Resolving disputes, claims, and chargebacks.

Occasionally, something goes wrong with an order.
We’re here to guide you if it does.

Potential situations.

Disputes and claims

If a customer paid for an item but didn’t receive it or received an item but it’s significantly different than expected, he or she may open a dispute in the Resolution Center. When the dispute can’t be resolved, either party can escalate it to a claim within 20 days. At this point, PayPal becomes directly involved and will make a decision using the information that’s provided.

Chargebacks

Buyers may take action by asking their credit card issuer to reverse the charge (credit card companies call this a “chargeback”). At this stage a buyer asks his or her bank for a refund and does not involve the seller.

Disputes and chargebacks have the same net effect – a hold is placed on the sale’s funds – but their resolution processes are slightly different. To help prevent these issues from happening, read our guide to helping avoid disputes and chargebacks. But if a customer files a dispute or chargeback, here’s what you need to do:

Resolving disputes.

In most cases, the easiest way to settle a dispute is for buyers and sellers to connect, work together to figure out what happened, and come to an agreeable solution. Take a look at our video to see how to resolve a dispute.

Tips on successfully communicating with customers:

Begin conversations with an open mind and listen patiently to what buyers have to say. Many problems result from miscommunication and simple human error.

PayPal dispute resolution process.

When buyers and sellers can’t come to an agreement, we can help them arrive at an agreeable solution. Once a buyer initiates the dispute resolution process, we’ll hold the transaction’s money until the dispute is resolved. If buyer and seller can’t reach an agreement, the dispute can be escalated to a claim. At that point, we’ll step in to determine the issue’s outcome. Here’s how it works:

1Dispute notification

We'll notify you by email if a buyer opens a dispute. Then we’ll place a temporary hold on all funds in the transaction.

2Your response

Review the dispute and reply with your explanation of what happened. Respond quickly, and include suggestions on how to resolve the dispute.

3 Working it out

Once a dispute has been opened, you and your buyer have 20 days to come up with a resolution. In most cases, this is all that’s needed. The buyer closes the dispute once you’ve worked things out.

Escalating a dispute to a claim.

Whether you’re a seller or a buyer, claims allow PayPal to investigate the case and determine an outcome. Buyers have 20 days from the time they open a dispute to file a claim. If a buyer files a claim against you, we may ask you to provide some of the following information:

  • A third party shipping receipt, tracking number, or signature confirmation to prove that an item was delivered
  • A signed contract or other proof to show that services were provided
  • A signed contract or other proof to show that services were provided
  • If you sold a digital good, we may request evidence that the buyer downloaded your product

Download our guide

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Take a look at our other guides to help you
manage your business.

Avoiding fraudulent orders

Learn more

Avoiding disputes, claims and chargebacks

Learn more

Our information does not constitute legal, financial or business advice. We are not responsible for your decision on disputes and chargebacks. Always do your own research and seek professional advice if needed.

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