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:
- 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.
- Once you’ve submitted proof, one of our chargeback specialists will review and take the necessary actions on the claim for you. The goal is to recover funds from the buyer’s credit card company, but it’s still up to the buyer’s credit card company to make the final decision.
- 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.
- A customer disputes a transaction (issues a chargeback) with their bank or card issuer asking for a full or partial refund.  >
- The transaction amount is debited from the merchant’s bank account and goes back to the customer’s bank account. The associated fees for processing the chargeback are also debited from the merchant’s bank.  >
- The merchant is notified of the chargeback and can choose to either accept the chargeback or dispute it with documentation showing that the transaction was legitimate. The time allowed to respond is limited so review the required submission date carefully. If you do not respond by the deadline, the dispute is expired and the buyer will keeps the funds.  >
- If the merchant wins the case, the transaction amount will be returned to their bank account (the associated processing fee will not be refunded); if the merchant loses or accepts the chargeback, the customer will keep the funds.
A customer might file a chargeback because they:
- Didn’t receive their item.  >
- Received a damaged or defective item.  >
- Don’t recognize a credit card charge.  >
- Were charged more than once for something.  >
- Didn’t authorize a payment.
A retrieval is also issued by the customer, but it is just a request for information about an unidentifiable charge. In the event of a retrieval, funds are not removed from the merchant's bank account. The merchant is notified of the retrieval request and they can then respond with the requested information.
A pre-arbitration, or pre-arb, happens when a chargeback is filed, the merchant wins, and then the customer disputes the charge for a second time. While you can dispute pre-arbs, it's been our experience that merchants rarely win these cases without the introduction of new and compelling evidence.
Responding to all credit card chargebacks are handled through your PayPal powered by Braintree control panel. Within the Control Panel you'll have the option to either Accept or Dispute the chargeback. If disputing you will have the opportunity to provide additional comments and upload documentation to support the dispute. Please do not refund your customer outside of the chargeback process. If you have already refunded your customer, click Dispute and provide the transaction ID of the refund you have issued.
Chargebacks, retrievals, and pre-arbitrations
The bank that manages the chargeback or pre-arbitration will charge a non-refundable $15 fee regardless of whether you win the dispute. This fee only applies to chargebacks and pre-arbs; retrievals do not result in a fee at this time. For more information on chargebacks, look here.
To view your open or closed chargebacks:
- Open your control panel.  >
- Click Transactions in the top left corner.  >
- Click Disputes.  >
- Choose what options you want in the drop-downs.
Here's how you access your financial summary report.
- Click Reports.  >
- Under Financial summaries click Financial.  >
- Choose a date range and select Create Report.
Detailed Category Definitions:
|Category > > >||Sub-Category > > >||Description (if applicable) > >|
|Sales Activity > > >||Payments Received > > >||All payments received which complated or cleared within the date range specified. > >|
| > > >||Refunds Sent > > >|| All refunds issued which affected the balance within the date specified. > >|
> > >In the case of eChecks: the balance is shown on the day the payment cleared. This recorded as a transfer to the PayPal balance and a subsequent refund deducted from the PayPal balance.
|Fees > > >|| > > >||Any amount officially charged as a fee. > >|
| > > >||Payment fees > > >||Fees charged for payments received and fees charged for sending a Mass Payment. > >|
| > > >||Refunded fees > > >||Fees refunded (where applicable) when refunds are issued. > >|
| > > >||Chargeback Fees > > >||Fees charged when a Chargeback is received. > >|
| > > >||Other fees > > >||Withdrawal Fees, Cash advance fees, ATM withdrawal fees, other fees tied to specific products. > >|
|Dispute Activity > > >|| > > >||Any disputes and claims, chargeback or other similar account activity, including temporary holds related to these. > >|
| > > >||Chargebacks & Disputes > > >||Includes reimbursements in chargebacks > >|
| > > >||Dispute Reimbursements > > >||Temporary holds released back to you. > >|
|Purchase activity > > >|| > > >|| > >|
| > > >||Online Purchases > > >|| > >|
| > > >||Refunds Received > > >|| > >|
| > > >||Debit Card Purchases > > >||Purchases with PayPal Debit card only > >|
| > > >||Debit Card Returns > > >||PayPal debit card payments refunded or reversed > >|
|Transfers and Withdrawals > > >|| > > >|| > >|
| > > >||Currency Transfers > > >||Currency Conversions > >|
| > > >||Transfers to PayPal Account > > >||Money transfered from your bank to PayPal, canceled withdrawals > >|
| > > >||Transfers from PayPal account > > >||Bank withdrawals > >|
|Other Activity > > >|| > > >|| > >|
| > > >||Money Market Dividends > > >||Dividends (money market is no longer an active PayPal product) > >|
| > > >||Debit Card Cash Back > > >|| > >|
| > > >||Other > > >||Withdrawal fees where applicable, credits and adjustments to your PayPal account by PayPal. > >|
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/