Tom-Chris Emewulu
Chief Disputes Analyst
Shopify PayPal Disputes are not uncommon as PayPal is one of Shopify’s regular payment gateways.

Immediately after you open a store, Shopify will give you a PayPal Express Checkout account. And as we explained in this article, when a cardholder has an issue with a deduction on their credit card, they can ask their bank to reverse the charge. The bank will proceed to make a chargeback or inquiry.

In the case the cardholder’s bank made a chargeback, the bank will deduct the amount under dispute and a chargeback fee from your wallet. Depending on the compelling evidence you present to the customer’s credit card company, they can resolve the issue to your advantage, in which case you win the PayPal Dispute, and Shopify will refund the chargeback fee. But when the result of the dispute favors the cardholder, the disputed amount goes to the cardholder.

But if the cardholder’s bank sends an inquiry, you have some grace period to resolve the Shopify PayPal Dispute with your customer. In the remaining parts of this article, we shall endeavor to excavate useful insights that can help you manage your chargeback mediation efforts excellently.

What causes Shopify PayPal Disputes?

According to the famed author and speaker Simon Sinek, it’s always wise to start with why. Before taking a deep dive into best practices for winning PayPal Disputes on Shopify, let’s look at the root causes of Shopify PayPal Disputes.

Shopify has broken down the labyrinth of the reasons codes that cardholders give for PayPal Disputes into eight distinct categories. In this portion of the article, we shall evaluate these Shopify PayPal Disputes reason codes one after the other.

Shopify PayPal Disputes Reason Code #1: Fraudulent Transaction

A Fraudulent transaction chargeback happens if the cardholder did not authorize the charge. Fraudulent chargebacks are at the top of all Shopify PayPal Disputes list and often occurs if the card was stolen. According to research, real fraud accounts for only 29% of total fraud losses for e-commerce. A bulky 71% of digital commerce losses result from chargeback fraud and friendly fraud.

Shopify PayPal Disputes Reason Code #2: Transaction Unrecognized

An Unrecognized Transaction chargeback means the cardholder does not recognize the vendor’s name, location on the credit card statement, etc. You can minimize this with a concrete merchant descriptor. Equally important, get authorization from the cardholder, and use AVS and CVV.

Shopify PayPal Disputes Reason Code #3: Duplicate Charge

Shopify marks the chargeback as Duplicate if the cardholder believes the merchant charged them twice for the same product or service. This chargeback can result from a simple human error of the merchant failing to void multiple transactions. It could also be that the merchant tried to process multiple transactions fraudulently, or the consumer authorized the transactions but later retracted them.

Shopify PayPal Disputes Reason Code #4: Canceled Subscription

A Canceled Subscription chargeback happens if the cardholder believes the merchant charged for a subscription after she canceled the subscription. It can equally mean that the client expected the merchant to send a reminder before a recurring charge, but they did not receive any notification. A well-crafted subscription cancellation policy can save you lots of headaches here.

Shopify PayPal Disputes Reason Code #5: Product Not Received

A Product Not Received chargeback means the customer believes they did not receive the goods or services they purchased. Vendors that do not have a well-drafted shipping and order fulfillment policy are susceptible to this category of Shopify chargebacks.

Shopify PayPal Disputes Reason Code #6: Product Unacceptable

Shopify classifies the chargeback as Product Unacceptable if the cardholder feels they received the product alright, but it was defective, damaged, counterfeit, or not described by the vendor. This chargeback often results from poor product descriptions or strict return policies. You must ensure that your product descriptions are well-crafted and accurately describe the product sold.

Shopify PayPal Disputes Reason Code #7: Credit Not Processed

If the customer informed the merchant that they returned the product they purchased or canceled the transaction with you and the merchant has not yet refunded or credited the customer, Shopify will mark the chargeback as Credit Not Processed.

Shopify PayPal Disputes Reason Code #8: General

When the chargeback reason code does not fall into any of the preceding categories, Shopify will mark it as General.

How to win PayPal Disputes on Shopify

Now that you’ve understood the various reasons why customers file Shopify PayPal Disputes, let’s look at proven tips on how to win Shopify PayPal disputes without breaking much sweat.

Deal with Fraudulent Transaction Shopify PayPal Dispute

The first course of action in handling a Fraudulent charge dispute is to try contacting the cardholder. In some instances, the cardholder may have forgotten about the transaction or the purchase was made by a relative. If, upon initiating contact, you managed to find a middle ground and the client accepts the charge was legitimate, tell them to ask their bank to drop the chargeback. However, you must send the evidence of your agreement with the cardholder to the credit card company.

But if you cannot reach a consensus with the cardholder or think their claim is untrue, the following are crucial pieces of evidence you can submit to the credit card company to fight the Shopify PayPal dispute.

  1. The date and time that you fulfilled the order
  2. The billing information the customer used
  3. The IP address and country the customer used to place the order
  4. Shipping and tracking information for the order
  5. If a member of the cardholder’s family authorized the transaction, show a connection between the order recipient and the cardholder.
  6. Add the IP address, email address, physical address, or telephone number they used in a prior transaction they did not dispute.

Always evaluate your orders before satisfying them; try to capture payments manually. This helps you see a comprehensive fraud analysis and determine potential high-risk orders, thereby avoiding potential chargebacks. Meeting high-risk orders can lead to more Shopify PayPal disputes. When you get a high volume of disputes, Shopify will discontinue your payment processing and could bar you from transacting.

Deal with Transaction Unrecognized Shopify PayPal Dispute

As in Fraudulent chargeback, you should try to contact the client to handle an Unrecognized chargeback claim. Again, the cardholder may have forgotten about the transaction. Or the purchase was made by a relative, and the cardholder does not want to pay the bill. As stated above, if upon initiating contact, you can reach a consensus, and the client accepts the charge was legitimate, tell them to ask their bank to drop the chargeback. Remember also to send the evidence of your agreement with the cardholder to the credit card company.

But if you cannot find common ground with the cardholder or think they are not telling the truth, you should submit the following evidence to the credit card company to fight the dispute.

  1. The date and time that you fulfilled the order
  2. The billing information the customer used
  3. The IP address and country the customer used to place the order
  4. Shipping and tracking information for the disputed transaction

Deal with Duplicate Charge Shopify PayPal Dispute

To win this category of Shopify chargeback, do your due diligence and determine if you charged the client twice. If you determined that the customer’s claim is valid, then you need to accept the chargeback. But if you found out you didn’t place the charge twice, try to talk to the customer. Show them the transaction details. If the customer accepts the order was legitimate, tell them to contact their bank and drop the chargeback. Below are the documents you must add to your response to the credit card issuing company:

  1. Details of the transaction under dispute and reasons for the two charges, as the case may be
  2. Receipts to show that the two bills were for separate products or services
  3. Any communication with the client where you explained the reasons for the charges

Deal with Canceled Subscription Shopify PayPal Dispute

If you can’t reach an agreement upon contacting the customer or think she didn’t cancel the subscription before the charge under dispute, then you have to show the credit card company some evidence to that effect. Below are vital pieces of evidence to include:

  1. Your subscription cancellation policy
  2. Emails or notifications you sent to the customer about their cancellation.
  3. Details of when and where you showed the customer the cancellation policy
  4. If the product or service in question was digital, add an activity log that indicates the customer gained access to the product or service after they said they canceled their subscription.

Deal with Product Not Received Shopify PayPal Dispute

To win the Product Not Received chargeback, you should have strong evidence to show the customer received the product before filing the dispute. If you reach out to the customer and cannot resolve the problem, the next cause of action should contact the credit card company. Present your strong reasons to show the client received the product or service.

If the customer picked up the product from your physical location, then you should include:

  1. The cardholder’s signature on the pick-up form
  2. A copy of identification presented by the cardholder
  3. The details of identification issued by the cardholder

If you delivered the product to the cardholder’s home or business address, then include:

  1. Shipping and tracking information for the order to show the status of delivery
  2. Proof of delivery date and time
  3. Evidence that you delivered the item to the same billing address provided
  4. Proof that the cardholder was working at the address at the time of delivery

If the product or service was digital, add the IP address, timestamps, Server, or activity logs to show the customer accessed the product or service.

Deal with Product Unacceptable Shopify PayPal Dispute

In instances where the client’s Product Unacceptable claims are untrue, or the customer didn’t try to return the product or cancel the service before they made a chargeback, or you already replaced the order, below are compelling evidence to include:

  1. Your communication with the customer to address the issue
  2. Documentation or pictures of the products from your store showing the products were as described.
  3. Evidence to authenticate the cardholder did not attempt to return the merchandise (if applicable)
  4. If you shipped a physical product, also include the tracking number, complete shipping address information, date of shipment before the dispute date, shipping carrier, and proof the address delivered matched the address provided by the customer.
  5. If you shipped a digital product, add an IP address, timestamps, server, or activity logs to show that the customer accessed the purchased digital goods.

Deal with Credit Not Processed Shopify PayPal Dispute

Suppose you couldn’t resolve the problem after contacting the client, and you think the chargeback is invalid. In that case, you should send some compelling evidence to the credit card issuing company. State whether you refunded the customer before the chargeback or they weren’t entitled to a refund.

Below are compelling evidence to include in your package:

  1. A clear description of your refund and return policies
  2. Well-crafted explanation of when and where you showed the customer the refund policy
  3. Any communication (emails or notifications) with the customer about the refund
  4. A full description of why the customer was not entitled to a refund

Deal with General Shopify PayPal Dispute

If you are fighting any other Shopify PayPal Dispute that does not rank within the above categories, below are some critical evidence you should send to the credit card company:

  • A piece of comprehensive information about the products the customer ordered
  • The date and time the customer placed the order, and when you fulfilled it.
  • The customer’s billing information, IP address, country, emails, and any other form of communication you had with the customer
  • USPS/FedEx/UPS or additional online tracking or shipping confirmations
  • Well-crafted proof of prior refunds or replacement shipments

Automate your Dispute Mitigation and let technology do the work for you

Chargeflow is the world’s first PayPal Dispute and Chargebacks automation system designed to help you recover more money without a hassle. With over $10M regained from disputes, Chargeflow helps the boldest brands worldwide focus on building their brand, serving their customers, and building better products. We are always happy to support e-commerce business owners. Sign up here and join the fastest growing brands in the world.

Average Dispute Amount
Average Dispute Amount
$
30
# Disputes Per Month
# Disputes Per Month
#
50
Time Spent Per Dispute
Time Spent Per Dispute
M
20
calculation
You could recover
$500,000 and save
1,000 hours every month with Chargeflow!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Want to learn how Chargeflow can recover more money for you? Sign up and get a free dispute analysis
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Related Articles

What's Chargeflow?

Try it for free

Full Dispute Automation

No more manual work, Chargeflow fully-automates your dispute process from A to Z.

Simple Integrations

We use the official 1-click API's from our connected partners.

Success-Based

You get charged only when we help settle a dispute in your favor.

ChargeResponse®

No more manual work, Chargeflow fully- automates your dispute process from A to Z.

PayPal Seller Protection

Powered by ChargeSync®, sync your logistics data to your PayPal account automatically, for free.

Actionable Analytics

In-depth disputes statistics at your fingertips.

Built for eCommerce

Made by DTC Entrepreneurs, for DTC Entrepreneurs.

Security

OAuth 2.0, 128 Bit SSL, Secure Data Encryption and Official API's. We got them all, and more.

Get Started with Chargeflow

Chargeflow helps you focus on your business without the burden of disputes, chargebacks and fraud holding you back.

With a fully-featured, automated dispute management solution that offers flexible workflows and unique features such as ChargeScore®, ChargeResponse® and ChargeSync®, along with our 5x ROI guarantee and actionable analytics, all of your dispute needs are met in one simple platform.
Got Disputes or Chargebacks?
We got your back!
Try Chargeflow today - first 10 disputes resolved
in your favor are FREE.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Plus, enjoy all these benefits and more :
5x ROI Guarantee
Automated dispute
managment, no intervention
Industry-leading win-rate