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.
Which merchants are eligible for Chargeback Protection?
To be eligible to sign up for Chargeback Protection, a merchant must have a business account with PayPal and have enabled credit card payments (unbranded processing).
How does Chargeback Protection work?
We’ll provide risk decision-making on all your online and mobile credit and debit card transactions and decline fraudulent payments. If an approved transaction is later identified as fraudulent, we’ll reimburse you for that loss.
- We’ll monitor checkout transactions  >
- We review credit and debit card transactions for risk  >
- We reimburse any chargeback fees if a transaction is later found to be unauthorized
How much does Chargeback Protection cost?
There are no yearly caps on losses, no annual or monthly contracts, revenue requirements, or cancellation fees.
|Plan > > >||Fee* > > >||Description > >|
| > > >|
> > >Chargeback Protection (Standard)
> > >
| > > >|
> > >0.40% per approved transaction
| > >|
> > >If a chargeback occurs, merchants must submit proof of shipment as requested by the Resolution Center to qualify for Chargeback Protection reimbursement.
> > >
*Fees are subject to change.
How does Chargeback Protection benefit the merchant?
Many merchants don’t have in-house expertise in fraud detection and prevention and outsourcing can be expensive. According to the LexisNexis® Risk Solutions 2020 True Cost of Fraud™ Study, on average, a merchant spends more than 3.00 USD to detect and prevent about 1.00 USD of fraud-not including the lost revenue from declined transactions that weren’t actually fraudulent. With Chargeback Protection, PayPal merchants can harness the experience and expertise we have from the billions of annual transactions on our network to spot and prevent risky transactions while maximizing revenue.
Which types of transactions are covered by Chargeback Protection?
Chargeback Protection applies to PayPal Commerce Platforms Advanced Credit and Debit Cards (ACDC) checkout and Braintree orders. PayPal Here transactions, Zettle transactions, and transactions for cash equivalents such as online poker chips for gambling or Visa cash gift cards aren’t eligible for Chargeback Protection.
What Chargeback types Chargeback Protection cover?
Chargeback Protection covers only unauthorized and fraud-related chargebacks as well as Item Not Received (INR). Non-fraud-related chargebacks (for example, broken item), Significantly Not as Described (SNAD), refund not processed, and duplicate charge) aren’t eligible for Chargeback Protection. You’re expected to reply to unauthorized and fraud-related chargeback disputes as usual in the PayPal Resolution Center.
What chargeback types Chargeback Protection doesn’t cover?
Chargebacks that aren’t related to fraud are not protected by Chargeback Protection, including Broken Item, Significantly Not as Described (SNAD), Refund Not Processed, and Duplicate Charge.
What are the differences between Chargeback Protection and Fraud Protection?
|Chargeback Protection > > >||Fraud Protection > >|
| > > >|
> > >Chargeback Protection is a built-in, risk decisioning tool available to eligible PayPal merchants.
> > >
> > >PayPal uses risk models and analysis in real-time to accept or reject transactions based on their risk level.
> > >
> > >PayPal will assume liability for any fraud or “item not received” chargebacks that may later occur.
> > >
| > >|
> > >Fraud Protection* is a built-in, fraud analysis tool given to all PayPal merchants at no charge.
> > >
> > >Merchants set risk rules and filters within the Fraud Protection tool, determining which orders to accept or reject.
> > >
> > >Merchants carry the liability for any chargebacks that may occur when using Fraud Protection.
> > >
* If you’re currently enrolled in Fraud Protection when you sign up for Chargeback Protection, we’ll automatically disable Fraud Protection in your account. You’ll no longer have access to the Fraud Protection dashboard and, should you enable Fraud Protection later, your historical data won’t be available.
Chargeback Protection is a fully managed risk solution that helps to reduce loss liability by offloading fraud analysis to PayPal. Starting August 2, 2021, merchants will be able to enroll* from within their account through the Manage Risk tab. After you enroll, if a chargeback occurs, PayPal will refund the disputed amount on eligible transactions. (Subject to additional fees).
*Merchants can enroll in Chargeback Protection from within their PayPal account. Merchants simply need to click on the 'Manage Risk' tab at the top of the page and select Chargeback Protection. Terms apply.
|Payment Solutions > > >||Fees > >|
|Advanced Credit and Debit Card Payments > > >||2.59% + fixed fee > >|
|Advanced Credit and Debit Card Payments with Chargeback Protection > > >||2.99% + fixed fee > >|
|Standard Credit and Debit Card Payments with Seller Protection > > >||2.99% + fixed fee > >|
|Payments Pro > > >||2.89% + fixed fee > >|
|Virtual Terminal > > >||3.09% + fixed fee > >|
|Braintree Payments > > >||2.59% + fixed fee > >|
American Express transactions:
The rate for PayPal processing online card payments with American Express will not change and will continue to be processed at a rate of 3.50%. The rate for Braintree processing online card payments with American Express will also be processed at a rate of 3.50%.
To view our current card processing rates effective August 2, 2021, go to our Merchant Fees page.
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/