P2P apps remind users that they should only transact with people they know, but of course users will transact with strangers and sometimes get ripped off. As highlighted on Bobsulivan.net, Venmo has quietly rolled out a program where for a fee of 3% of the purchase amount, Venmo will step in and help to negotiate situations where purchases made over its network that go sour, like non receipt of goods, damaged goods, or goods that are materially different from what the purchaser ordered.
All the gory details can be found on the Venmo site here.
Here’s the quick overview:
Sometimes purchases don’t go as expected. When you opt in to Refund Support for eligible purchases, we can help. Let us know within 30 days after your payment and we’ll work directly with the seller to get your money back for eligible items.
Examples of items that may be covered: You bought dress shoes, but ended up getting sneakers; you bought an authentic handbag, but got a knock-off; you paid for a massage, but the masseuse didn’t show up.
You’re covered if:
Your order was a lot different than it was described
You never received the item or service
You received the wrong item
The item got banged up during shipping
The item was missing parts and won’t work
The service wasn’t as described
This doesn’t cover unauthorized transactions, which are already covered by Reg E. This service appears to emulate the card networks’ chargeback process. I think it’s interesting that in this model, it’s the seller who is in the wrong, yet it’s the buyer who ends up paying. That 3% is kept by Venmo, regardless of the outcome of a transaction covered by the program.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group