What are disputes and how to manage them

Resolving disputes quickly can prevent them from turning into a claim. Read on to learn what are disputes filed with PayPal, situations in which they may occur, and how to respond to them when they arise.

Dispute filed with PayPal is an opportunity for both sellers and buyers to resolve an issue before it escalates to a claim. It allows time for both parties to work together to find a solution and for the seller, it is also a chance to utilise great customer service to solve the issue amicably. Hence, to help you approach disputes better, it is important to understand what they are, why they happen, and the best way to respond to them, depending on the type of issue.

What is a dispute?

A dispute happens when a buyer has an issue with a transaction and files a complaint through PayPal. It is also the inquiry phase of a claim, where the buyer may bring the issue to the seller’s attention by opening a dispute in the Resolution Centre on your PayPal account. At this point, PayPal is not involved in the process.

However, if the dispute cannot be resolved, either the buyer or seller can escalate the dispute to a claim. Once escalated, PayPal will step in to determine the outcome.

Why is a dispute being filed against me?

Disputes can occur due to reasons such as:

• Item Not Received: A buyer has paid for an item, but claims they did not receive the goods.

• Significantly Not as Described: A buyer has received the item, but it does not match the seller’s description as it looks considerably different, or it was damaged when it was shipped to them.

• Billing Error: A buyer has an issue with how the transaction was processed or carried out. For example, they were charged the incorrect amount or the payment was charged twice.

How do I respond to a dispute?

Here’s a step-by-step guide on how to respond to a dispute:

Step 1: Get notification and login

We’ll notify you via email that you’ve received a dispute and temporarily hold the transaction funds. Next, you can log in to your PayPal account and click on Open Cases in the Resolution Centre.

Step 2: Find your case

Click on the Response Required tab to review.

Step 3: Respond

Respond quickly or as soon as possible to your buyer before they escalate it to a claim. Do provide an explanation of what happened and suggestions on how to resolve it.

Tips on responding to disputes based on issue

Item Not Received

• Do share relevant information explaining how you delivered the item or service.
• If you haven’t shipped the order, explain why and offer a refund if necessary.
• If you shipped the order, share the shipping receipt or online tracking order with your buyer, along with the expected delivery times.
• For intangible goods, do keep records of the delivery such as proof of download or email receipts.

Significantly Not as Described

• Do inform your buyer that the item or service provided is in line with the item or service promised to the buyer before payment.
• Respond with how you had accurately described the product or service and include relevant details.
• Consider offering partial refunds or implementing a return or exchange policy, if applicable.

You can find more information on how to provide the right documents for your case here.

How fast should I respond to a dispute?

To prevent a dispute from turning into a claim, it is best to respond to the dispute with your buyer as soon as possible. If you don’t respond quickly, buyers tend to escalate their dispute to a claim approximately after 4 days.

Note: A dispute can be escalated into a claim within 20 days* from when the dispute is filed with PayPal.

If you’re unable to come to a resolution within 20 days, you or the buyer can escalate the dispute to a claim and allow PayPal to investigate the case. Meanwhile, if the dispute isn’t escalated within 20 days, the case will be automatically closed on the 21st day and the withheld payment will be released to you. After a dispute is closed, it cannot be reopened or investigated. For more information on how to respond to a PayPal dispute, you may learn more on our Help Centre.

How can I prevent a dispute?

To prevent disputes from happening in the first place, good communication is key and you may start by taking these proactive steps:

• Provide detailed, accurate descriptions of the item and include clear pictures from multiple angles.
• Ship items promptly and provide tracking information promptly.
• Post customer service contact information including working hours, response time frames, as well as a toll-free phone number and email address.
• Offer a refund and post a clear refund or exchange policy.
• Be professional, helpful, and courteous if a buyer contacts you.
• Use the Customer Service Message to provide contact details or to notify buyers about shipping delays. If buyers are able to get in touch with you about a problem with their purchase, they’ll be less likely to file a dispute or claim.