Understanding Chargebacks |
What is a chargeback?
Chargebacks occur when buyers ask their credit card company to reverse a transaction that has already been approved. Common reasons for chargebacks include:
- Item not received. Buyer pays for an item but never receives it.
- Item significantly different. Buyer pays for an item but receives item significantly different than expected.
- Unauthorised use. A buyer's credit card number is stolen and used fraudulently.
A chargeback must be filed within credit card association regulations and timeframes.
Notified of a chargeback?
If you've received a chargeback, want to check the status of a chargeback, or just want to learn more about the process, visit the PayPal Resolution Centre.
How a chargeback works with a credit card payment through PayPal.
- Buyer's Credit Card Company
- Merchant Bank
- Chargeback Department
- Buyer requests chargeback from credit card company.
- Buyer's credit card company notifies PayPal's merchant bank of the chargeback and debits funds from PayPal.
- PayPal places funds related to the chargeback on a temporary hold from seller's PayPal account.
- PayPal immediately emails seller for additional information that can be used to dispute the chargeback.
Chargebacks and sellers.
Sellers who accept credit card payments run the risk of receiving chargebacks. Most sellers factor potential chargeback losses into the cost of doing business.
Chargebacks and PayPal.
All chargebacks are actually a process initiated outside of PayPal.
PayPal provides tools, tips and protections to help sellers understand, respond to, and fight unwarranted chargebacks.
We have also assembled a team of PayPal specialists who will help you put together the information you need to dispute a chargeback.
What to expect:
- If a buyer files a chargeback against you for a credit card transaction through PayPal, we'll email you as soon as we're contacted by the credit card company.
- The funds in question will be held temporarily, as we work with you to resolve the chargeback with the buyer's credit card company.
- If you dispute the chargeback, our specially trained chargeback team will help you build a powerful case.
- The resolution process can take 75-100 days, depending on the credit card company.
- If the credit card company decides in your favour, PayPal will immediately transfer the funds back to you.
Part 2: Minimising Chargebacks
Additional resources for sellers.
To learn more about Selling Safely, go to:
- Chargeback FAQ. For specific chargeback questions.
- How We Help Protect Sellers. How PayPal helps keep your transactions safe.
- Tips to Sell Securely. How you can ensure that a transaction goes smoothly.
- Resolving Issues for Sellers. How to respond to buyer disputes, claims and chargebacks.