If you are a producer or beat maker, you may or may not have dealt with a PayPal chargeback while selling your beats online. With the hundreds of websites that allow you to upload beats for sale, you may inevitably run into a situation where you have to deal with a PayPal chargeback. As owner and producer of Almost Free Beats, LLC, I pride myself in having good business practices and doing everything in my power to ensure that customers are satisfied when they buy beats. However, in December 2010, I did encounter a PayPal chargeback. Here is my detailed account of how I handled the situation.

In December 2010, an artist was referred to my music production company by a good friend of mine. The artist was interested in some beats for sale on my soundclick page. Seeing that this customer was a referral, I was excited about the opportunity to sell beats. Referrals are usually the best type of customers to have.

After contacting me via email and letting me know exactly what soundclick beats he was interested in, the artist paid via credit card and I sent the beats to him. I also sent a non-exclusive beat licensing agreement as well as an invoice showing he paid for his instrumentals. The total sale was for $99.99. After a couple days, he was contacted via text message to confirm that he’d received the beats. He stated that he did and he loved them. I was glad to have another satisfied customer, but unfortunately, things spiraled downhill shortly afterward.

About one month later, I woke up to an email from PayPal stating the customer had issued a chargeback. I was disgusted to say the least! The $99.99 had been put into holding and also put my PayPal account in the negative! I was just really starting to make some headway selling my beats online. I had only sold my first beat in October of 2010 so for me it was kind of a punch in the face.

Understanding the situation and how the PayPal dispute process works, I began to gather all the necessary evidence to prove my case. Because of the way the credit system works in America, the credit card company ultimately, has the final say so as to whether or not you get your money back. PayPal only acts as a middle man submitting evidence.

I submitted the following to PayPal’s resolution center:

All email contact with the customer

Phone records of the text message contact with the client

All email contact after the chargeback was issued

Copies of the non-exclusive beat licensing agreement, instrumental terms, and a copy of the invoice

Note: this may seem like I went above and beyond but it is completely necessary!

In order to win a dispute as a seller you have to prove that the goods/services sold were received by the customer!

In my situation, I needed to show PayPal and the Credit Card company that the artist received his beats in satisfactory condition.

After submitting all of my evidence I had to wait until late April 2011 before a ruling was made on the dispute. Thankfully, I won the dispute and was reimbursed my monies. However, I would never wish something like this on any producer or beat maker selling beats online.

Here are some of the lessons I learned from this situation:

1. Keep a Good Paper Trail

As a producer or beat maker, make sure you have your business and paperwork together! It can potentially save you a lot of heartache! If you need legal advice on contracts, agreements, etc. seek an entertainment lawyer to cover your butt!

2. Communicate With Your Customer & PayPal

I was in constant communication with PayPal during the dispute process. I followed up with them often concerning my case and also continued to try to communicate with the artist even though he somehow “disappeared” and didn’t communicate with me anymore. I made sure to forward these “dead” email conversations to PayPal as evidence for my case.

3. Be Patient in Chargeback Disputes

PayPal disputes seem to take forever, but you have to be patient. Keep moving forward with your music production business. Don’t let one bad apple spoil the other great customers out there.

Funny enough the same customer attempted to contact me via another alias to get beats! This time he was trying to buy beats through Moneygram under a different name and email. I soon after reported him to PayPal’s fraud department! Haha!

I laugh at the situation now, but it was definitely a great learning experience. Hopefully, you don’t have to deal with a dispute like mine, but if so learn from my experience so things can go as smoothly as possible for you.

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