What is a chargeback?

What is a chargeback?

A chargeback occurs when a buyer asks their card issuer to reverse a transaction that has already cleared. Although a chargeback may seem to be similar to a PayPal claim, it is actually a process initiated between the buyer and their card issuer. The card issuer ultimately decides whether the buyer’s claim is valid.

Why must I respond so quickly?

The timeframes for responding to chargebacks are determined by the buyer’s card issuer. The card issuer asks PayPal to respond with information about the transaction within a specific timeframe and we ask that you give the information in time for us to meet this deadline.

When is my transaction covered by the seller protection policy?

Your transaction is covered by the seller protection policy when you follow these guidelines:

• Sell using a Verified Business or Premier account
• Provide timely shipment to the buyer’s address on the Transaction Details page
• Retain reasonable proof of delivery that can be tracked
• Ship tangible goods

When you follow these guidelines, you will not be held liable for unauthorized or non-receipt chargebacks. We use the information you give when you respond to a chargeback to decide whether your transaction is eligible for coverage under the seller protection policy.

More information can be found in the User Agreement.

What happens to my funds when I receive a chargeback?

In the event of a chargeback, the funds associated with the transaction are generally held temporarily until the card issuer makes its decision.

Who makes the decision in a chargeback case?

The buyer’s card issuer ultimately decides if the buyer’s chargeback is valid. One of the benefits of using PayPal, though, is that we have a team of chargeback specialists dedicated to helping you put together the strongest possible case to dispute unwarranted chargebacks.

What is a chargeback settlement fee?

Often, a card issuer will charge PayPal a fee to handle chargebacks. When a card issuer decides a chargeback in your favor, this fee is waived. When a chargeback is decided in the buyer’s favor, though, this fee is assessed.

What role does PayPal play in disputing a chargeback?

PayPal’s role in disputing a chargeback is to help you put together the information requested by the buyer’s card issuer. We have a full-time team of chargeback experts whose sole responsibility is to help sellers respond to card issuers with the most persuasive information.