The $1250 PayPal Lesson SELLER BEWARE and a Happy Ending

Hey y'all!
In February I did a series of small market TV spot VO's for a North Carolina ad agency. They paid me $1250 for the session. The money was sent via PayPal. It arrived in my PayPal account, I transferred the funds to my bank account and proceeded to spend the $1250 on luxury items like food and shelter. (times are tough all over)
Yesterday my Pal Pal balance was negative $1250. The buyer had revoked the payment. His bank took back the money. Now any payments to my PayPal account will go against that negative balance. The bottom line is this. SELLER BEWARE. If you sell a service on PayPal you cannot dispute a chargeback from the buyer. I have the proof of emails, the scripts that were sent, the audio files I emailed and there's even actual video of the spots with my voice that are currently streaming on the web. Pay Pal basically told me that without sending an actual product through a reputable shipper (UPS, FEDEX) they will not side with the Seller in any dispute. So if you FTP'ed spots, sent MP3's or even did a live session at someone's studio and are paid via Pay Pal the buyer can revoke that payment for UP TO A YEAR! If you ever use PayPal the only way you can have any leg to stand on in any dispute is to physically send the sound on a CD or flashdrive and have the buyer sign for it. I hope my $1250 dollar lesson was not in vain. PLEASE be careful. i hope I saved some of you some trouble.
PS: if you want to see my VO audition put to video by the client in question click here.
My adlibs were what sealed the deal and got me the gig. The finished spots were probably quite entertaining.
Oh well, lesson learned.

NEWS FLASH! The client called and there was someone who had fraudulently accessed their bank account and was using PayPal to make payments using the agency's account. The Bank was on it and revoked all Pay Pal payments made in the last 90 days.....including mine. I will get a check form the agency and they apologized for the inconvenience. There is a happy ending after all SIGHH! (relief) But the exposure we have as service providers is still very real. Cover your butt if you ever want to win a dispute over a PayPal payment made to you. Send the CD via Fedex or UPS and you will have evidence that you provided something to the seller in the event of a dispute.

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Comment by Alton (Al) Hoover on April 13, 2010 at 2:14am
John: Thanks for the heads up. I'll always send a CD/Invoice for services if I have to accept PP. Great info! Best, Al
Comment by John Taylor on April 27, 2009 at 12:29am
LOL Linda.....eerie no? I am am glad this is resolved. The folks at this agency were a dream come true to work with. How often do you get a page of bullet points and the clients says...."We trust you, ablib and improv a buncha spots using these brief copy concepts"? I look forward to some great work with these folks in the years to come.
Comment by Linda Bard on April 25, 2009 at 10:05pm
Hey John -
Thanks for sharing your experience and giving us all something to think about. Nice 'sock puppet' voice! BTW, I had to laugh when the response to your question, "how much does this gig pay?" was "NUTTIN!"
Coincidence? I think not. :-)
Comment by Denise Nelson on April 25, 2009 at 6:11pm
Now that's news I can use!!! Thanks for the warning John & Zurek [read the blog about craig's list too]
Comment by Gregory Houser on April 25, 2009 at 3:31pm
A good rule of thumb I use is to always send a mailed invoice with a tracking number for any spots of this nature. Even PP will honor those in the event of a payment for service as being a representation of a physical good. I usually use a two-pronged approach in order to make life easy for the client, but in reality it protects me.

Including a copy of the spot on a CD couldn't hurt either...
Comment by steve hammill on April 24, 2009 at 4:21pm
BTW - you did a great job on that spot.
Comment by Barry Trussell on April 24, 2009 at 4:10pm
My pleasure John. And to reiterate, I have never had any issues with paypal, but that distinction between goods and services... Guess I will be sending hard copy out each time when using Paypal. Nothing against Paypal, it's just good business. We small business people have to remain on sharp.

Barry Trussell
Comment by John Taylor on April 24, 2009 at 3:58pm
Just to clarify,
The PayPal folks were really helpful and up-front about their policies. The reversal of funds was initiated by the client's bank. Overall my Pay Pal experience has been excellent. It's just good to know that distinction between goods and services. If we supply actual "goods" (a CD delivered with a tracking trail of evidence) We have an extra layer of protection. The exposure to a chargeback is always there (even accepting credit cards) The resolution of a dispute is hands down on the side of the seller if they sent the actual tangible goods. Pay Pal does most of it's business through Ebay (which owns PayPal) The service's primary function is to be the payment option of choice for that website. It's natural that their policies would be more alligned with the sellers and buyers of tangible goods rather than service providers like us. Janet, you need not be leery of PayPal. And thanks for the compliment Barry that was a nice thing to say.....awww shucks.
Comment by Barry Trussell on April 24, 2009 at 3:44pm
And yet paypal (though I have never had any problems) doesn't offer to pursue any policy changes in the face of blatant fraud and proof positive evidence to add some protection against the future. Just a thought. Thank you John, this is really good to know. Your work is fantastic!

Barry Trussell
Comment by Herb Merriweather on April 24, 2009 at 2:17pm
Glad for your happy ending and thanks for the warning...

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