I just received a PayPal dispute, What should I do?

If you received a PayPal dispute, don’t worry. It may not be the last time so let’s see what we can learn about it. Online sellers are not perfectly protected but there are always precautions to avoid the disputes or win the cases if it happens.

Why did I receive a PayPal dispute?

Basically disputes are for two reasons:

Non-receipt: In the case of tangible items there is a chance that the buyer might not receive the items.

Not as described: This is when the description of the sold item is not the same as what was sent to the buyer. PayPal only provides this service for tangible goods.

What happens when you receive a dispute?

PayPal will send you an email and let you communicate with your buyer. However the conversation will be archived on PayPal website if it needs to be reviewed later. A PayPal dispute has no negative effect on your account unless it is not resolved in a timely and professional manner.

What should you do if you receive a PayPal dispute?

In the first stages of a dispute the best thing is to log into your PayPal account and try to see the problem from buyer’s perspective, pinpoint the problem and try to resolve it between yourselves.

How can you as a seller win a PayPal dispute?

In the case that the dispute is escalated:

Non-receipt: PayPal introuced the seller protection policy to protect sellers but you should consider a few things before sending the item if you want to be protected:

  • Sellers should have a verified account.
  • Item is shipped to an eligible address (Can be checked on the transaction page).
  • Proof of delivery (Copy of shipment record).
  • For items over a value (differs by country) you need a signature from recepient or in other words use a signed delivery.
  • Send the items in 7 days of payment (this can be checked through proof of shipment and tracking).

Not as described: To avoid not as described disputes a seller should try to describe the item accurately and detailed to avoid any misunderstanding. There is no specific policy to protect sellers in this case.

PayPal dispute escalated: Now What?

If a PayPal dispute is escalated by the buyer or seller it means that the parties could not resolve the dispute through communication therefore they would like PayPal to supervise the conversation to resolve the dispute in a timely manner. In case the buyer and seller do not come to a resolution PayPal will decide which party gets to keep the money.

There are a number of choices when a dispute is escalated:

Non-Receipt: If the seller has the above mentioned (seller protection policy), e.g. proof of postage and tracking, he can add the tracking number to the transaction. It is always a good practice to check the status of the order (delivered or not delivered) in the courier page.

Important Note: If you are not qualified for seller protection (e.g. you have not sent the item in 7 days of payment), it is very likely that you will not get your money back. Then it is a good idea to contact your postal company and ask them to return or pick up the item.

Not as described: In this case you have multiple choices to resolve the dispute:

  • Refund the buyer.
  • Ask the buyer to return the item for a full refund. In this case the buyer should provide a tracking number for the returned item or he/she will not win the case.
  • Try to resolve the dispute with a partial refund.
  • Disagree with the claim. You should be able to provide sufficient evidence from your online description (e.g. on eBay) or any other documentation that the buyer was aware of the description prior to the purchase or prove that the item was in the condition described (here you can be very creative but I don’t know if it works).

At the end of the day, the best way to resolve a dispute is to communicate quickly with the buyer and pinpoint the problem. It saves a lot of your time and trust me it will pay off when the buyers come back to you again.

‘Not as described’ policy is biased to protect the buyer, if you have ideas to contribute to prevent/resolve such issues, please follow it up in the comments.

UPDATE: Please note that our blog has moved to http://blog.scrobbld.com/

- http://www.scrobbld.com: A new way to manage your eBay and PayPal orders.

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2 comments so far

  1. isaac on

    as a bit of an update I had a certain friend who worked at paypal. Apparently they seem secure enough internally but they are still shady. From my point of view, they need to flat out and become a full bank. I personally won’t allow anything over 200$ to be processed over paypal given their lack of customer protection/support.

    It really is too bad google doesn’t step into that market though.

  2. scrobbld on

    Well google checkout is certainly trying to compete but with new ebay policies (Please go back to the article on “sellers must use paypal” ) I am not sure if google is much of a competition.
    About the safety of PayPal I think it works better than most of the available services and therefore buyers trust and prefer it. That pushes the seller community into using PayPal more and more.
    Please share your thoughts if you think PayPal is not secure enough.


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