How to Chargeback on PayPal Explained

I’ve dealt with bad transactions on PayPal and want to help you fight unfair sellers. That’s why I wrote this guide, which will help you file a dispute, claim, and/or chargeback.

Let’s dive in.

Key Takeaways

• You have 180 days after a transaction to file a dispute or a claim.
• You have varying amounts of time to file chargebacks with your card network or bank.
• Claims and disputes happen on PayPal, while chargebacks happen outside of it.
• Use chargebacks as a last resort; claims and disputes are faster and easier to deal with.
• Claims, disputes, and chargebacks are free to process and won’t affect your credit score.

Important Information

How to Successfully Chargeback a Transaction on PayPal

• How Long You Have to Open a Dispute: some text
  • Item Not Received transactions: 180 days after you paid for the order.
  • Significantly Not as Described transactions: Whichever of the following is sooner:some text
    • Within 30 days of the delivery date.
    • Within 180 days of paying for your order.

Chargebacks happen separately from PayPal and require you to go to your bank or credit card network. You’d deal with disputes or claims processes with PayPal.

I recommend dealing with everything on PayPal because it’s typically quicker. Moreover, PayPal typically favors buyers if they can provide sufficient evidence.

I’ll cover how to do all 3 processes. And how to appeal a claim situation that didn’t result in your favor.

How to Dispute a Transaction

• Dispute Process Length: 20 days

1. Log in to your PayPal account.

2. Go to the Resolution Center. This is typically found under the Help tab.

3. Click on Report a problem.

4. Select the transaction you want to dispute.

5. Click Continue.

6. Choose the appropriate dispute category:

• Item Not Received: If you haven't received your item, or the tracking information shows it as not delivered.
• Significantly Not as Described: If the item received is materially different from what was advertised or agreed upon (e.g., wrong size, color, model).
• Unauthorized Transaction: If you suspect someone else made a payment from your account without your permission.
• Other Problem: If you have a different issue that’s not covered by the other categories.

7. Follow the on-screen instructions to provide details about the dispute, such as what the problem is and what resolution you are seeking.

Gather proficient evidence to support your case. This includes photos, emails, and other documentation.

Moreover, write any response professionally. I understand that it’s frustrating, but PayPal will likely use your conversation logs during a claim as evidence.

And if they see you swearing at the seller, that may sway PayPal’s decision toward the business.

8. Submit the dispute.

9. You and the seller will need to come up with a solution.

You and the merchant will have 20 days to resolve the dispute. Otherwise, PayPal will automatically close the case and not allow either party to reopen it.

If you aren’t satisfied with the seller’s response, and believe you have evidence that could prove you’re in the right, escalate the dispute to a claim. This process will get PayPal involved.

Escalating a Dispute to a Claim

• How Long Claims Usually Last: 30 days
• Time to Escalate to a Claim: Must file 7 days after the transaction date.

If you can't resolve a dispute directly with the seller within the initial timeframe (usually 20 days), you’ll have the option to escalate it to a claim.

If your transaction falls under the “Unauthorized Transaction” category, also known as fraud, you can skip the dispute process and file a claim immediately.

A claims process is when PayPal will step in to investigate and decide the outcome based on the evidence provided.

Here's how:

1. Log into PayPal and navigate the Resolution Center.
2. Find the specific dispute you want to escalate. It should be listed under Open Disputes.
3. Click View next to the dispute to see the details.
4. Escalate to Claim:some text
   1. If the option is available, click on the button or link that says Escalate to PayPal Claim or Escalate Issue. This is usually found at the bottom of the page.
   2. You might not see the option to escalate immediately. PayPal often requires at least 7 days to have passed since the payment date before allowing escalation.
5. PayPal might ask for more details about the dispute or supporting evidence. Be sure to include any relevant communication with the seller, photos, tracking information, or other documents.
6. Review your information and click Submit to escalate the dispute to a claim.

This video also describes everything mentioned:

From there, PayPal will notify you and the seller that the dispute has been escalated. They will investigate the case and may request further information from either party.

They’ll make a decision based on the evidence presented. The outcome could be in your favor (full or partial refund), in the seller's favor (no refund), or in a compromise.

Is that it? Nope.

Appealing a Claim Decision

Whether PayPal sides with you or the merchant, either party can appeal the platform’s decision within 10 days of the case closing. They’ll allow either party to present new evidence that could support your claim.

If PayPal favors the merchant and you have new evidence, here’s how to appeal the case:

1. Log into your PayPal account and navigate to the Resolution Center.
2. Select Closed Cases from the dropdown menu and locate the claim you wish to appeal.
3. If eligible, you'll see an Appeal button or link next to the case. Click on it.
4. Explain why you're appealing and submit any new evidence that supports your case. This could include:some text
   1. Additional documentation: Receipts, emails, invoices, or contracts.
   2. Communication records: Chats or emails with the seller that provide more context.
   3. Expert opinions: Reports from professionals relevant to your dispute.
5. Review your submission and click Submit to send your appeal to PayPal.

From there, PayPal will review the additional evidence and make a decision. The results of the decision are the same as when filing a claim. However, this result is final and PayPal won’t reopen it.

PayPal will only consider your appeal if you have new compelling evidence that wasn't previously submitted. Restating your previous arguments won't be sufficient.

If you believe that PayPal wasn’t fair with their claims and appeals processes, you can initiate a chargeback (aka dispute) with your bank or credit card company.

How to Do a Chargeback (It’s Not Through PayPal)

• How Long Chargebacks Typically Take: Up to 120 days
• Time to File a Chargeback:some text
  • Visa: 120 days
  • Discover: 120 days
  • American Express: 120 days
  • Mastercard: 90 – 120 days

If you're unable to resolve a dispute with a merchant through PayPal or other channels, filing a chargeback with your bank or card network can be another option to get your money back.

Here's how to do it:

1. Gather Your Documentation: Collect all relevant information related to the transaction, such as:

• Transaction date and amount
• Merchant name and contact information
• Any communication with the merchant (emails, chats, etc.)
• Receipts, invoices, or order confirmations
• Proof of delivery or tracking information (if applicable)

2. Contact Your Bank or Card Issuer: Reach out to your bank's customer service or the card issuer (Visa, Mastercard, American Express, etc.). You can usually find their contact information on the back of your card or on your bank statement.

3. Explain Your Reason for Dispute: Clearly explain why you're disputing the charge. Common reasons include:

• Goods or services not received
• Goods or services not as described
• Fraudulent charges
• Duplicate billing
• Billing errors

4. Follow Instructions and Provide Evidence: Your bank or card issuer will guide you through the process and may ask you to fill out a dispute form. Be prepared to provide the documentation you gathered.

5. Wait for the Investigation: The bank or card issuer will investigate your claim, which typically takes several weeks. They may contact the merchant to find out their side of the story.

6. Receive the Decision: Once the investigation is complete, the issuer will tell you the decision. If your chargeback is successful, the disputed amount will be credited back to your account.

If it's unsuccessful, you can try appealing the decision or initiating a second chargeback.

Some card providers, such as American Express, may have an inquiry process that involves contacting the merchant for additional information before initiating a chargeback. 

This can extend the duration of the overall process, but it aims to resolve the issue more quickly.

What Happens if a Seller Doesn’t Respond to a PayPal Dispute?

If the seller doesn’t respond to the buyer’s dispute, the customer will have a chance to escalate the situation to a claim.

If the merchant doesn’t reply within 10 days of initiating the claim, PayPal will automatically close the case in the shopper’s favor [1].

This result means that PayPal will withdraw money from the business’s account and refund the customer in full.

Doing a Chargeback if You’re Scammed

If a merchant is unresponsive, you believe that you’ve been scammed, and PayPal will not help. A chargeback could help you recover your lost funds. However, this isn’t guaranteed.

If this is the situation, ensure you file a complaint with the appropriate authorities (local police, consumer protection agencies, online fraud reporting platforms) to help prevent others from falling victim.

You could also use such a complaint as evidence during a chargeback.

You Should Know What PayPal Buyer Protection Is

• Cost for Buyer Protection: $0
• Coverage: Up to $20,000

PayPal Buyer Protection reimburses the full price of an item, including shipping costs, in some scenarios.

Here are situations where Buyer Protection will be applicable:

• Item Not Received (INR): If you've paid for an item but haven't received it, or the tracking information confirms it wasn't delivered.
• Significantly Not as Described (SNAD): If the item you receive is different from what the seller described in the listing.

Here are examples of transactions NOT covered by Buyer Protection:

• Items purchased in person: Buyer Protection only applies to online purchases.‍
• Real estate, vehicles, or businesses: These have different legal considerations.‍
• Custom-made items: There's more room for disagreement about whether the item meets expectations.‍
• Intangible items or services: This includes digital goods and event tickets.‍
• Items prohibited by PayPal's Acceptable Use Policy: Weapons, illegal drugs, etc.

You’ll need to read our guide on PayPal’s Purchase Protection to see more examples.

Buyer Protection will automatically apply to your account. So long as you open a dispute within 180 days of paying for your order, and you go through the dispute process then escalate to a dispute.

This isn’t a substitute for caution. Always research sellers and products before buying, and read the terms and conditions of the sale.

Summary: PayPal Buyer Protection almost guarantees a refund in certain scenarios.

Chargeback vs. Refund: They Aren’t the Same

When to Use Each:

• Refunds: Best for amicable resolutions where the seller is willing to cooperate.
• Chargebacks: Necessary when the seller is unresponsive, uncooperative, or fraudulent.

While chargebacks and refunds result in the customer getting their money back, they are different processes.

Let’s expand further:

Refunds:

• The seller voluntarily returns the purchase price to the customer.
• Refunds are typically processed quickly, often within a few days, as they don't involve a third-party investigation.
• Refunds typically involve returning the purchase price, with no additional fees or penalties.
• A smooth refund process can enhance customer satisfaction and loyalty.

Chargebacks:

• The buyer disputes a charge with their bank or card issuer, who then initiates an investigation.
• Chargebacks involve a formal dispute process, which can take several weeks or even months to resolve.

Use chargebacks as a last resort after attempting to resolve the issue with the seller. They are a valuable consumer protection tool when other avenues have failed.

FAQs

Will PayPal Refund Money if I Get Hacked?

PayPal will not refund money in most cases if you’re hacked. If you can prove the transaction wasn't authorized you could get a refund from the merchant.

Can You Chargeback PayPal Friends & Family?

It’s not possible to file a chargeback when dealing with money sent to Friends and Family. As this is a peer-to-peer payment method.

What Happens if You Lose a Chargeback?

Nothing happens to customers if they lose a chargeback.

Wrapping Up

PayPal offers the disputes and claims processes to deal with unfair transactions. However, if PayPal is unfair, then use a chargeback as a last resort.

You should learn more about what chargebacks are and how they work before starting one. Read this guide to learn more.

Source

• [1] PayPal: How claims work