There are currently a few threads about transactions appearing on author statements called ‘sales reversals’. There seems to be some concerns and perhaps some confusion as to what these transactions are and how they got there.
I’d like to provide some information to answer the questions that have come up and hopefully help out.
What is a sales reversal? A sales reversal is a transaction that has been reversed from Envato by the payment gateway (which means either PayPal, or Moneybookers as these are the Marketplaces payment options). A sales reversal occurs when:
1. Unauthorised activity occurs on a credit card and the credit card provider initiates a reversal of the amount.
2. Unauthorised activity occurs on a PayPal or Moneybookers account and is detected either by the end customer or by the payment gateway.
If you are the author of an item that was purchased and that purchase was reversed by the payment provider, you will see a ‘sales reversal’ event on your statement. These have only started appearing on statements since May 2013. Prior to that, Envato simply absorbed these reversals, even though we’ve never received any money.
What is the difference between a sales reversal and a refund? A sales reversal is different to a refund and should not be confused. A refund for an item can occur for a number of reasons including when a buyer makes a complaint or claim and requests their money back. This can happen if the item is broken or is not as it was described on the item page. In this case, the buyer has dealt with the Envato Support team and an assessment is made on the complaint.
What happens to the item purchased if there is a reversal? As soon as a reversal occurs, Envato immediately disables the buyer’s account. If the reversal is confirmed then the item is removed from the downloads page.
Why can’t Envato dispute the reversal with payment providers or have a policy of no sales reversals once an item is downloaded? In the case of these sales reversals, we are notified after investigation has been completed and a decision made either by the credit card company, PayPal or Moneybookers that the transaction must be reversed. We are unable to dispute these actions, whether the item has been downloaded or not, as the payment provider has already determined that an unauthorised transaction has occurred. I want to be absolutely clear that Envato does not benefit from these events or retain funds from these transactions. In some cases we are also charged an additional fee along with the reversal (which we do not pass on to authors as part of this process).
What is Envato doing to protect authors from sales reversals? As part of an industry that is at the forefront of changes to the way people buy and sell goods online, we rely on the policies and processes that credit card companies and online payment providers have established. Handling the sales of digital goods can be a tricky business for all involved. We do want to reassure you that we are making every endeavour to deal with these challenges in a way that’s fair to our authors and buyers.
There are a number of other things we do to secure our Marketplace and make it a great place to do business. We can’t discuss our security practices openly like we do with other Marketplace practices. If we did we would be putting the Marketplaces (and authors) at risk and make the work we do behind the scenes ineffective. What we can tell you is that when a sales reversal is made known to us, we immediately disable the account that was used to purchase the item. We can also tell you that payment providers have their own set of processes in place to monitor patterns and prevent repeated unauthorised transactions from occurring and we actively work with our partners on ways we can mitigate this risk to the community.
I hope I’ve been able to assist with most of your questions, let me know if not.
Of course if you have concerns about a particular transaction on your statement please contact support and we will be happy to help.
Thanks for the clarification. I’ve got three reversals this month. Quite disturbing for my earning statement!
Thanks for the info. Btw, if the account is disabled for a reversal sale reason , couldnt this one open a new account with other name?? Its only a doubt
My part is to create products, your (envato) part is to deal with the buyers. Payment reversal, frauds, customers support, whatever is your job This is part of the deal and you get money for doing your part of the job. With small exceptions you’re doing your job quite well but this is not the point here.
We know banks are evil, we know payment systems don’t act fair when there’s money to lose but the point is that the risk is your part of the deal.
With this recent change for an author the risk is higher but benefits are the same. Please take one of the following options:
a) increase rate to cover my risk – If you don’t want the risk of fraud then I don’t see why you should get the same money as before
b) for new accounts, add delay in accessing purchased items on new buyers with no history in buying products. usually 24 hours
c) do as before and absorb the risk for your part of the job.
I want to be absolutely clear that Envato does not benefit from these events or retain funds from these transactions.
NOT TRUE. As stated above there’s a risk moved over the author back. This means a lot of corporate resources freed from the company time. And time means money. You don’t absorb anymore the losses derived from your part of the job. This provides great benefit in terms of money.
In some cases we are also charged an additional fee along with the reversal (which we do not pass on to authors as part of this process).
that will be really funny. For me to pay for that additional fee. Did the management took this in consideration?
For the authors that will stick with envato side. Think carefully what risks everybody should take, what are their part of the deal in this partnership, what everybody needs to do to earn his share from a sale.
Um … I just wanted to say that sale reversals are not reflected in the Featured File box in the profile page
@doru, we do talk about the potential of these types events in our terms so we haven’t added anything new as far as our agreement with our members. As I have mentioned previously, Envato had been covering the cost of the majority of these reversals. The exception being reversals of larger amounts that were passed to authors via a manual process.
@nCrafts, @codenegar & @TovioMedia, thanks for the pick up. I’ll have a look into it and will update on what’s happening here as soon as I can!
As always, thanks for your contributions
Hi all, @doru, we do talk about the potential of these types events in our terms so we haven’t added anything new as far as our agreement with our members.
this is not an issue of terms. terms allow envato to change rules when they like, how they like. I’m not raising an issue of terms here.
As I have mentioned previously, Envato had been covering the cost of the majority of these reversals.
And correctly did so! Because it was part of the things that are the reason you are getting the percentage from authors sales. No one said is easy to build, run, improve a marketplace, this cost money, so authors gives you a percentage of their sales to cover for this expenses and to get a profit out of this.