Every transaction that goes through the Paddle system is allocated a fraud score. The score is dependent upon how likely it is that the transaction is a case of card misuse or fraud. This score is increased by a number different factors including but not limited to; recent fraudulent transactions on the card, recent transactions on the card under a different name, or a number of recent transactions on the same card at varying locations.

If the fraud score is deemed too high, our platform will flag the transaction. For more information on flagged transactions, see here

Beyond this, Paddle also uses various 3rd party anti-fraud softwares to ensure Paddle is secure, and to prevent fraud/malicious checkout activity.

Paddle takes claims of intellectual property (IP) e.g copyright, patent, or trademark infringement very seriously. If you are an IP owner, suspecting a Paddle vendor of infringement on your IP, it is of course your right to issue a DMCA takedown notice.

If you wish to issue such a notice, please contact us, including the following details:

• Your company name, registration number and address
• Proof of IP ownership
• A link to where your IP can be found on your website
• A link to the vendor’s website for which you suspect infringement

Upon receipt of this information, Paddle will begin an investigation. Paddle will forward details of your claim on to the vendor and ask for proof of rights to sell the product(s) in question.

In the absence of sufficient proof, or if Paddle does not hear back from the vendor within 24 hours, Paddle will suspend the vendor’s checkout until such unequivocal proof is supplied.

Paddle will endeavour to keep all parties updated throughout the investigation.

Orders that reach a certain fraud score will be flagged for manual approval by our support team. The team is there to investigate suspicious purchase / checkout activity, and ultimately to protect you from malicious customers.

The support team will manually investigate any orders flagged, approving orders they deem legitimate, and blocking/canceling any orders deemed fraudulent.

After completing the checkout process, if a customer’s order is deemed potentially fraudulent, they will be informed through a notification on the checkout and via email that their order has been flagged for manual approval.

At this point, Paddle will put an authorization hold on the customer’s money in their payment account for the transaction. This will then only be processed if the flagged order has been manually approved, and the customer is charged. If the flagged order is deemed fraudulent or illegitimate, the money is released back to the customer via their method of purchase, and they are not charged.

How long does it take for flagged orders to be handled?

Typically flagged orders are handled by a member of the team within 1-2 hours, but can take up to 12 hours.

If a customer contacts you regarding their flagged order, or they require the product as a matter of urgency, they can contact our support team here with the email address they have used to purchase the product.

Can I be notified of flagged orders?

Vendors can subscribe to the “High Risk Transaction Created” and “High Risk Transaction Updated” alerts in order to be notified of flagged orders via webhook and/or email. You can additionally be notified of this via the Checkout.PaymentComplete checkout event.

Disputes - also called chargebacks - occur when a buyer contacts their bank or PayPal to dispute a charge.

This can be for many reasons, that include but are not limited to:

• Fraudulent transactions
• Unrecognised charges
• Disputes against recurring payments
• Disputes against the quality of the product

Disputes are a common part of dealing with online payments and are especially common in the world of software. We recommend that you try to resolve any buyer complaints in the early stages and issue appropriate refunds swiftly to avoid issues escalating into chargebacks.

It’s important that you keep your dispute rate low. To learn more on how to do so, please ensure that you read the “Best Practices” section on our Seller Handbook.

The average dispute rate is in the region of 0.1-0.3% of transactions, however, a figure below 0.65% is acceptable to the card payment networks. When a dispute occurs, Paddle reviews each dispute on a case by case basis and - if appropriate - contests the disputed funds on your behalf by submitting the relevant documentation to the payment processor.

Please note that all chargebacks incur a fee of $15, £15 or €15 for card payments and $20, £20 or €20 for PayPal transactions, depending on the currency the buyer was charged in. When a chargeback is received, the chargeback fee is passed onto you, along with the total amount of the disputed transaction is deducted from your Paddle balance. If we win a chargeback case for you, we refund the original transaction amount and chargeback fee to your balance.

Our aim is to protect Paddle sellers from fraud and help keep dispute rates within an acceptable threshold. We utilize third-party prevention tools that provide an additional layer of fraud protection to monitor and intercept transactions that have a confirmed chargeback risk as a result of fraud.

In the event we receive an alert from one of our partners, we automatically refund the transaction to the original card, to avoid receiving a chargeback and stay within the acceptable chargeback ratio. Each alert incurs a $15, £15 or €15 fee, which is deducted from your Paddle balance. This helps keep your account’s dispute ratio within an acceptable threshold, avoiding penalties that can include account closure.