All you need to know about PayPal donations and oppositions
Before you read this article, it is important to notice and clarify that no information in this text is written by a lawyer or advocate. Laws, regulations or region policies can change, vary or otherwise turn to your disadvantage. We highly recommend you to speak with a professional, lawyer or a legal institution for general advice. There are methods to abuse the system or otherwise complete a refund/chargeback, which will not be covered in this article to prevent trolls from knowing of them.
Now that you are aware, let us dig into all you really need to know about alert services, handshake providers, PayPal and what liabilities and responsibilities lie with you. What have been learned through experience, legal advisement and talking with PayPal employees.
In most cases you, the livestreamer, find a pop-up/alert service to stand between you and the donor. The way this goes down is through a "handshake" between the donor' PayPal and your PayPal. Even though they provide this handshake solution, they never really process the transaction or transfer of funds. Doing this, they do not even have to comply with any regulations or inform their local financial institution. All this is taken care of by PayPal, as they acquire the money and settle them into your balance account.
The reason it is important to understand the purpose of this handshake solution, is because you are dealing with PayPal and not the provider. Yet your donor is bound by the Terms & Conditions of the handshake provider. You, therefore, need to know what it says and contains to cover your legal grounds.
Terms & Conditions
In most cases, the provider should have certain terms to protect themselves from any liability providing you with their handshake solution. Within these terms, they should also state to the users and donors that all donations are to be acquired in full and no service, goods or products is given in return unless the card is used illegally through theft or unauthorized access. Which are the only 2 legal oppositions you cannot fight and win. You can, however, get them solved without having to pay the transaction fee to PayPal.
"Good Guy PayPal" is set up to release the transaction fee if you decide to refund the full amount through their system. This solution can be used in any scenario where you fear the card is stolen, the donor is not the cardholder and/or is not authorized to spend the funds. A great example could be a young child using a parents credit card information. If you suspect any transaction, you can cover yourself with extensive fees by refunding the money as you receive them. Just be sure to manually remove them from the donor's list as the handshake provider most likely won't notice the refund.
You are now knowing your legal rights and is receiving donations. Suddenly a person changed their mind and want the money back without any reasoning. They go to PayPal and ask for a refund/chargeback. Now PayPal opens a case with you, asking you to settle the matter with the donor/"customer".
You can choose to write the donor, telling them that a donation is non-refundable and point them to your text saying it is non-refundable and the terms of the handshake providers website. If the donor is unhappy about it and will not fall back, your next option is to settle the matter with PayPal. If this is the case, make sure to explain it all. Tell them about you livestream, the donation and that it visibly states the money is non-refundable. Also, make sure to point them to the link with the handshake providers terms and let them know what section to read.
Once PayPal processes your settlement message and sees that everything direct do a "free of will" donation, they settle the matter in your favor. Donations are not covered by PayPal's "Buyers Protection Policies", as you are not selling goods or services and the donor has no invoice to prove otherwise.
To further protect yourself and more easily show PayPal that donations are non-refundable; write a small text on your livestream page and the donation page (if possible) to ensure it is visibly quoted. You can write the following text to be safe:
Your donation is non-refundable and can not be returned, refunded or charged back. You acknowledge that you are not receiving any goods or services in return for this "free of will" donation. Please do not donate more than you can afford.
Even when fully covered legally, make sure to be considerate towards refund requests, as people may do a typo or somehow confuse the donation amount. If the donor wants to donate $5.00 but ends up sending $500 or wanted to type $100 but wrote $1000; it can be a tough amount to swallow financially. In these scenarios or situations, the best practice will be to refund the full amount and let them redo the donation, even if it gives them more exposure on the screen. You should not feel bad about having to refund these funds, as you can save the donors financial situation doing so. In the end, you also gain positive karma as people know you are a good guy towards authentic mistakes.
Block bad donors
Some services allow you to block donors as they need to login before being able to donate. If you consistently receive donations that are later cased through PayPal, find their latest donation and block them. This way the provider will know now to allow more donations from this donor. If you are using multiple different services to accept various payment opportunities, check if you can somehow block them on all the services. Not only will you be clear from that donor, but you will also help the provider to detect bad donors in general. It is a winning situation for all users of this service provider.