What to do with a chargeback.
Chargebacks happen for many reasons, but most happen because:
- The Item Was Not Received. The customer says that they never received the item they paid for.
- The Item Was Significantly Not As Described (SNAD). The customer reports that the item received is not what was ordered. For example, they ordered a red sweater but received a blue sweater.
- Unauthorized Transaction/Payment Reversal. The customer claims that an unauthorized person accessed their PayPal account or financial information and sent you a payment without their permission.
What happens when a customer files a complaint against me?
When a complaint has been filed with the credit card company they’ll notify PayPal and request a response. At that point, there are three basic steps in PayPal’s chargeback process:
- We’ll email you to let you know that a customer has filed a chargeback with their card company. You’ll also see a notification in your online Resolution Center.
- We’ll ask you to provide evidence to help answer the chargeback. The evidence needed varies depending on the reason for the chargeback, but could include proof of shipment or delivery, a transaction receipt, or communication between you and the buyer.
- Then, we’ll help submit the evidence to the credit card company, who’ll use it to make a decision.
Will I have to fight the Chargeback myself?
As long as you have a good reason to dispute the chargeback, we can help you build a case to take to the credit card company. Our chargeback specialists can give you relevant transaction details and walk you through the steps, or you can access them directly in the Resolution Center.
Note: Ultimately, it’s the card issuer, not PayPal, who gets to decide the outcome of the dispute over a chargeback.
What should I do if I receive a chargeback?
Here are the steps you want to take as soon as you realize there’s a chargeback on your account:
1. Log in to your PayPal Business account and visit the online Resolution Center. This is where the details of the chargeback, as well as status updates of any chargebacks, will be. This is also where you will upload any documentation requested. Make sure to respond within 10 days.
Tip: It’s always a good practice to get an online tracking number for all your shipments. For high value items, we also recommend requesting a signed delivery confirmation. You can proactively add the tracking information to your transactions in your PayPal account. Try to always provide all the information you have related to the transaction for a strong case.
3. If the credit card company sides with you, the buyer will be charged for the transaction and the money is returned to your account. If the credit card company sides with buyer, the transaction is cancelled and the buyer receives a full refund.
How long does it take to resolve Chargebacks?
Our goal is to resolve disputes as quickly as possible, but the process can be long—patience is key. Typically, it takes PayPal 30 days to process a chargeback, but the buyer’s credit card company can take up to 75 additional days to resolve the issue and make a final decision. While the dispute is in review, you can still continue selling, as long as your account has not been limited for any reason.
Be aware that you are charged a nonrefundable $20 fee whenever a buyer files a chargeback. If the transaction is protected by PayPal’s Seller Protection program, this fee is waived.
You can also access additional information by reviewing our FAQs at the bottom of this page. Additional information is also available in the User Agreement.
Frequently asked questions.
The amount of the Dispute Fee depends on the percentage of claims filed against your total sales in the previous 3 months. The Standard Dispute Fee will apply unless your disputes rate is 1.5% or more and you had more than 100 sales transactions in the previous three full months. If you fall into that category, the High Volume Dispute Fee would apply for each dispute.
The Standard Dispute Fee will be waived for Inquiries in the PayPal Resolution Center that aren’t escalated to a claim, those that are resolved amicably between the buyer and the seller, or those filed to PayPal directly as an Unauthorized transaction.
To learn more about disputes and claims and how to handle them, see our Help Guide.
Need more help?
How is the dispute rate calculated?
What is defined as a High Volume Dispute Fee & a Standard Dispute Fee?
How can sellers in the High Volume Dispute Fee scenario avoid being charged the fee for a dispute?
How will High Volume Dispute Fee merchants be treated differently than other merchants?
Where can I see the dispute rate for my PayPal account?
Where can I see the fee amount charged to my account and my case?
Will High Dispute Fee merchants be provided any notice prior to the implementation of the Dispute Fee?
Will fees be reimbursed if the merchant appeals and wins a case?
Does the Dispute Fee impact Chargeback fees on unbranded (DCC) PayPal transactions?
Instant Payment Notification is a message service that notifies you about updates to your PayPal transactions. You can use it to automate administrative functions, such as fulfilling orders, tracking shipments, and providing status updates.
Instant Payment Notifications can update you on the following items:
- Instant payments (including Checkout and direct credit card payments).  >
- eCheck payments.  >
- Pending payments.  >
- Recurring payments and subscriptions.  >
- Authorizations.  >
- Disputes, chargebacks, reversals, and refunds.
Instant Payment Notification is automatically included with PayPal Payment products, Checkout, and Standard Checkout.
To learn more about Instant Payment Notification, visit http://www.paypal.com/ipn/