PayPal disputes, you hate it; I hate it, so how do you win a chargeback?

PayPal is a poster child company for online payments.

According to industry stats, PayPal recorded 12.4 billion payment transactions accruing to $712 billion in total payment volume in 2019 alone.

E-commerce merchants prefer to use their service because one can quickly plug PayPal's API into their website, and start collecting card payments without the usual hassle of processing payments.

But the platform is not without its shortcomings. Fraudulent individuals use chargebacks to rip merchants off their earnings. And that is becoming a huge cause for concern.

Aside from the loss of revenue, PayPal charges a service fee of $20 for handling chargebacks. And there can be a bunch of other ancillary fees if the customer’s bank gets involved, or if the client side-steps the PayPal Resolution Center, which handles such issues.

That does not mean every chargeback claim is fraudulent. But as you know, when there’s a loophole, some people use it to get the best of others. You don’t want to be a victim of such an issue, do you?

Here’s how to protect yourself and win PayPal chargebacks.

The first step is to understand what a chargeback is. In simple terms, a chargeback means that a customer wants a refund or payment reversal for a transaction. It is either the buyer is disputing a payment made because it was unauthorized or the product shipped by the seller is unwanted, damaged, or both.

With that in the note, let’s review the nuts and bolts of how you can win the dispute.

  1. Take responsibility - According to experts, 40% of chargeback claims result from merchant error. Talk to the customer and try to hash out any misunderstanding.
  2. Be smart and play by the books - PayPal’s Seller Protection Program helps merchants to handle chargebacks. To quality, the vendor must be “shipping a physical good from a US-based account on-time to the address on the transaction page, with the ability to offer any order documentation requested.” See if your transaction meets these criteria.
  3. Arm yourself with the right tools - A clever way to win a chargeback is to email every documentation on the transaction to PayPal. Extract the tracking details from your dashboard to confirm the eligibility of the sale, and show a signed proof of delivery or shipment with the name of the shipping company on the Transaction Details page.
  4. Be proactive and persistent - PayPal gives a window of 10 days for vendors to respond to chargeback claims. Go to the Resolutions Center and give them the transaction records. Follow up on the status of the claim; it can take 75 days to quash the chargeback claim. And if you lose, you can appeal the decision.
  5. Use the power of data - Chargeflow is the world's first PayPal Dispute and Chargebacks automation system designed to help you recover more money, hassle-free. We leverage AI and Machine Learning to help merchants fight PayPal disputes professionally.

Running a successful e-commerce shop is by no means an easy job. But getting paid and keeping your hard-earned money shouldn’t be an added burden. With these tips, you will be rightly-positioned to deal with any and every PayPal chargeback claims. We wish you the best in your endeavors!

Tom-Chris Emewulu
Chief Disputes Analyst

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