How To Resolve A PayPal Dispute

NoWhen we talk about chargebacks, we’re usually talking about payments made by credit or debit card. However, this is by no means the only way e-commerce merchants get paid.

 

One of the most common alternative payment methods is PayPal, and like credit cards, PayPal payments are controversial. Sellers may encounter different types of payment disputes with PayPal. PayPal disputes can escalate into claims, and chargebacks for payments used to fund PayPal transactions can lead to bank claims.

 

Fortunately, merchants are not vulnerable when a dispute robs them of their hard-earned income. By following the rules carefully and providing the right evidence, merchants can resolve a PayPal disputes.

Let’s take a look at the different types of payment disputes that can occur with PayPal and how to resolve a PayPal disputes, resolve disputes, and recover revenue.

 

What is a PayPal dispute?

If buyers are not satisfied with the transaction, they can file a dispute with the Paypal Resolution Center. The seller receives a message explaining the buyer’s problem and can then issue a refund or offer other ways to resolve the dispute.

 

If a new call-to-action seller ignores the dispute or fails to provide a satisfactory resolution to the buyer, and the buyer has 20 days to escalate the dispute to a lawsuit. Sellers pay an $8 dispute fee each time they receive a dispute, but sellers with a particularly high percentage of disputes (over 1.5%) can double the fee.

 

What is PayPal’s requirement?

After 20 days, disputes can be moved to a claim for both parties. PayPal will collect information from buyers and sellers, investigate claims, and ultimately decide whether to cancel the transaction.

 

If a buyer claims a purchase is fraudulent, Paypal files the claim directly instead of starting a dispute. Therefore, dispute fees will not apply. As with any claim, PayPal will investigate and attempt to determine if the transaction was indeed fraudulent.

 

What is a PayPal bank claim?

When buyers make purchases with PayPal using a debit card or bank account, they can file a dispute directly with their bank and request that the transaction is reversed.

 

When they do, the money is taken from the seller’s account and the seller is charged a $20 fee. To get the money back, the seller must provide documents that can be presented to the bank to prove that the transaction was legitimate.
However, it will not refund the dispute charge fee.

What is a refund?

A chargeback is the forced reversal of a credit card transaction. If the bank detects signs of fraud or merchant errors, they are initiated by the cardholder and carried out by the issuing bank.

Buyers generally have 120 days to submit a refund request for Visa and Mastercard credit card purchases, including PayPal transactions paid by credit card. From the seller’s point of view, the refund for such transactions will be received as a bank claim.

 

If sellers want to fight chargebacks, they need to provide solid evidence to prove the claims are valid. The merchant uploads this file to the PayPal Resolution Center, where the card issuer makes the final decision. Once they make a decision, they notify PayPal, and PayPal notifies the seller.

 

How to resolve a PayPal disputes?

If you do business with PayPal, here are five things you can do to reduce disputes and resolve them successfully.

Respond to buyer emails as soon as possible.
Disputes often arise and turn into claims or refund requests because sellers do not respond.

 

Serve your customers and do your best to resolve disputes (for any reason) before buyers involve PayPal or their bank.

 

Download your copy of the eCommerce Fraud Prevention Introductory Guide

 

Join the PayPal Seller Protection Program. This program has certain eligibility requirements, but if you meet the requirements, it provides good protection against many transaction problems.

 

If PayPal asks you to provide written evidence, make sure you do so promptly. Once a buyer initiates a chargeback, the seller only has 10 days to respond.

Upload all relevant evidence to the PayPal Resolution Center before the deadline, otherwise, PayPal will not be able to include it in its decision.

 

Contact the buyer directly and try to resolve the issue with them. Buyers can cancel chargebacks and PayPal disputes, and if they do, PayPal gets the money back and will usually return it to the seller within 90 business days (a holding period to ensure no further disputes are filed).

 

Take advantage of PayPal’s community activities. PayPal offers programs to help sellers learn how to run a successful online store. Each week there is a live chat where PayPal program experts answer questions. The PayPal community can also be a great resource for ideas, support, and valuable information

Why settle a PayPal dispute?

It is almost always in the merchant’s best interest to do everything possible to prevent and minimize disputes and chargebacks. Chargebacks are always more expensive than reversing and refunding the transaction yourself because of the additional fees.

 

Sellers who show they are vulnerable to chargeback fraud often find themselves falling victim again and again until they take steps to prevent it from happening – or go out of business. With careful recordkeeping, attentive customer service, and familiar PayPal navigation, merchants can avoid many pitfalls that lead to claims, chargebacks, and lost of revenue.

Also, note that PayPal is primarily used for online cardless (CNP) transactions. CNP transactions are the most common type of transaction that is potentially fraudulent, whether genuine or friendly.

 

If you’re experiencing a chargeback from PayPal, it’s likely that the cardholder is trying to get some goods or services for free and is using the chargeback process to do so.

Businesses that process e-commerce and other cardless transactions, including the more than 17 million who use PayPal for payments, are quickly learning the risks and realities of chargebacks.

 

Frequently Asked Question

Are PayPal Chargebacks Illegal?

It is illegal to file a chargeback to fund a PayPal purchase if the cardholder lied or misrepresented the situation to receive the chargeback. However, PayPal may respond by closing the account.

 

Has a seller ever won a PayPal dispute?

Sellers can win PayPal disputes, but only if they provide proper evidence that proves the customer’s claim is false.

What happens if you lose a PayPal dispute?

If you lose a PayPal dispute, you lose the price of the product or service, as well as fees and overhead. If you have PayPal Seller Protection, PayPal covers product loss.

Also Read How does paypal work in Nigeria

Conclusion

Am confident that by the time you are done going through this article, you would have known what PayPal dispute means and how to resolve a PayPal dispute!

If you have any suggestions, questions or probably found this article helpful do let us know in the comment box.

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