How To Prevent & Win PayPal Disputes & Chargebacks for Digital Goods


What was first believed to be an issue unique to the BeatStars community is actually a widespread issue amongst online sellers using PayPal for transactions, particularly online sellers of digital goods, which would be all of BeatStars’ sellers (i.e. producers).

What happens is a producer has a beat or kit or service available for purchase on their BeatStars page. A buyer comes along and purchases, say, a beat from this producer using PayPal. Sooner or later, the buyer may then dispute the charge with PayPal or worse, his/her credit card company, resulting in a chargeback.

This behavior plagues online sellers of digital goods, especially because PayPal explicitly states it does not offer seller protection for digital goods.

Through trial and error, members of the BeatStars community have communicated with us and we’ve devised a few ways you can prevent and even win PayPal disputes and chargebacks for digital goods that you’ve sold.

Please Note: With everything, there is no 100% guarantee this will work for everyone all of the time. These are merely measures we’ve found to work within our community and should be taken as suggestions.

Prevent PayPal Chargebacks In the First Place

With the sale of digital goods, the trickiest part of the transaction history is the lack of tangible evidence of the sale. You’re sending someone a file, essentially, so it’s hard to “prove” whether or not the person actually received the file and downloaded it.

There are a few things you can do to protect yourself in this case and, thankfully, BeatStars implements some fallbacks to bolster your defense in the case of a chargeback or transaction dispute, which we will get into a bit later.

Now for the way to prevent a PayPal chargeback in the first place, or attempt to reverse a chargeback once one is issued…

Print out the receipt and any additional, relevant purchasing information and mail it in an envelope to the buyer and get a tracking number.

A tracking number through the United States Postal System will give you verifiable proof that you shipped an item to your buyer, thus getting around the “digital good” sale that is not covered by PayPal.

To be proactive, you should send this out as soon as your digital good is purchased through PayPal. However, sending this information once you receive notice of a chargeback or transaction dispute could still help you cover some ground and offer valid proof of your sale.

So if you’ve already received a PayPal notice of a chargeback or transaction dispute, it’s important that you know how to defend it.

How to Defend Your Sale and Win a PayPal Dispute

As a seller on BeatStars, when someone buys your digital product, you already get access to buyer history, which includes the buyer’s IP address, agreements they agreed to, receipt, etc.

BeatStars Receipt Example

BeatStars Receipt Example

According to one article on the issue, “PayPal recommends having proof of download, date of fulfillment and the time of download ready at the time of the transaction.”

BeatStars provides this for producers, in addition to the other essential information mentioned before. With all of this, producers should download and print out copies of this information and mail it to the buyer and get a tracking number from the USPS in the process.

The receipt BeatStars provides includes the date of purchase, order status, order ID, and buyer name and email, all crucial information to have in a transaction dispute.

Steps to Resolving a PayPal Chargeback

  1. First you’ll be brought to this screen when you decide to dispute a chargeback on a sale:

PayPal Resolve Chargeback Main Screen

2. Next, since you shipped that envelope with the transaction information, you can click “Provide Shipping Information,” which will bring you to the following screen:

PayPal Resolve Chargeback - Provide Shipping Information

3. Next, you can select the “I can provide online tracking information” option, which will bring you to this next screen:

PayPal Resolve Chargeback - Online Tracking Info

Enter in the tracking information and any additional information, which could be the BeatStars’ buyer information you have, such as the buyer’s IP address, date of purchase, etc. This will only help to bolster your dispute.

Hopefully, PayPal will accept this and reverse the chargeback, leaving you the winner of this dispute. PayPal is notoriously hard on sellers, especially sellers of digital goods, so now that you have knowledge of how to fight back, you can hopefully protect yourself and avoid pesky purchasing scams.