Dispute resolution process.
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 in PayPal or by asking their credit card issuer to reverse the charge – what credit card issuers call a chargeback.
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.
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. This resolution system makes it easy for buyers and sellers to track, manage, and resolve disputes. It's a convenient process that helps to bring about the right solutions in a timely manner.
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 disputed can be escalated to a Claim and PayPal will determine the outcome of the issue.
If you’ve been notified that a customer has opened a dispute or requested a chargeback, read our guide to Resolving Disputes, Claims and Chargebacks to learn about the resolution process and what you need to do next.
You can also read our guide to Avoiding Disputes and Chargebacks to help prevent them from happening in the first place.
PayPal Seller Protection
While most buyers file claims disputes and chargebacks for reasons they believe are legitimate, there are those who try to take advantage of the system. PayPal covers US PayPal account holders in the event of a claim or chargeback when your transaction meets certain criteria.