How claims work

PayPal Editorial Staff

PayPal Editorial Staff

May 13, 2020

Zoomed into photo of an office cubicle, centered around a bulletin board with mechanical engineering plans for parts

Claims happen when a buyer complaint is escalated to PayPal or the buyer filed an unauthorized transaction. Learn why claims occur, how to respond to them, and what the claims process looks like.

If a buyer dispute can’t be resolved, either party can escalate it to a claim during the 20-day period. At this point, PayPal becomes directly involved and will make a decision using the information that’s provided. A buyer can also file a claim (without first initiating a dispute) if they feel their account has been used fraudulently. During the resolution process, we may ask either or both parties for more information via email.

Why do claims occur?

Claims are based on three factors:

  • Item Not Received (INR). In this case, the buyer is claiming they ordered and paid for an item but didn’t receive it.
  • Significantly Not As Described (SNAD). In this type of claim, the buyer is stating the item they received is significantly different than they expected, based on the seller’s description. For instance, the buyer ordered a red sweater but received a blue one instead.
  • Unauthorized Transaction. If a complaint is filed for this reason, it means the buyer’s account may have been compromised or hacked and someone made a purchase from the account without their permission.
How do I escalate a dispute to a claim?

If you can’t resolve a dispute with a buyer, you may feel the need to escalate it to a claim. To do so:

  1. Log in to your PayPal account.
  2. Go to the Resolution Center
  3. Click View next to the dispute you want to escalate.
  4. Click Escalate this dispute to a PayPal claim near the bottom of the page.
  5. Follow the instructions.
  6. Click Escalate to a claim.
How will I know if a claim has been filed against me?

If a claim has been logged, you’ll be notified via email. You’ll also see that a case is created in the Resolution Center.

How can I respond to a claim?

To respond to a claim:

  1. Log in to your PayPal account.
  2. Go to the Resolution Center.
  3. Click Respond in the Action column next to your claim.
  4. Select how you would like to respond and click Continue.

After you make a selection, follow the instructions. Keep in mind that once you upload the files, you won’t be able to view them again – you’ll just see a summary of the information you’ve submitted.

How can I help prevent a claim?

You can work to help prevent claims by following the same customer service tips we gave to help prevent disputes.

How will the claim be processed?

If a claim is filed, the seller is asked to respond within 10 days. If the seller doesn’t respond, the claim will automatically close in the buyer’s favor, and a full refund will be issued. If the seller does respond, PayPal will work to evaluate the information provided and determine the outcome of the claim. This process usually takes about 30 days, but more complex cases could take longer than 30 days.

Will I be penalized?

Having a claim filed against you doesn’t necessarily mean you’ll be penalized. There are no automatic fees levied against you, and your seller feedback won’t automatically be affected. However, if a claim rate is too high or other indicators are trending negatively, your account could be reviewed, and reserves or limitations could be put in place. A temporary hold may automatically be placed on money when a claim is opened. This hold will stay in place while you work with the buyer to resolve the claim and will be released back to you if the claim is settled in your favor. For Item Not Received (INR) claims, if you provide the relevant information as outlined in the Seller Protection Policy, and the claim is decided in your favor, the money will be released to you. Once a claim has been filed, the best thing to do is promptly provide any requested information.

Was this content helpful?

Sign Up for the PayPal Business Bootcamp

In partnership with three expert business owners, the Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.


We’ll use cookies to improve and customize your experience if you continue to browse. Is it OK if we also use cookies to show you personalized ads? Learn more and manage your cookies