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Submitted on
August 13


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Paypal has changed their layout, you can still send invoices but you can no longer select digital goods. 
I haven't had time to really look into it and come up with a solution. 
but you pretty much HAVE to send out something physical now if you want to be fully protected. There's still main points in this journal that describe how to go about that. 

This Journal is currently Under Revision. 
Points have been brought to my attention that have caused me to need to revise this journal. 
I am still digging around on my free time to see if I can find a way around this. I will update daily. 

Please note that this is specifically for Artists who use Paypal to sell digital goods.

OK, so there has been many artists being scammed lately through Paypal with large chargebacks. If you have been hit by a chargeback recently please feel free to note me and I will try my best to help you out. 

The rest of this journal is information on how to better protect yourself against scams, fraud, and/or chargebacks.

What is a Chargeback, and How do I protect myself from one?

So first we need to understand what a Chargeback is. 
By filing a chargeback, buyers ask their credit card issuer to reverse an approved transaction.
Common reasons for chargebacks include:
  • An item was paid for but never received.
  • An item received was significantly different than described.
  • An item was damaged in shipping.
  • A credit card number was used fraudulently.

for further information on how to respond to a chargeback please read Paypal's simple tutorial:…

Now that we know what chargebacks are, let's go over Paypal's policy and how they handle the situation should it arise. 
A Chargeback cannot be stopped from occurring. Paypal does offer seller protection that will cover the costs of your goods should a chargeback happen, however, you will have to fight for it and if you are an artist selling your digital goods (services), you are not covered by that protection. In order to be eligible for the Paypal Seller Protection, what you are selling must meet certain guidelines. If you follow the guidelines then you will be covered by Paypal and you won't lose any funds if someone were to file a chargeback. Please take a moment to read Paypal's Seller Protection Policy:…

How do you Become Eligible for Seller Protection?

PP Seller protection 1 by MDizzle-Designssource

Now, as a digital artist, (or if you live outside of the US) you are out of luck if someone files a chargeback. 
I have talked with other artists and we believe we may have come up with a few helpful solutions.

Step one:
Take a look at your buyer. Look at their page, Have they been buying art for a long time? Are there any negative comments against them? Is it a new account or one that has been established for a while? Does their page look sketchy in any way?
If they seem like a legit, responsible buyer than it is up to you wether or not you need to take the following steps.  

Step Two:
Create an Invoice or Money Request.
I personally feel that you should always use an Invoice or Money Request when receiving payment through paypal. It gives you control over the whole transaction. You get to choose how the transaction is placed and what is said in the message of the transaction (which is especially good when you sell NSFW art. Paypal does not permit the sales of NSFW works or anything of the like. If you are selling NSFW art, then you will not be covered by Seller Protection, I haven't found a way around this.)
Fill out your Money Request, or Invoice to suit your needs. If you are selling digital works then select 'services' instead of 'goods', but note that this will not cover you against a chargeback. 
Add your ToS in the Message if you want, this may help you.

Step Three:
Now, if your buyer/commissioner seems sketchy or if you want the seller protection then we may have figured out a solution.
Take on your commission, but instead sell a full sized print and make it to where it looks like you are selling a print, not just your services.
When writing your policy, be sure to emphasize that they are buying the finalized print from you. This will weight the transaction towards 'goods' instead of 'services', since physical items are being transferred for the funds received. You can better improve your profit if you give the buyer an additional option to buy a frame for an extra fee -- inexpensive, $5-$10 at walmart. Not necessary but further emphasizes that they're buying a final, printed form, not just the service of drawing it. 

You must be able to provide proof of delivery and proof of shipment
PP Proof 1 by MDizzle-DesignsSource

I'm not sure if there is a time limit for when you have to have the Print shipped by. You might be able to add a time frame in the invoice/money request message on when you expect to have the print completed and shipped. If you have insight on this, please feel free to share. 
Respectively, we believe that this has to be one mass payment as well, not multiple payments. 

Personally, I would only use this method if the buyer was sketchy and/or the transaction was large enough to hurt me if a chargeback were ever filed. Also, if I were going to use this method I would charge an extra $10 for the extra time and money I will have to use to get the Print made, but that's all personal preference that I am just tossing out as a suggestion.  

Step Four:
Finish your art, make a print, pack it up, and ship it.
ONLY SHIP IT TO THE VERIFIED ADDRESS THROUGH PAYPAL, if you send it to a different address that they give you then you WILL NOT BE COVERED by Seller Protection.
Make sure you get your proof of shipment and proof of delivery. If you follow these steps and read and follow the Paypal Seller Protection Terms as well as the Paypal User Agreement carefully then you should be covered in case a chargeback were to happen. 

More Info on how to use Invoices and Money Requests 

Get the buyer's paypal email, go to paypal and click the Request Money tab, You can then click Request Money OR Create Invoice

- If you Click Request Money: 
  • Add the recipient's Paypal email. 
  • Add the amount of money you want them to pay you. 
  • if you are selling digital goods, then select 'Services' (no shipping is required), or if you are selling tangible goods then select 'goods'. 
  • Finally you can add your personal message and include your personal ToS if you want to. 
  • click send. 

- If you click Create Invoice:
It's much more detailed. You can create a professional reusable invoice that you can resend to multiple people multiple times. I have never used this tool myself but if you look at it, you can see just how detailed it gets.

:iconhyanna-natsu: "you can create templates, so when you make a new invoice you can choose which template to use, for example, you can have a template for sketch art, other for flat colors, etc.
The invoice will have a date and you can choose a due date if necessary.
And it comes with the part "Terms and Services" where you can put your ToS in the template, so always you create a new invoice the ToS will be there. Also you can add your "Logo" which make the document more official maybe?
Oh plus, you can choose don't show your real name, email, address, etc. in the invoices, just need go in invoice settings."
The invoice will have a date and you can choose a due date if necessary.
And it comes with the part "Terms and Services" where you can put your ToS in the template, so always you create a new invoice the ToS will be there. Also you can add your "Logo" which make the document more official maybe?
Oh plus, you can choose don't show your real name, email, address, etc. in the invoices, just need go in invoice settings."
So it's worth looking at. Go play with it.  :)

Other Safer Methods of Receiving Payment

If you feel that Paypal may not be the best choice for you, there is other ways to be paid. 
the safest method is a Money Order through the USPS or any Western Unions. These are can be insured in case of loss in the shipping process, they are easy to send, and all payments are final; no worries of scams or chargebacks. 
Just have your buyer go to the USPS or Western Union and buy a Money Order, have them ship it to your address, go cash it at a bank and then start drawing! Easy as that! It just takes a couple days to receive it, depending on how long it takes your buyer send it. 

How To Protect Yourself as a Buyer:

If you are buying art, don't ever send payment as a "gift"; this pretty much gives the artist the right to run off with your money.
If the artist insists on sending payment as a gift because they don't want to pay the 2% fee, offer to pay the extra 2%, or don't buy their art, or convince them otherwise. 
Make sure you carefully read the details of the transaction and the artist's Terms of Service (if they have one.)
Save all conversations between you and the artist in case you never get your art. 
If you never get your art and it seems like they have no intentions of giving art to you, then you should be able to file a chargeback through Paypal.

-This Buyer protection section will be revised shortly-

I apologize for the multiple revisions on this journal. I write these after I get home from a long night at work and I'm pretty work out and ready for sleep. I really hope that I didn't forget anything and I hope that you guys find this helpful. I know it's a lot of reading, but it's worth it if you plan on making large Paypal sales in the future. Best of wishes to you all! <3
Add a Comment:
neoinu Featured By Owner Sep 26, 2014  Hobbyist Digital Artist
What about adopts? Someone paid for an adopt over paypal, now a month later they charged a chargeback.
What can I do to prove that they bought it?
Dannums Featured By Owner Sep 15, 2014  Hobbyist Writer
If I ended up picking the wrong option and ended up sending as gift, can I still invoke a chargeback through paypal? 
Miiddori Featured By Owner Sep 2, 2014  Hobbyist Digital Artist
When I try to make a invoice template I can't find anywhere it says to select services or goods. Idk if paypal changed. Same when I request money it just asks for e-mail and amount. Anyone please help.
AsheSkyler Featured By Owner Sep 2, 2014  Professional Traditional Artist
Very thorough! And brought something to my attention. Paypal's "bah, First Class International" clause. That REALLY sucks, the USPS international Priority Mail for me is $25 that more than doubles what I charge for some items. Forget about the ridiculous shipping costs for UPS or Fedex! Nothing bad's happened yet... *knock on wood*
I think you kinda went over it in the Step Two part or it may even be in the pending revisions, but a contract or "statement of work" tends to be the other favorite method. You write a document saying what you're creating, how many revisions you'll allow if you and by who (some people have issues with the whole family having an opinion), when you expect to be paid, and how much in addition to the invoice shipped with it. It's supposed to be a pretty solid defense for both artist and patron.

Checks and money orders are much easier. The only hard part is finding a buyer patient enough to let it clear the bank, especially around the holiday rush. 3% really is no reason for an artist to get fussy about using Paypal, that seems sketchy to me. eBay charges 10% of what you're paid (for the item AND shipping, bit of a ripoff), A&C charges 15% (but no Paypal fees later, yay!), and Etsy charges around 3% for the item and not the shipping (unlike eBay *grumble*). Nobody I've talked to likes the Amazon thing. Oo, I have an idea for the digital goods! Stick the high-res copy on a CD and mail it to the buyer's address. Therefore you can't say you DIDN'T ship something tangible to them. A lot of email systems have a limit on how much data can be sent anyway. Maybe it'll work? :3
roothragon Featured By Owner Aug 30, 2014
Pretty good document!  *bookmarks!*  I would add to the buyer protection section that paying as a 'gift' also puts the artist's account at risk of suspension, because selling products (digital or otherwise) using the 'gift' method is forbidden by PayPal.  I have a write-up on it here:…

Since that write-up, the Federal law preventing credit card companies from passing fees on to customers was repealed.  However, some states still have protections for buyers in those states, so PayPal still doesn't want sellers passing this fee to buyers (I've heard that you're allowed to charge less for cash/money-order, but you can't charge more for PayPal).  My write-up has links to and excerpts from the relevant sections of rules, and a link to Visa's list of states that continue to protect buyers from the fee dance.
roothragon Featured By Owner Aug 30, 2014
Actually, that bit about not being allowed to use 'gift' for sales should probably go into the Seller section(s) as well as the Buyer section.
wanabenightfury Featured By Owner Aug 18, 2014
bo no  no not you
wanabenightfury Featured By Owner Aug 18, 2014
maybeno123 Featured By Owner Aug 18, 2014  Hobbyist General Artist
Thank you for this.
Passin Featured By Owner Aug 18, 2014
Fascinating. A most helpful document
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