Chargeback or filing a dispute for a paid item is a common thing on PayPal. This is due to some popular reasons such as an item not received, damaged, or it is a transaction not authorized to happen. So if one of these things happens to you, this article could be of great help to your situation.

Chargeback on PayPal

What is a chargeback?

A chargeback is a process outside of PayPal wherein the buyer filed the dispute on the card issuer and not on the PayPal platform. And since this is outside of PayPal and the decision is solely on the card issuer’s side, most of PayPal policies won’t apply.

With the chargeback request filed on the card issuer, 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 is not entirely from PayPal anymore.

How does a chargeback work?

Remember that PayPal does not initiate the chargeback. This is done on the card issuer’s side and therefore, was initiated by the buyer through the card issuer.

A chargeback works in a straightforward and simple manner. First, the buyer contacts the card issuer either by phone or by email. Depending on different card issuer’s protocol, the cardholder will basically claim that something unacceptable on his or her end.

The reason could be as follows:

  • The item received is damaged.
  • The item received is defective or shows signs of factory defect.
  • There were multiple charges for a single item.
  • A credit card charge is not recognized.
  • Unauthorized transaction.

How to chargeback on PayPal?

Requesting for a chargeback is not the same as filing a dispute with PayPal. Since the process will be on a third-party domain (the card issuer) the process will be based on the card issuer’s terms. So here is how it should work.

How-To:
  1. Since every credit card company has their own protocol and process in dealing with chargebacks, it would be best to call and ask them about the step-by-step guide.
  2. Prepare all the documents you may have pertaining to or related to the item that you want to do the chargeback.
  3. If the issue is about an unauthorized transaction, you will need to prove that you have no knowledge of the event.
  4. Once the credit card company files the request for a chargeback, wait for them to notify PayPal for the chargeback request.
  5. When PayPal receives and acknowledges the request, they would send the money back to the credit card company.
  6. PayPal will then hold the seller’s account for the amount of money involved. They will also request for supporting information and documents to prove that the dispute is valid.
  7. This means that the seller will have a chance to prove that the transaction was valid and PayPal will then try to communicate with the credit card company to get the money back. This scenario should be expected as this happens most of the time.
  8. 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.
  9. If your claim has more validity in it and the credit card company sides with your reasons, you get to keep the money. If not, you will lose the case, and the product stays with you.

As you have realized by now, requesting for a chargeback 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.

In Conclusion

Be always careful when dealing with online sellers. Always make it a point to check for user reviews and the rating 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. Deal 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.

In your experience, how often do you encounter fraud dealers and merchants in your online activities? And if you can, please do share with us what you did to identify these sellers or at least how did you managed to avoid the scam? Maybe you can also tell us how you are scammed so that readers will also have ideas on how these entities operate.

Feel free to leave us your questions if you have any in the comment section down below. We will be more than happy to answer all your queries provided that it is related to today’s topic or that it could be useful for other people in this community.

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Alex Ocean is a financial adviser and expert on e-commerce and trading stocks. He teaches online financial courses for bloggers and entrepreneurs. Alex also hosts workshops for aspiring young professionals that aim to be successful at an early age.

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