PayPal Chargeback Time Limits Guide

As someone who has used PayPal as a payment processor, I’ve had to prepare myself for the eventual dispute, claim, or chargeback. Thus, I familiarized myself with PayPal’s dispute, claim, and chargeback time limits.

I wrote this guide to simplify the information that I researched to prevent you from getting burned from a nasty chargeback.

Dive in to learn more.

Key Takeaways

• Customers have 120 days to file chargebacks; actual times will vary by the card network.
• Merchants have 20 days to respond to chargeback disputes.
• On PayPal, buyers must wait 7 days after the disputed transaction’s payment to file a dispute; however, they must file it within 180 days.
• Sellers and shoppers have 20 days to escalate a dispute (on PayPal) to a claim.
• Vendors can appeal the result of a claims dispute within 10 days of the decision.

Here Are What the Time Limits Are for PayPal Chargebacks & Disputes

• Resolve a Dispute or Escalate to a Claim (Both parties): 20 days.
• Appeal a Claim (Merchant): 10 days after the claim is closed.

You should know the differences among all the different processes before reading on.

First off, there are the processes that happen within PayPal:

• Dispute: Initial buyer-seller disagreement, resolved by direct communication or platform mediation.
• Claim: Escalation of unresolved dispute, platform investigates and decides based on evidence.

Before, during, or after any of the above processes, the customer can contact their bank and initiate a chargeback (aka dispute).

This is a different process that results in the forced reversal of funds from the merchant, in addition to fines and other consequences.

This process does involve PayPal, but only as your go-to when communicating with the customer’s bank.

Let’s expand upon the listed points above.

After 20 days, if no resolution occurs, PayPal closes the dispute [1].

However, PayPal can reopen disputes for “several reasons” (as they said).

One reason they could reopen a dispute is if the customer files a chargeback through their bank. Otherwise, they didn’t specify particular scenarios.

If your dispute escalates to a claim, PayPal typically decides who the “winner” is within 14 days. In complex cases, it could take 30 or more days.

If the merchant disagrees with PayPal's decision, they can appeal within 10 days before PayPal closes the claim.

This process gives the vendor a chance to submit more evidence.

Chargebacks don’t happen on PayPal and have varying time requirements.

You’ll find the different time limits for chargebacks throughout these guides:

• Visa
• Mastercard
• American Express
• Discover

The time to submit a chargeback, respond to a dispute, etc., will depend on the customer’s card provider.

Timeframes for Merchants

• Respond to Pre-Chargeback Alerts: 20 hours (recommended); otherwise, 10 days.
• Respond to a Dispute: 10 days
• Respond to a Chargeback:some text
  • Discover: 5 dayssome text
    • Retrieval requests: 20 days
  • American Express: 20 days for inquiries and chargebacks
  • Mastercard: 45 dayssome text
    • Second chargeback: 30 days
  • Visa: 20 days

Responding to a dispute means responding to the customer in the Dispute Resolution Center. Though you have 10 days to respond, I recommend responding ASAP.

Keeping the customer waiting will encourage them to go to their bank and initiate a chargeback instead. Because 81% of customers believe that initiating a chargeback is easier than dealing with a refund [2].

You don’t want them to initiate the chargeback. An opportunity to deal with the dispute early is a blessing in disguise.

Yes, you might have to refund the transaction. But you avoid chargeback fees and contributing to chargeback rate thresholds.

Chargebacks will cost you a lot more than dealing with a refund. Some sources suggest that $100 in chargebacks actually costs $240 [3].

The expense includes chargeback fees, arbitration fees, and staffing for handling chargebacks.

If you encounter a chargeback, refer to the different timeframes I listed. They’ll vary by card network. You should look into each guide for more details on their time frames.

Let’s talk about pre-chargeback alerts.

They’re notifications sent to merchants, warning them about transactions likely to result in a chargeback. This gives sellers time to address the issue by issuing a refund or providing evidence to dispute the potential chargeback.

Again, if you’re a seller, use this alert as an opportunity to prevent a chargeback.

For Buyers

Since disputes (on PayPal) differ from chargebacks outside the platform, we’ll need to examine the time limits in separate sections.

Let’s first see the limits for disputes.

1. Dispute Time Limit.

• File a Dispute:some text
  • Item Not Received Transactions: 180 days after you paid for the order.
  • 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.

While customers have 180 days (or 6 months) to file a dispute, they must wait at least 7 days from the payment date to do so. Otherwise, PayPal might not allow the dispute to go through.

PayPal typically does not allow exceptions for transactions older than 2 years. Some card networks; however, allow chargebacks up to 5 years due to fraud.

Not all customers will realize immediately that a fraudulent transaction happened. Thus, they’ll need to file a dispute later. PayPal isn’t so accommodating in that area.

If you’re a customer dealing with a fraudulent transaction from fraud that happened years ago, you’ll need to contact your card network.

2. Chargeback Time Limits.

• File a Chargeback:some text
  • Visa: 120 days
  • Discover: 120 days
  • American Express: 120 days
  • Mastercard: 90 – 120 days

The number of days you’ll have to file a chargeback will vary by card network, since again, this process happens outside of PayPal.

You Might Also Wonder How Long Chargebacks Last

As of 2024, here’s how long the chargeback process may last with different card networks:

• Mastercard: Up to 120 days (17 weeks).
• Visa: Prefers to have disputes dealt with in less than a month.
• Discover: “Several weeks or months.”
• American Express (AMEX): 6 – 8 weeks.

PayPal estimates the chargeback process will take more than 75 days.

However…

The true duration of the chargeback process will depend on the case's complexity.

Situations dealing with fraud cases will take much longer since they may involve law enforcement. Whereas, cases of merchant error could take a week or 2.

Here’s Why Knowing Time Limits Are Critical to Win Disputes & Chargebacks

For PayPal disputes and claims, adhering to time limits is crucial to protect both parties' interests. 

Merchants must meet time limits to avoid automatic rulings benefiting buyers. This prevents revenue loss.

Buyers must escalate disputes promptly for fair resolution and PayPal's involvement.

Chargeback time limits are also vital.

Customers must file chargebacks within the timeframe set by their card issuer (around 120 days) to be eligible for a reversal.

Sellers get 10 days after a chargeback notification to submit evidence and avoid revenue loss.

Otherwise, the bank or card network managing the chargeback process will favor the customer. Eliminating any chance the merchant had of winning.

Summary: PayPal disputes have time limits. Merchants and buyers must act fast to avoid losing money or items.

Finishing Up

Buyers and sellers often mix up PayPal disputes and chargebacks. This guide should have clarified action time frames.

If you’re a merchant, responding to disputes isn’t enough to prevent chargebacks. You’ll need additional alerts to help you prevent disputes from escalating to chargebacks. Learn how our alerts can help.

Sources

• [1] PayPal: Time to resolve dispute
• [2] Lithic: Chargeback management guide
• [3] Chargebacks: True cost of chargebacks