What You Need To Know Before Paying With Bitcoins

Cryptocurrencies have gained immense popularity and Bitcoin – the original cryptocurrency continues to be the most widely recognized by the people. If you have recently shopped online, you might have come across some websites that let you pay with Bitcoins, such as Twitch, Microsoft, Overstock, etc.

Paying with Bitcoin or any other digital currency is fast and convenient but comes with a risk. The value of cryptocurrencies is always fluctuating – sometimes sharply – depending on demand. Additionally, payments made with digital currencies are non-reversible and are not protected legally as other traditional payment methods. Therefore, it is important to know who you are buying from and what are their policies regarding refunds, returns, and disputes. Because once you click “pay”, you cannot get the money back unless the merchant agrees.

According to research, two common issues occur when you pay with Bitcoin. First, delays in product delivery or cancellations by an online merchant. Second, merchants refuse to refund in cryptocurrency and pay in-store credit instead.

Here are some tips for people who are willing to use Bitcoin as a payment method:

Know the Merchant

  • Check out all the relevant information related to the seller, such as location, phone number, etc., to prevent issues regarding the payments or refunds.
  • Find out if the payment will directly go to the merchant or go through a payment processor. This way you may get additional protection.
  • Bitcoin transactions are non-reversible, they can only be refunded by the person who received the fund. Therefore, it is important to do business with individuals and organizations you can trust or have a well-established reputation.

Know the Refund, Return, and Data Protection Policies

  • Damaged products – Know how you will get the refund in case of a damaged product. Which payment mode will the merchant use to make a refund? Will it be in digital currency, store credit, or fiat currency?
  • Amount of refund – The value of bitcoins is volatile and fluctuates over a short period of time. Before paying with bitcoins, ask the exchange rate at which the merchant will make the refund.
  • Processing refund – It is easier to refund a credit card purchase because the merchant usually credits the account. But with bitcoins, it is more complex because people change their digital wallet accounts. The merchant cannot always send back the bitcoin to where it came from.
  • Data protection – Bitcoin transactions are shared publicly on a decentralized ledger that includes the amount and wallet address of the sender and the recipient. Before paying with bitcoins, read about the merchant’s privacy policy. If there is a payment processor involved, read about their privacy policy as well to ensure data safety.

If you have any questions related to the bitcoin payment procedure, please write to us.

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