Legal Question in Business Law in New York

Chargeback - Money Disappears - Who's Responsible

I have a merchant account with Paypal for my ecommerce website. A buyer, concerned by a small delay in receiving her purchase, filed a chargeback through her credit card company, American Express. Paypal initially fought the chargeback but eventually took it out of my account.

The buyer received her items 4 days after the chargeback and contacted AmEx to reverse the chargeback. AmEx told her that they never took my money, they just threatened a chargeback. She also claims that it was never credited to her account. However the money was definitely taken from my account, and Paypal says that Amex took it. Bottom line, both Paypal and AmEx claim not to have the money.

My question is who has to bother figuring out where the money went. Since the buyer admits to receiving the items and I have proof that I was not paid because the money was taken from my account via chargeback, isn't it the buyer responsibility to pay me? As far as she claims that the chargeback money never was credited to her account, that's her problem. As far as I know, I sent her an item and was never paid. Am I correct? Thank you in advance for your time and responses, they are greatly appreciated.


Asked on 6/26/08, 11:34 am

1 Answer from Attorneys
John Friedman Law Office of John K. Friedman

Re: Chargeback - Money Disappears - Who's Responsible

Your agreement as to funds in your Paypal account is with Paypal. Have your agreement reviewed for relevant language (either by an attorney or yourself). You also have an agreement with the customer -- if she received the goods and you were'nt paid due to her actions she still owes you the money or the return of the goods. Check your policies with your customers for guidance on this aspect.

Good luck.

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Answered on 6/26/08, 11:51 am


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