PayPal has a problem – they focus on the buyer or sender. As such, this publication reveals how to prevent chargebacks on PayPal, or even having your account suspended for too many chargebacks.
There is no assurance that you will completely win the sender by convincing PayPal, not to charge back.
However, according to PayPal, 3 common reasons a client will file a chargeback are item not received, item not as described, and unauthorized transaction. An unauthorized transaction could occur if a PayPal account holder reports unauthorized payments.
What is a chargeback?
A chargeback is a protocol for reversing payment to enable the sender or consumer to remediate transaction disputes.
A chargeback is different from payment reversal, where the sender or buyer contacts the seller directly for remediation or when the payment encounters an error.
In the case of PayPal, the sender or buyer will contact PayPal, their bank, or card issuer who are legally authorized to ensure the chargeback.
As the recipient, you now have to go through a process typically known as representment to prove that the transaction is legitimate and does not warrant a chargeback.
This can take as long as 60 days in some cases, and every chargeback attracts fees. PayPal, on the other hand, can suspend your account if you record too many chargebacks.
The best way to keep the PayPal account is to cut down the number of chargebacks, even if you use the account as a bank drop.
How PayPal chargeback works
In this section, you will learn how PayPal chargeback generally works. When the person sending money to your PayPal account disputes the PayPal transaction with their credit card issuer, the card issuer notifies PayPal for a response.
PayPal does the following during the chargeback process:
You will be notified by PayPal’s Resolution Center about the chargeback filed by the person who sent money to your PayPal account. Normally, you find a notification on the online Resolution Center page.
Obtain evidence from you
PayPal will expect you to submit evidence to respond to the chargeback by the sender. The proof you send to PayPal depends on the type of transaction you entered with the client.
If your transaction involved the shipment of an item, you have to upload and submit the required documents proving the shipment and delivery within 10 days from the date you received the chargeback notification.
PayPal submits your evidence
PayPal will submit your evidence on your behalf to the credit card issuer, who reviews it and decides the chargeback.
If the card issuer determines you to be at fault, a chargeback is processed, which reverses the funds in your PayPal. You will also pay a $20 PayPal chargeback fee.
However, if the credit card issuer rules in your favor, no chargeback is initiated, and the sender is also charged for the transaction. PayPal will then credit your account with the funds.
Apparently, PayPal is not directly responsible for the chargeback decision as you can see.
How to prevent chargebacks on PayPal
This section explains how you can prevent chargeback in your PayPal account when dealing with someone or using your account as a drop:
Be quick to respond to the notification
PayPal’s Resolution Center notifies you when there is a chargeback. You have up to 10 days to get back to PayPal. Otherwise, the chargeback will be entered without your knowledge.
Be fast and diligent when submitting your evidence to a PayPal dispute specialist. If you run an online store, you can send proof of your refund policies explaining what the buyer should have expected.
Read also: where to sell credit cards
Add all screenshots of what the buyer saw when paying for the item. If you sold a digital product, you might lose the dispute, especially if the digital product does not belong to you.
Call PayPal and speak with them directly. You can send an email to PayPal. Unfortunately, PayPal’s support is designed to block you from contacting them.
PayPal does not want to talk to you, so they will do anything to redirect you to the help and FAQ sections of the website, which do not resolve the issue, or merely repeats what you already know.
PayPal’s employees handling chargebacks and dispute resolution via phone or email are trained to be incompetent when dealing with you.
Most of the time, they just copy and paste responses. Some of them do not even read the comments in the dispute system before dishing responses.
Send proofs to PayPal
Tell PayPal that you called and texted the customer several times but they would not answer the phone or message back. Prove it by sending screenshots of your call log and the message sent.
A scammer will typically create fake call logs and text messages to outsmart PayPal. PayPal may not even ask you to prove it but you must do it to avoid getting their runaround and generic apologies until the chargeback occurs in favor of the sender.
Send proofs the person received the item
If the sender of the funds received any item from you, send proofs of the product or service delivery or any access that you granted the sender.
Read also: sending fake money is possible on PayPal
If it was a physical delivery, the person’s signature will do as compelling evidence. If it was digital goods or services, send proofs that the person logged in or download the item.
Report to the FTC
You can file a report with the FTC (Federal Trade Commission). If you are being scammed, prepare proofs to send to the Federal Trade Commission about the fraud committed on PayPal.
The FTC may be able to help prevent the chargeback if you provide enough proof.
Some account holders even blame PayPal of refunding transactions to customers asking them to cancel a dispute. This goes to show how centered PayPal can be on the sender of the funds.
As such, you need to know when to cut your losses, take the loss and move on if the buyer or sender wins the dispute.
Although this article is intended to show the public how they can prevent the annoying chargeback on PayPal, some persons can use it illegally. This website is not responsible for how readers use the information. But we urge the good use of this information.