Security

Frequently asked questions – chargebacks.

What is a chargeback?

A chargeback, also known as a reversal, is when a buyer asks their credit card issuer to reverse a transaction after it has been completed. It is available only to users who make a payment funded by their credit or debit card.

There are three main reasons a buyer will do this:

  1. The item did not arrive.
  2. The item was significantly different than advertised.
  3. Their credit card was used without their permission to purchase the item fraudulently.

Chargebacks are initiated and handled by the buyer's credit card issuer-not by PayPal-and therefore will follow that company's regulations and timeframes. That said, PayPal often plays a role in resolving chargeback disputes.

What’s the difference between a chargeback and a PayPal dispute?

The credit card issuer decides who wins the chargeback, and not PayPal.

A PayPal dispute is the first step in the PayPal buyer complaint process. During the dispute phase, buyers and sellers "meet" in the PayPal Resolution Center to try to come up with a mutually acceptable solution.

What is the difference between a chargeback and a PayPal claim?

The credit card issuer decides who wins the chargeback, and not PayPal.

A PayPal claim is the second step in the PayPal buyer complaint process. If a buyer and seller cannot resolve their dispute on their own, the buyer may escalate the dispute to a claim. PayPal will then provide a final decision.

Seller Chargeback FAQs

What are some ways to avoid chargebacks?

  • Ship to the buyer's address listed on the Transaction Details page and retain proof of delivery that can be tracked online.
  • Describe the item you are selling accurately, and in as much detail as possible. Include pictures, measurements, and other relevant details.
  • Get to know your customers, and respond promptly to their requests.
  • Save all your customer and transaction-related emails and correspondence.
  • Publish your return policy in clear and simple terms, and include it in your correspondence with customers. Please note: some laws and credit card issuer policies stipulate that buyers have chargeback rights for merchandise that is not delivered or is defective, even if your policy indicates that all sales are final and that you do not allow returns.

You'll find more helpful tips on safer selling here.

Why do some chargebacks occur long after a payment has been received?

Certain laws and credit card issuer policies allow buyers to file chargebacks weeks or months after the original transaction took place. If a buyer waits and files later, you may encounter a temporary hold on funds in your PayPal account, relating to a transaction from long ago.

How will PayPal let me know a chargeback has been filed against me?

  1. The buyer's credit card company will notify PayPal.
  2. We will immediately email you (the seller).
  3. You can then log in to your PayPal account and go to the Resolution Center to monitor the status of the case, and potentially provide information to help resolve the matter. PayPal may also help you fight against the buyer's credit card company.

Certain laws and credit card issuer policies allow buyers to file chargebacks weeks or months after the original transaction took place. If a buyer waits and files later, you may encounter a temporary hold on funds in your PayPal account, relating to a transaction from long ago.

What happens to my funds when a chargeback is filed against me?

A temporary hold is placed on the funds in question until the matter has been resolved. This means you cannot withdraw or spend these funds until the dispute has come to an end.

If the dispute is found in your favor, the hold will be immediately released, and you'll have full access to your funds.

If the dispute is not found in your favor, the funds will be removed from your account and credited back to the buyer.

Please note - it may take your buyer's credit card company up to 75 days to resolve a chargeback and come to a final decision.

Can receiving a chargeback impact my eBay feedback?

Not directly, as the chargeback system is provided by third-party credit card companies, and is completely independent from eBay feedback. However, a buyer is free to provide feedback at any time - and if they've had a bad experience, they might have something to say about it.

What information should I provide to increase my chances of winning a chargeback dispute?

  • Proof of delivery, such as postage or online tracking numbers.
  • Copies of the original item or auction description, including photos.
  • Proof that the buyer was already refunded.
  • Proof that the buyer was given a replacement product.
  • Any buyer correspondence or feedback.
  • Any agreements signed or accepted by the buyer at the time of purchase.
  • Any return policy information that was communicated to the buyer.

If a PayPal dispute or a PayPal claim is decided in my favor, will I be covered against any related subsequent chargebacks?

PayPal may protect you against any future claim, chargeback, or bank reversal the buyer files in relation to that particular transaction. To have protection, you must honor the agreements you made with the buyer during the dispute resolution process. But we won't be able to offer protection if the claim has not been resolved by the time the chargeback is received.

Does PayPal dispute every chargeback with the buyer’s credit card company?

PayPal will generally help you fight against unwarranted chargebacks, but we also reserve the right not to dispute every chargeback - especially when a dispute is unlikely to be successful.

Where can I get more information about chargebacks?

Check out the PayPal Chargeback Guide for a closer look.