Paypal Friends & Family Chargebacks

Hey ya’ll. My wife does a lot of online clothes shopping and selling through paypal.

She has had money just disappearing from her account. When she called into ebay apparently the money missing was from chargebacks. A girl had sent several payments to her via Friends and Family and then the payments were marked as unauthorized by buyer’s bank. Normally with regular payments you have a case opened and tracking solves the issue. With chargebacks on friends and family payments paypal does not even contact the seller, they just take the money and stick you with the $20 fee. This sounds absurd to me. My wife even has tracking, though it has no case to be used with.

Has anyone dealt with these kind of issues before?


Wait, so if I understand correct: a buyer pays (with Friends & Family), but their bank isn’t accepting the PayPal payments, so PayPal has to pay the bank back; then PayPal takes that money from the seller which received the money to compensate for their own losses; and the seller has to pay a 20 USD fee?

So the seller has to pay a 20 USD fee to let PayPal ‘steal’ their money… :confused:

If I indeed understand it correctly, this above is an understatement…

But no, I’ve never had this issue before. I’m primarily a buyer and barely sell anything.

And if the payment would have been made with G&S you can send some kind of prove to undo it again, but with F&F not?


Buyer sends money via FF
Seller ships items to buyer
Buyer receives, everyone is happy
4 months later non-authorization for the charge through the bank is claimed(there were more than 1)
Paypal auto-refunds buyer + $20 fee for the chargeback(no case, no email, nothing)

I was going to do a big deal that involved someone paying F&F, luckily my wife researched and found out this does happen…people will pay, then all of a sudden you get a chargeback and the money is gone. I didn’t believe that was possible, but she read multiple stories of it happening.

I told the guy to just buy through ebay instead, I’d pay the fees, just to be safe. The guy bought it, but they sale was cancelled by ebay due to the ebay ID being hacked and suspicious activity flagged on the account. Dodged a bullet, but lesson learned: no payment option is truly safe.


Sorry to hear that Rusty, hopefully that was an exception.

People in general should take “friends & family” very literally. I had a similar experience as @jcincy101 with a Manhole FPO card. Threw it up in auction, went pretty low, invoiced the buyer to pay. They messaged me asking to pay FF. I told them to pay through ebay. The next day ebay removed their account entirely. I also received a message about the account attempting fraudulent activity with other sellers.


That’s really interesting. It seems that buyers can claim the charges were unauthorized and get their money back. You’re stuck with no way to fight it because technically (according to PayPal) you didn’t send them goods or services for their money. Seems like a clever way to scam people. This is something to watch out for.


If they don’t pay with their paypal balance buyers can get their bank to step in and reverse the charges.


Like Scott said FF should be taken very literally as payments with people you trust. Charge backs can happen on FF payments and there is really nothing you can do. Only thing could help is when someone purchases from you thru FF have them put in the description what they are paying for and their address. That way PayPal could see it wasn’t by mistake.

Unfortunately everyone on Virbank wants F&F as payment…


Everyone on Virbank is dreaming.

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Absolutely does not work. I had done this little “trick” years ago and even had the buyer write and send an email as well as the PP note detailing what they were buying and agreeing too. It still was charged back.

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How could you tell if someone is sending you money through FF on paypal for the things you sell on ebay? Is there a way to check this or make sure they can’t use FF to purchase from you?

@sacari, Goods and services is the default. The buyer would have to specifically choose FF.

On the receiving end, if the funds are sent FF you won’t have any fees when you check the payment.

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I have had this happen to me but not even F&F. I sold something on Ebay but buyer asked to meet locally and I had proof that he bought it from me but since I did not ship it, I had no protection. The buyer waited after the 30 days to return it and went to his bank and claimed a false charge. He also went to Paypal and said the “item was not as described” (not that he did not get the item). I had pictures and everything showing that he sold it but Paypal basically said screw me, he got a brand new item and money back but I had to pay that money to Paypal or I was going to a collection agency.

Moral of the story: F*** Paypal

Moral of the story sell things properly according to the T.O.S. of the services that you are using. When you are receiving a service from someone… you pay them for that service.

Selling or buying items through F&F is literally theft of Paypal’s services. It is not free for them to process transactions and move money around. Friends and family is a nice option that they eat the small transactional costs on as a service to their buyers and people should either stop abusing it, or at least stop complaining about when they get bit by it. I don’t know why or how Paypal isn’t cracking down on it more given how frequent it is, but honestly more stories like this will resolve the problem by itself over time likely. I’ve heard of it very few times overall but definitely more often recently.

Calling up paypal trying to resolve situations like this as either a buyer or a seller is like a dealer or a buyer in an illicit transaction going to the authorities over getting stiffed over bad drugs or fake money received.


FTFY. Taking “FF” seriously would be only using it to send gifts to friends and family. FF is not for payments or services of any sort.

If by this you mean that way Paypal can see you are misuing/abusing the FF payment system and ban you for doing so? Then yes by all means use this route. How can anyone think this is okay? Why would this be allowed?

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Ok calm down buddy my god lol I don’t do FF payments only goods as I want to make sure I have full protection I have just heard about people doing it like that awhile back. Never said it works lol

@gottaketchumall, I think that is a bit harsh. FF is an option because there is a legitimate application. Perhaps a way to soften what you are saying is FF shouldn’t be a default for doing business.


Yes if you do FF here and there you are not a criminal, however business should be conducted through goods as it offers the buyer and seller the best protection as you are paying PayPals fee for protection thats why you are being charged a fee as they are offering you that service of protection. FF I view it as very close friends or family :wink:

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Facts are just facts. I personally don’t think anything about them need to be softened. I think @chris350dx was sensing emotions in my post that just weren’t there. Plain text is a poor form of communication for that reason. I mean I did use a bit of sarcasm and I could see how someone would read that as if I was in a worked up tone, but I wasn’t. I was asking genuine though rhetorical questions as I am genuinely shocked at how some people don’t realize it is against TOS and I was shocked to see such poor advice that would potentially get the two parties flagged/banned.

Paying for any good or service via FF is inherently theft of services. That is just a plain irrefutable fact. There is no way around that. Many people receiving gift payments further commit tax evasion since Paypal doesn’t report them on 1099’s. Are either of those the worst crimes in the world? No. But are they technically crimes? Yes. That is all I am saying.