Every once in a while something goes wrong with an order. This is a normal, expected part of doing business that is often the result of a simple misunderstanding or human error. When this happens, buyers may take action by opening a dispute.
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 cannot come to an agreement, PayPal Dispute Resolution can help them arrive at a solution both sides can agree on. 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 dispute can be escalated to a claim and PayPal will determine the outcome of the issue.
Step 1: Dispute notification
PayPal will notify you by email when a buyer opens a dispute. PayPal will place a temporary hold on all funds involved in this transaction until the dispute has been resolved or closed. Once a decision is final, these funds will either be released to you or refunded to the buyer.
Step 2: Your response
Review the dispute and post a reply with an explanation of what happened. Respond quickly and include suggestions on how to resolve the dispute.
Step 3: Working it out
Once a dispute has been opened, you and your buyer have 20 days to decide on a resolution. In most cases, sellers can work with their customers to find a solution you can both agree on. Once you have worked things out, the buyer closes the dispute. When disputes cannot be resolved, either party can escalate the dispute to a claim.
Claims give PayPal the authority to review the case and determine the outcome. Buyers have 20 days to file a claim from the time they open a dispute.
If your buyer files a claim against you, PayPal may ask you to provide some of the following information:
The delivery of this information is time sensitive, so do not wait until the last minute or you might lose the claim.
A chargeback is when a buyer asks their credit card company to refund a charge. PayPal does not decide the validity of the chargeback – that is the job of the card issuer. PayPal’s role is simply to collect information about the transaction and help you work with the card company to resolve the chargeback.
PayPal may ask you to provide the information needed to help you resolve the chargeback. As long as you are eligible for PayPal Seller Protection, PayPal will cover your loss even if you lose the chargeback.
While most buyers file claims and chargebacks for reasons they believe are legitimate, there are those who try to take advantage of the system. Some buyers may also be the victim of unauthorised use of their PayPal account or identity theft. PayPal covers PayPal account holders in the event of a claim or chargeback when your transaction meets the following criteria:
Seller Protection is available on eligible transactions only. Limits, terms and eligibility criteria apply. Learn more about PayPal Seller Protection.
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