Consumer rights issue? Go legal
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A buyer might make a claim with PayPal if - for example - they believe that an item hasn't been received or the payment from their account is unauthorised.
They could open a dispute with the PayPal Resolution Centre, or they might issue a chargeback in order to get their money back.
If the buyer is making a false claim, sellers using PayPal are protected by PayPal Seller Protection and shouldn't lose out - provided that they've satisfied eligibility requirements.
Our experts will guide you to step by step to achieve the best outcome for you.
Get legal advice£99 for a whole year or £9 per month + a one-off £29 joining fee. (Cancel anytime). Provided by W? Ltd.
For your sale to be eligible for protection from disputes and chargebacks with PayPal:
If a buyer claims for an unauthorised payment, you must have proof of postage to be protected by the PayPal Seller Protection.
This must be documentation from a postage company that must include:
But if you have proof of delivery, you don’t need proof of postage.
This must be documentation from a postage company that must include:
If any of the following apply, unfortunately you won’t qualify for protection if the buyer opens a dispute:
A buyer must open a dispute via the PayPal Resolution Centre within 180 days of making the payment. This is an extension of the 45 days which it was previously. Buyers are encouraged to deal directly with sellers to resolve the dispute.
If a resolution can't be found, the buyer can escalate the complaint - but only within 20 days of opening the dispute. Otherwise, PayPal will close the dispute and the buyer won't be eligible for reimbursement.
During the claims process, PayPal may require documentation to support your position, such as proof of postage and delivery.
Once a dispute is escalated, PayPal will - after surveying the evidence - make a decision in favour of the buyer or seller.
If you've followed all the requirements for your sale to be eligible for PayPal Seller Protection, it's unlikely that you'll lose out.
It’s in your interest to cooperate with PayPal if a buyer raises a dispute or attempts a chargeback.
As you’re dealing directly with the buyer, you should ask them for photos of the product they received.
If it appears the buyer is correct, you should apologise and correct the situation by sending another or giving a refund.
If you think the buyer is wrong, the dispute could be escalated to a claim after 20 days and PayPal will step in and investigate. At this point you will no longer be able to communicate with the buyer directly.
Again, cooperating with PayPal is in your interest and having lots of evidence will help your case.
A buyer may choose to file a chargeback through their bank or card provider.
When this happens, money will be taken from your account while the buyer’s bank or card provider decides if their claim is valid. But you still might be covered by the PayPal Seller Protection.
Like a dispute, you will need to provide evidence to show why the chargeback isn’t valid.
PayPal will hold the funds until the situation is resolved.
Credit card chargeback rights may be broader than PayPal's terms and conditions - for example, they can be filed more than 45 days after payment and may cover intangible items.
If a buyer has opened a claim with PayPal and they then file a chargeback, PayPal will close their claim and the buyer will have to rely on chargeback rights.
Buyers paying via PayPal for items bought on eBay are also protected by eBay's Money Back Guarantee policy. It can be used for problem eBay items, such as those not being 'as described' or not received.
Like PayPal, if a buyer files a chargeback with their bank, eBay's Money Back Guarantee will no longer pursue the claim.
There are differences between the eBay scheme and chargeback with banks, around timeframes and eligibility requirements.
And, again, a buyer can't seek resolution through PayPal and eBay systems at the same time.