Paypal Disputes not correctly handled

I think s2member is not correctly handling disputes!

Paypal Options are set to
Reversals (Chargebacks only; Always trigger an immedeate EOT action)

Current behaviour: User opens a dispute
1.
a) paypal sends out emails and asks the seller to provide proof/documents
b) Paypal temporarily freezes the money amounting to the amount of the dispute.
b) s2member demotes user if EOT on chargeback is set to on
2. 14 days or 30 days later if dispute not solved – Paypal will decide if they return the money to the buyer or unfreeze the money on the sellers account.

Now if you as a buyer did everything correct – plus have some proof – usually you should win the dispute (I win about 80% of disputes). However if s2member directly demotes, the from that point the user is actually correct in demanding the money back – his account is gone.

If however there is a genuine credit card chargeback – then yes s2member should directly set EOT – because it is virtually impossible to win a chargeback on paypal if you did not ship physical goods (at least I’ve only once won a genuine chargeback). However for sellers who think they can actually win credit card chargebacks on paypal – even here demotion should only occur once paypal has decided the case (which is usually even though they tell otherwise in their first email – within 24hours).

Correct behaviour.
a) paypal sends out emails and asks the seller to provide proof/documents
b) Paypal temporarily freezes the money amounting to the amount of the dispute.

2. 14 days or 30 days later if dispute not solved – Paypal will decide if they return the money to the buyer or unfreeze the money on the sellers account.
if seller loses: s2member demotes user if EOT on chargeback is set to on
if seller wins: s2member does nothing.

Note: Most Disputes for me arise due to paypal subscriptions. I nearly never have disputes on initial term. Just people forgetting they subscribed to yearly charge and forgetting about it – then asking the money back even though they got several emails telling them they checked out with a subscription that renews yearly.

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