Transaction Issues: How to Handle PayPal Disputes & Claims
PayPal is the payment processing service of choice for many businesses online. It’s easy and affordable to use, it’s secure, and practically everyone is familiar with it.
However, payment issues and conflicts can still arise over PayPal transactions, and these often have to be dealt with within the PayPal ecosystem. The process for resolving PayPal “issues” and other problems is unique and proprietary, and it is important for merchants who use PayPal to know how to navigate this process to protect their revenue.
While PayPal buyers can always dispute a transaction with their bank or credit card issuer, PayPal encourages its users to attempt to resolve problems through the PayPal Resolution Center and many of them do so. Most issues between buyers and sellers in PayPal tend to fall under two categories: disputes and claims.
How to dispute a PayPal transaction?
How to fight a PayPal claim?
To successfully combat PayPal disputes and claims, it is important for merchants to be aware of where the transaction is in the PayPal dispute process, what options they have for resolving it, and what evidence they would need to provide in order to prove to PayPal that the transaction should be upheld.
What is PayPal's Dispute process?
- Once the buyer has filed a dispute, the seller has 20 days to resolve it
- If the dispute is resolved, it’s the buyer’s responsibility to mark it as such within PayPal’s system
- If the buyer is unsatisfied with the seller’s offers to resolve the dispute, they have 20 days to escalate it to a claim
- Once the dispute has been escalated to a claim, PayPal steps in to review the matter
Handling PayPal Claims
What is PayPal's Claims process?
- Physical goods: the seller must provide proof of delivery, confirmation that the shipping address and the delivery address match, and for transactions over $750, signature confirmation. If the seller has already issued a refund, they must provide proof of that as well.
- Digital goods: the seller must provide proof that the product was downloaded or used, along with proof of a refund if one has been issued already.
- Digital services: the seller must provide the service agreement that the buyer signed, outlining the deliverables, and an acknowledgement agreement stating that all the deliverables were completed and received to the buyer’s satisfaction.
- Service providers: for orders under $200, it is recommended that sellers solicit a service acknowledgement receipt from the buyer that they can provide as evidence if a claim is later made. For larger transactions, the seller should ask the buyer for a signed agreement with a list of deliverables before the work begins, and a service acknowledgement receipt after the service has been rendered.
How can I prevent PayPal chargebacks?
Businesses that process e-commerce and other card-not-present transactions—including the over 17 million who use PayPal for payments—are quickly learning about the risks and realities of chargebacks.
This comprehensive guide, A Merchant's Guide to PayPal Chargebacks, will help you effectively handle PayPal disputes, claims and chargebacks in order to protect profits.