Chargebacks or filing a dispute for online payments is common on PayPal due to fraudulent transactions like unreceived or damaged items or other unauthorized transactions. If you experience any of these, then this page on chargebacks on PayPal would be useful for you. But before we discuss any further about chargebacks, don’t forget to check out more articles on Brighter Guide.
In this post, we’ll explore:
What is a chargeback?
Chargebacks are refunds and undergo a process outside of PayPal wherein buyers file disputes on a credit card issuer or banks for any disputable payment and not on the PayPal platform. And since chargebacks are outside of PayPal and the decision is solely on the credit card issuer’s side, most of PayPal’s policies won’t apply. Chargebacks are generally designed not only for buyers but for seller protection.
With the chargeback request or refunds filed on the card issuer or bank, PayPal Seller Protection cannot interfere. But this does not mean that there won’t be any due process involved. There will still be some investigation, but the decision on chargebacks is not entirely from PayPal anymore.
How does a chargeback work?
A chargeback process works in a straightforward and simple manner. First, buyers contact the credit card provider either by phone or by email. Depending on different credit card provider’s protocols, the cardholder will basically claim a dispute on transactions. The reasons for dispute could be as follows:
- The items received by buyers are damaged.
- The items received by buyers are defective or show signs of factory defect.
- There were multiple credit card charges for a single item.
- A credit card charge is not recognized.
- Unauthorized transactions.
Remember that PayPal does not initiate chargebacks or refunds. This is done on the credit card issuer’s side and, therefore, was initiated by buyers through the bank or card issuer.
How to chargeback on PayPal?
Requesting for chargebacks is not the same as filing a dispute with PayPal. Since the chargeback process will be on a third-party domain (the credit or debit card issuer) the process will be based on the providers’ terms.
Time needed: 2 days.
Here is how it chargeback works on PayPal
- Call providers
Since every credit card company has its own protocol and process in dealing with chargebacks, it would be best to call and ask providers about the step-by-step guide.
- Prepare documents
Prepare all the documents you may have pertaining to or related to the wrong item or defective item that you want to do the chargeback. Such documents include proof of delivery, proof of payment, or proof of shipment.
- Prove lack of knowledge of incident
If the issue is about an unauthorized transaction, you will need to prove that you have no knowledge of the event.
- Wait for PayPal notification
Once the credit card company files the request for a chargeback, wait for them to notify PayPal for the chargeback request.
When PayPal receives and acknowledges the request, they would send the money back to the credit card company.
PayPal will then hold the seller’s account for the amount of money involved. They will also request supporting information and documents to prove that the dispute is valid.
This means that the seller will have a chance to prove that the transaction was valid, and PayPal will then send a chargeback notice to the credit card company to get the money back. This scenario should be expected as this happens most of the time. You will also be informed if there’s a chargeback fee.
- Provide added documents
In this part, you will also get a request to provide your own supporting documents to prove your claim about the transaction or the item.
- Keep funds or send back
If your chargeback complaint has more validity in it and the credit card company sides with your reasons, you get to keep the funds. If not, you will lose the case, and the product stays with you.
As you have realized by now, requesting chargebacks is not enough. You will also have to have all the supporting documents and information to support your claim. If you lack one vital proof about your claim, you will eventually lose your case. And ultimately, you will lose that amount of money.
Be always careful when dealing with online sellers. Always make it a point to check for buyer comments and reviews and buyer complaint rates if the information is available. If it is not, try to find another seller with a much reputable name to transact with.
This will lessen the risks of online frauds and scams. Protect yourself, your money, and funds by dealing only with trusted merchants if you can help it. If not, make sure to transact only with proper documents to assure that you are dealing with a legit entity.
Customers or buyers have every right to complain if they receive faulty items. So long as you have evidence for dispute, don’t hesitate to file for chargeback claims. The bank reversals that come with chargebacks from customer claims may be tedious, but it’s necessary for sellers and merchants to maintain their reputation should there be mishaps in their items and to appease unsatisfied customers. Besides, post customer service is vital for any company. Meanwhile, if you’re a seller, you need not worry since chargebacks also consider the seller protection policy, hence the long process. Many sellers factor this cost into their business risk model.
Seller Protection PayPal also offers sellers protection from fraudulent buyers through the Seller Protection feature. Always keep any correspondence between you and the seller for proof like sale transaction or payment status. Sometimes you might receive a broken item or a faulty item when they ship items leading to buyer scams.
Many merchants also face PayPal chargeback scams with countless transactions made day-to-day. Note everything regarding overpayment transactions so that you can prove your case to PayPal if things get bad.
For further questions about chargeback claim or Buyer claims, credit card theft, false credit card, joint credit card, chargeback costs, chargeback funds, chargeback protection, chargeback time limit, merchandise chargeback, fraud transaction, online transactions, refunds for transactions, unauthorised transactions, unauthorised chargeback, transaction receipt, Seller Protection PayPal, refund guarantee, Refund payments, chargeback scams, gift chargeback, online purchases or other queries, you may leave comments here or reach out directly to PayPal.