This entire thread was copied from http://www.magicjacksupport.com/low-volume-problem-solved-t6997.html after trying it. Thanks to the author.
The volume level for magic jack aka headset is set to low, which is the reason we can hear them fine but they cannot.
Here is the fix:
1.) Click on the little speaker icon on your tray
2.) Click Mixer
3.) At the top click devices
4.) Click "Headset (2- Usb internet phone by tigerjet)"
5.) You should see to volume bars one with be under application Call magic jack softphone and then another called headset
6.) Turn headset all the way up and the magicjack will only go to 70
7.) call 909-390-0003
8.) Say anything and it will echo it back to you and if you lower the headset bar on the PC you will notice you volume becomes quilter.
XP USER AND Control panel method
I don't have any xp machines in my house so this may be a bit off
1.) start > Contol Panel
2.) Click Sound
3.) In the PLayback tab click "Headset" > Properties
4.) Go to the Levels tab and make at 100
5.) call 909-390-0003
6.) Say anything and it will echo it back to you and if you lower the headset bar on the PC you will notice you volume becomes quilter.