of work.  Here are the steps:

1) Ship something with every order.  If you are offering a service, still ship a CD or something with a copy of the results of your service.

2) Always use UPS.  USPS has tracking, but some percentage of the time they simply say they lost the tracking information.  Use UPS and you’ll always get a delivery confirmation that PayPal loves.

3) Always buy insurance if your item costs more than $100.  This gets you the signature confirmation that PayPal likes to see if your customer paid more than $100.

4) Always require shipping information when setting up your PayPal buttons so that you have the address to ship to.

5) Instantly refund any order that doesn’t have a confirmed address or uses a P.O. Box.  These are extremely likely to result in a dispute by a con-man after they receive the item.  You won’t be able to win these disputes because PayPal only offers seller protection for shipments to confirmed addresses.  You can’t send via UPS to a P.O. Box.  It is best to simply refund them and not ship to these con-artists at all.

That’s it.  Enjoy winning 100% of the disputes.  Also be sure to tell every con-man that disputes a transaction with you that they are not welcome to do business with you in the future.

Some percentage of them will go out on the forums and complain about your policy.  That will warn off other con-artists which is a very good thing.

The author is the creator of TestiVar, the world’s most effective multivariate testing solution.  MuVar completely automates the task of optimizing your sales letters for more sales.  Check it out here:
http://www.TestiVar.com