Paddle closed my account

February 5, 2019

[quote]Dear Stanley,

Hope this e-mail finds you well.

I am getting in touch as we are making some changes to your Paddle account.

At Paddle we are constantly changing and evolving to ensure we can serve our customers in the best way possible.
In order to meet these expectations we are required to comply with both international regulations, as well as our payment processing partners compliance requests.

Per industry standards, it is difficult for us to support businesses with a customer dispute rate that is above 1% (by volume or count) on an ongoing basis. Your chargeback rate has been consistently over this threshold and it currently sits at 7.4%. This not something we can support on our platform. I understand that we tried to work with you to reduce this rate but unfortunately your chargeback rate still remains this high and as a result, continues to pose a risk to our business.

We regret to inform you that we have decided to terminate your Paddle account. Your checkout will be disabled in 14 days to give you time to migrate to an alternative platform.

Your payout will be held for a period of 90 days (from the last transaction date). This is to protect ourselves from any refund and chargeback requests. Once these have been honoured, we will process the remainder of your payout as usual.

We understand this may be disappointing and we apologise for any inconvenience this may cause. We wish you the best of luck with future endeavours.

Paddle Verification Team[/quote]

Actually they have been retaining founds twice, $4k and $3k and now $500 that will get, I suppose, in 90 days. My dispute rate at Paypal is around 1%. I have been using Paypal for more that 15 years without a single problem. I used Kagi since 1998 till it closed without any problem either. Go figure out… What bothers me is all the integration work I did for nothing and even more the fact I don’t know why I get so many disputes at Paddle compared to Paypal. I created a Paddle account because I like to have two working stores, a main one and a backup. Paddle was my backup and I also used it for Pakistan and Turkey customers.


Not cool :frowning:

Do you have a trial period to try and reduce chargebacks?
Do you call home to verify registration or is the licence lost once they chargeback?
Is the 7% on your bulk mailer apps?

Lovely! Did they ever show you the chargebacks from Paypal?

I worked with a guy at Paddle, he sent me a to-do list.

A the beginning I though it was because lots of people purchasing at Paddle use Gmail or so addresses. Gmail was not delivering my messages with the serial despite they are SPF/DMARC/DKIM signed so I created a ‘Thank you for your payment’ page that included the serial. Then I was recommended to include a clear text about 30-days money back guarantee with a refund link. Then I included a logo of the company everywhere to get clearly recognized. I spent a week enhancing everything and going thru the Paddle to-do list. The Paddle guy told me I did a really good job. Useless, the dispute rate continued to grow, people purchasing and opening a dispute a few days later. Nobody contacted me, nobody use the refund link… looks like fraud to me.

Yes hopefully all my software includes a call-home system. The store is fully automated, when a refund/chargeback happens the serial is automatically deactivated.

The 7% is global, all the products. And I never get the reason, never get any text/question/comment from the purchaser, they are not like Paypal disputes, at Paddle you can do nothing at all.

Maybe this is part of the problem. Not saying that customer from those places are problematic in general, but it looks like those customers are only being served from Paddle.

100% of disputes are for Europe, mostly England. I never got problems with Pakistan and Turkey people actually.

Very odd. Do you not get 3D secure transactions from the UK? With 3D secure and the trial period, I can’t understand why they actually authorise the chargebacks. (I realise that 3D’s aren’t 100% guaranteed, but still, thats some serious fraud).

I guess that using a payment processor like paddle removes you from the process to a degree so you can’t get in to the details yourself.

In the past, I’ve always gone directly to payment processors where you get to see the raw data on the transaction.

Do you have companies such as SagePay/WorldPay etc. in your region, or do you want to start with a gateway provider for ease of taxes etc?

This is classic BS from merchant services who cannot cope with excessive chargebacks.

I had to deal with two rejections of exactly the same kind, way back before I switched to Paypal back in 2000 or so.

If you use it to deliver soft goods, it is not unusual. Even if you provide logs of the download with IP and exact time, they won’t consider that appropriate tracking of delivery, and accept the chargeback. Unfortunately, uneducated customers tend to use chargebacks as a convenient way of getting a refund.

Even if you have a serial number scheme where you can prove not only who ordered, but who downloaded, who installed, and who registered the software, they will still blindly accept chargebacks of non-delivery and take the money away.

But more usually its ‘fraudulent transaction’ where a ‘customer’ in the loosest sense just raises a query.
Immediate chargeback.
I’ve managed to get the money back sometimes by emailing the customer and asking ‘hey… remember me…? You are using the software and getting support for your emailed queries, how come you told your card dealer it’s fraudulent?’

Sometimes its because your business is MyGreatBusiness but the credit card bill says SomeInternetThing S.A and people don’t join the dots.

E-Junkie (whom I used to use a lot) have a lousy business name, but thankfully the payments go via Paypal.
And I know FastSpring have a great screening system which kicks in long before I get to see payments.
Chargebacks there amount to maybe 2 or 3 a year at most.

I routinely remind the users in my confirmation email of the upcoming charge :