Understanding disputes.

Apr 10 2018 | PayPal editorial staff

Every once in a while something goes wrong with an order. This is a normal, expected part of doing business that’s often the result of a simple misunderstanding or human error. When this happens, buyers may take action by opening a dispute.
Disputes generally fall under three categories:
  • Item Not Received. A buyer pays for an item but never receives it
  • Significantly Not As Described. A buyer receives an item that’s significantly different than what they ordered.
  • Unauthorized Transactions. A buyer claims a purchase was made without their consent.
In most cases, the easiest way to settle a dispute is for buyers and sellers to work together to figure out what happened and to settle their differences. This can help prevent holds from being placed on your account and can go a long way in keeping your customers happy.

Get tips on successfully communicating with customers.
  • Presume good faith. ​Begin the conversation with an open mind and listen to what the buyer has to say before making any assumptions. Many problems result from miscommunication and simple human error.
  • Be constructive. Make it clear to your buyer that you want to find a resolution, and your customer will usually reciprocate. This early show of mutual respect should make the rest of the conversation more productive.
  • Stay focused on solutions. If your patience is wearing thin, resist the temptation to give your customer a piece of your mind – it will only make it harder for you to come to an agreement.
  • Think long term. Not every battle is worth fighting. If you give the buyer a break today, you may open the door to more business opportunities tomorrow.
  • Preempt disputes. The Resolution Center allows you to enter messages that all your buyers will see before they can open a dispute. For example, if you post a message that says, “All shipments out of Buffalo are currently delayed due to the blizzard,” you give your buyer an opportunity to understand the situation before filing a dispute.

PayPal Dispute Resolution Process.
When buyers and sellers can’t come to an agreement, PayPal Dispute Resolution can help them arrive at a solution both sides can agree on. Once a buyer initiates the dispute resolution process, PayPal holds the money for that transaction until the dispute is resolved. If the dispute cannot be resolved between the buyer and seller, the dispute can be escalated to a claim, and PayPal will determine the outcome of the issue.
 
Here’s how it works:
Step 1: Dispute notification.
PayPal will notify you by email when a buyer opens a dispute. PayPal will place a temporary hold on all funds involved in this transaction until the dispute has been resolved or closed. Once a decision is final, these funds will either be released to you or refunded to the buyer.
 
Step 2: Your response.
Review the dispute and post a reply with an explanation of what happened. Respond quickly and include suggestions on how to resolve the dispute.
  • If the buyer claims a purchase was made without their consent, review the claim and provide a response within seven days.
  • If you haven’t shipped the order, you can simply refund the payment and show PayPal proof of the refund.
  • If you have shipped the order, provide us with a copy of your shipping receipt of online tracking number – make sure the address on the shipping receipt matches the customer’s address listed on the PayPal Transaction Details page.
Step 3: Working it out.
Once a dispute has been opened, you and your buyer have 20 days to decide on a resolution. In most cases, sellers can work with their customers to find a solution you can both agree on. Once you’ve worked things out, the buyer closes the dispute. When disputes can’t be resolved, either party can escalate the dispute to a claim.

Escalating a dispute to a claim.
Claims give PayPal the authority to review the case and determine the outcome. Buyers have 20 days to file a claim from the time they open a dispute.

If your buyer files a claim against you, PayPal may ask you to provide some of the following information:
  • A third-party shipping receipt, a tracking number, or a signature confirmation to prove that an item was delivered.
  • Proof that you delivered a replacement or issued a refund if the buyer received their order but there was a problem with it.
  • A signed contract or other proof to show that services were provided.
  • Evidence to show that the buyer downloaded your product if you sold a digital good.
The delivery of this information is time sensitive, so don’t wait until the last minute, or you might lose the claim.
 
Resolving chargebacks.
A chargeback is when a buyer asks their credit card company to refund a charge. PayPal doesn’t decide the validity of the chargeback – that’s the job of the card issuer. PayPal’s role is simply to collect information about the transaction and help you work with the card company to resolve the chargeback.
  • Buyers can file chargebacks up to 120 days or more after they placed an order.
  • If you receive a chargeback, you’ll have 10 days to answer it.
  • Chargebacks are usually resolved in a few weeks but can take up to 75 days or more.
PayPal may ask you to provide the information needed to help you resolve the chargeback. As long as you are eligible for PayPal Seller Protection, PayPal will cover your loss even if you lose the chargeback.
 
PayPal Seller Protection.
While most buyers file claims and chargebacks for reasons they believe are legitimate, there are those who try to take advantage of the system. PayPal covers U.S. PayPal account holders in the event of a claim or chargeback when your transaction meets the following criteria:
  • Your transaction is marked either eligible or partially eligible. (You can check the status on the Transaction Details Page.)
  • Your primary residence listed in your PayPal account is in the U.S.
  • The item is a physical, tangible good that can be shipped.
  • You ship the item to the shipping address listed on the PayPal Transaction Details page.
  • Keep proof of shipment and delivery in the form of a third-party shipping receipt or tracking number; for payments more than $750 USD, you also need a signature confirmation of delivery.
Please note: Intangible items, such as digital goods and services; PayPal Direct and Virtual Terminal payments; and items prohibited by the PayPal User Agreement are not covered by PayPal Seller Protection. Learn more about PayPal Seller Protection.

 
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

Frequently asked questions.

Account Activities

Where do the funds from a Venmo transaction go? Will I see them in my PayPal account? 
Your Venmo payments are handled in the same way as other PayPal transactions, and will be placed in your PayPal account. They are also subject to the same rules as other PayPal transactions, including the rules on holds. Please note that at launch, Venmo-funded payments will not be specially designated in your account history or reporting - they will look like regular PayPal transactions. We may add a special designation to your transaction history or reporting in the future.  
  
How do I track Venmo disputes and chargebacks? 
You can track all of your disputes, including Venmo disputes, through the PayPal Resolution Center. The chargeback and dispute process for Venmo payments is generally the same as the process for PayPal payments, except for that the Venmo Authorized Merchant Payment Protection policy applies, rather than the PayPal Purchase Protection Policy.
 
How can I process a return from a Venmo payment? 
Returns for Venmo payments can be handled the same way they are for PayPal payments. 
 
Technical
 
Can I disable Venmo? 
PayPal is continually launching new products and services to enable more ways to pay. It is not currently possible to opt out of accepting Venmo through your PayPal integration as we continue to deliver expanded value for our customers and merchants. 

Can Venmo be tested on Sandbox?
No. Venmo doesn't currently have a Sandbox environment.
 
Can I change the design of the Venmo or PayPal button?
The design of the Venmo button and PayPal button will not be editable. 
 
Why can’t I have a separate Venmo button? 
PayPal currently offers the ability to have a separate Venmo button by integrating the Braintree SDK. To learn more about the Braintree SDK, please click here
 
How will my customers access Venmo if I don’t have a separate button? 
Once your customer has enabled the ability to pay with Venmo in their Venmo app, they will be able to complete their purchase using Venmo after selecting the PayPal Checkout button on your site. 

Will buyers see the Venmo-PayPal button when they try to access my website from their desktop or laptop computers?
No. The Venmo dual button is visible only on eligible mobile browser websites for all eligible Smart Payment Button merchants.

Can buyers pay with Venmo on a mobile device via a non-Smart Payment Button?
Yes. Upon redirect to PayPal, opted-in users will be presented with PayPal and Venmo options.
 
How do I sign up to accept payments through Venmo? 
If you already accept PayPal payments on your website, you do not need to do anything to accept Venmo payments. PayPal will utilize your existing PayPal integration to automatically deliver Venmo as a payment option to your customers. 

Is Venmo available through Smart Payment Buttons on Canadian merchants' websites?
Currently, Venmo payments are available in the US only.

Can Venmo be vaulted and used for Subscriptions and Recurring Payments?
As of now, no. Venmo doesn't support Billing Agreements, but is expected to do so by mid-2018.
 
I have already integrated Venmo through the Braintree SDK. Will I also get Venmo through my PayPal integration? 
No. Venmo as a payment method will not be available through your PayPal integration if you have integrated Venmo through the Braintree SDK.

Create a Customer Service Message to help prevent disputes and claims

Providing great customer service can go a long way and can even help prevent disputes and claims. If customers can get in touch with you about a problem with their purchase, they will be less likely to file a dispute or claim. Use the Customer Service Message to tell customers how to get in touch with you or to notify them about shipping delays. You can provide your customer service phone number, email address or support web site in the message. Customers will see this information before they submit their dispute or claim.

Here are some example messages:

  • Shipments to New York may be delayed by 5-7 days because of the weather.
  • To request a refund, please contact our Customer Service department at 1-800-888-8888 or support@bizname.com.

How to create a Customer Service Message

  1. Click Settings.
  2. Click Account preferences under "Account & Security" on the left of the page.
  3. Click Update beside"Customer service message."
  4. Enter your Customer Service Message and contact information.
  5. Click Preview to see how your Customer Service Message will be displayed to customers.
  6. Click Back to editing to return to the previous page and edit or save the message.
  7. Click Save once you are happy with how your message is displayed.
You can communicate directly with your buyer through a message board in the dispute case. Here's how to respond to a dispute:
  1. Go to Resolution Center.
  2. Click View under "Action" next to your case.
  3. Respond to the buyer and enter any relevant information (such as tracking information), and then click Send.

What's Next?

You have 20 days from the date the dispute was opened to resolve it with your buyer. If your buyer isn't responding or you can't come to a resolution, you can escalate your dispute to a claim. If you escalate your dispute to a claim, PayPal will review the case and decide the outcome.

You can manage your dispute in the Resolution Center by communicating with the buyer and providing additional information.

We understand disputes and claims are never ideal and can be confusing. Please refer to our timeframes for additional information and timelines on the disputes and claims process.

Before disputing a PayPal Credit purchase, we recommend attempting to resolve the issue with the merchant. If you aren’t able to do so, you have the following options to submit a dispute:

  • Dispute with PayPal through the Resolution Center.
  • Dispute directly through PayPal Credit.
    • If you file a dispute through PayPal Credit, the transaction will no longer be covered under PayPal Purchase Protection.

Here’s how to initiate a PayPal dispute.

  1. Go to the Resolution Center.
  2. Click Report a problem.
  3. Select the reason for your dispute and click Continue.

If your PayPal Credit purchase was made through PayPal but isn't showing up on your PayPal account, send us a secure email or call us.

If you used PayPal Credit outside of your PayPal wallet, then you’ll have to dispute directly through PayPal Credit.

Here's how to file directly with PayPal Credit.

Don’t see your PayPal Credit purchase on your PayPal account? Email us by clicking Contact at the bottom of any PayPal page.

You must notify us of any potential errors no later than 60 days after the error first appeared on your billing statement. You can email us, but if you do, we are not required to investigate any potential errors and you may have to pay the amount in question.