Chargebacks / Paypal Dispute - Fraudulent Deadbeat Customers & unpaid merchandise

Posted on 2012-08-26
Last Modified: 2016-03-24
We sell custom parts for cars and some made to order parts.

Occasionally I encounter deadbeat buyers who will order made-to-order parts that take time to produce.  Everything is clearly stated multiple times, no cancellations and ETA's are clearly posted and the customer must agree to the same thing multiple times during checkout.

Even though it is blatantly obvious that the part does not ship immediately I still get customers that cancel the order through Paypal, either because they just didn't read or they have money problems and think they can just cancel the order.  Many times the customer ends up getting their money back and were stuck with custom made to order parts / dead inventory that may or may not ever sell and that we must warehouse.

An order form to pay on the website is legally binding is it not? Can we legally pursue debt collection at this point? If so how do we go about this?

I'm sure wedding cake companies and other businesses must have some kind of contract for made to order items.

Currently I have a customer with a large order that I would like to collect on seeing how the case with Paypal unfolds.

If I can legally pursue collection since the customer's payment is refunded, what legalese should I put on the website in order to make this contract bulletproof?
Question by:RonPaul
    1 Comment
    LVL 2

    Accepted Solution

    In the business legal environment, a verbal contract between a buyer and seller is binding. You can sue for damages.  Now, I would not make a product without at least some money down covering costs of the build minus the profit.

    Bottom line: you can seek damages for fraudulent contract agreement. I would contact PayPal and see what they say and also talk to a lawyer that doesn't charge for consultations.  It could be small enough to take to small claims court.


    Featured Post

    How to run any project with ease

    Manage projects of all sizes how you want. Great for personal to-do lists, project milestones, team priorities and launch plans.
    - Combine task lists, docs, spreadsheets, and chat in one
    - View and edit from mobile/offline
    - Cut down on emails

    Join & Write a Comment

    I recently read an article which suggested that 60% of businesses in the U.S. that process credit card details online in order to accept payment for goods or services were not Payment Card Industry security standards (PCI) compliant. This statement …
    For both online and offline retail, the cross-channel business is the most recent pattern in the B2C trade space.
    Viewers will get an overview of the benefits and risks of using Bitcoin to accept payments. What Bitcoin is: Legality: Risks: Benefits: Which businesses are best suited?: Other things you should know: How to get started:
    This video discusses moving either the default database or any database to a new volume.

    745 members asked questions and received personalized solutions in the past 7 days.

    Join the community of 500,000 technology professionals and ask your questions.

    Join & Ask a Question

    Need Help in Real-Time?

    Connect with top rated Experts

    16 Experts available now in Live!

    Get 1:1 Help Now