I frequently write about making money online, personal finance, technology, and gardening.
If you have purchased an item using your Paypal account and the item has not arrived or is not as described and communications with the seller have failed to resolve your problem you may need to open a Paypal dispute to reclaim your payment.
If you have arrived at this page it is probably because you have purchased an item from eBay and used Paypal to pay for it but there is a problem and you want your money back. Until recently most Paypal transactions were used to pay for items bought on eBay, but as the popularity of Paypal has grown it has become one of the world's largest online card payment processing merchants and is used by many small online retailers.
As Paypal does not charge a monthly fee and has very few checks on merchants using its services, it is used by many new and inexperienced online retailers. Due to this lack of experience problems can arise. Many online stores are run by a single individual who may lack the professionalism to deal with problems amicably or who may take complaints personally. This is usually when a simple request to return an item can turn in to a problem and you will need to open a Paypal dispute. Disputes are also used if your Paypal account has been used fraudulently.
If you are a seller and have had a Paypal dispute opened against you, I have created a guide for you here.
Disputes Are a Last Resort!
Disputes are a last resort and should only be opened when everything else has failed. When you open a dispute against a seller you are basically saying that you believe they are dishonest or that their product or service is very poor. This will just cause animosity and the seller will be less likely to cooperate.
- Items do get lost in the post, people and computers do make mistakes and delays do happen. Try to work with the seller, not against them. Usually the item is just delayed or needs to be collected from the courier depot or local post office.
- Always try to contact the seller first by email or phone, usually a problem can be resolved with one quick email or chat.
- If it is an eBay item you can 'Request user Information' to obtain their phone number. Try and use 'eBay Messages' as many email spam filters may automatically delete your message to the seller if it's from an unknown email address.
- If the item is lost in the post the seller should either send out a replacement and claim for the lost item or just issue a refund. But please remember that most couriers only class an item as lost after a particular number of days so the seller may not be able to send out a replacement until this time has elapsed. International items must be missing for a much longer period until they are officially classed as lost.
- If you wish to return the item for a refund the seller will, in most cases be obliged to offer a refund unless they have stated that refunds will not be given. You must check the consumer rights of your Country or State for specific details.
If your account has been used fraudulently you should open a dispute immediately.
Try to Avoid Having to Open Disputes
The first rule is to avoid having to open a dispute. Check the seller's reputation first.
- If you are buying an item from eBay always check the seller's feedback score, feedback comments and detailed seller ratings. If the seller's reputation is poor then just avoid them.
- If you are buying from an unknown website or store, do a quick Google search for reviews of the website first.
Try and have the item sent using a service with tracking details.
The Paypal Dispute Process
1. Open a dispute.
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As a buyer you can open disputes up to 45 days from the date of dispatch. You will be emailed by Paypal to notify you and it will show in the 'Resolution Centre' when you are logged into your Paypal account.
2. Communicate with the seller.
You and the seller may exchange messages to try and resolve the dispute in the 'Resolution Centre' on the Paypal website. Be friendly and cooperative. Both the seller and Paypal will be able to see what you put in these messages so avoid threatening or abusive language and just stick to the facts.
If the dispute is not escalated to a claim within 20 days the case will automatically close.
If the seller does not refund your payment after you have returned an item or offer a partial refund and you feel you need Paypal to act as an intermediary you may escalate the dispute to a claim.
3. Escalate to a claim.
If the seller has not replied or attempted to resolve your problem then you can escalate to a claim which means you are asking Paypal to look at the case and decide the outcome. They will request information from the seller such as dispatch date and tracking information and may possibly ask you for some additional information too. You should reply to all messages from the seller and information requests from Paypal.
4. The Decision
Paypal will review the case and decide the outcome. If they decide in your favour the payment will be returned to your Paypal account & the case closed. If they decide in the sellers favour the case will be closed and the payment will remain in the sellers account.
If the case is closed in the seller's favour and you feel this outcome is unjust, you may want to take legal action against the seller such as taking them to the Small Claims Court or contacting a lawyer.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2014 SpaceShanty
Melisa bongado on April 07, 2020:
Help my money hold paypal balance
Joe from north miami FL on May 23, 2014:
never had a dispute hope I won't in the future good info though.
SpaceShanty (author) from United Kingdom on May 05, 2014:
Yes if you work with the buyer you can usually sove the issue quickly without losing any money. Just ignoring the buyer will mean you lose the item and lose the money.
Anamika S Jain from Mumbai - Maharashtra, India on May 03, 2014:
My first ever Paypal dispute happened after someone bought a product from my site and did not get the delivery of the product because his computer got shut down before redirecting to the registration page. I was busy relocating and holidaying that time and did not see his message. He opened a Paypal dispute after 3 days. As soon as I saw the message (2 days later), I responded to him promptly. I apologized for the delay in responding and offered him an upgrade at no cost. I send him a follow up message and offered him another freebie for getting into my list. A few days later, I noticed that he bought from me again. So I guess I treated the Buyer right and resolved the dispute.