PayPal is an international e-commerce payment and financial technology solution providing company. PayPal empowers its users to make payments to anyone from their bank account in a flick of a second. PayPal processed a total payment of more than $199 billion in the fourth quarter of 2019 with an addition of 9.3 million new accounts.
PayPal does posses some policies against fraudulent payments in order to prevent the rights of both sellers and buyers. The most discussed one such policy is PayPal Chargeback.
What is PayPal Chargeback?
A chargeback or reversal is started from the side of the buyer or customer in accordance with credit card association regulations and timeframes. He/she contacts his/her credit card service provider in order to reverse a transaction that has already done for a service or item and the merchant hasn’t been able to provide satisfactory level services to the buyer.
How to Fight PayPal Chargebacks?
A buyer can claim for the Chargeback on PayPal on account of the following reasons-
- If your card has been used for any Fraudulent/Unauthorized Payment.
- The seller has provided you with bad quality of goods such as empty box, expired item, non-functioning item.
- The customer is charged more than the mentioned price.
When a buyer or customer files to fight Paypal chargeback, the customers’ credit card company informs PayPal’s Merchant Bank and then PayPal immediately emails the service provider or the seller. Then the seller can log in to their account and view the case progress in the Resolution Centre. In many Chargeback issues, there is also a possibility for the buyer and seller to resolve the matter on a mutual understanding or negotiation.
The disputed amount for Chargeback as claimed by the buyer or the customer is deducted from PayPal by the Credit Card Company. In return, PayPal freezes the same amount from the seller’s PayPal Balance. Seller and PayPal both try to sort the matter and if the buyer wins the claim then PayPal deducts the frozen amount else, in other scenarios Credit Card Company pays the amount which is then transferred to the Sellers’ account.
It is quite genuine to have such policies for the customers but PayPal chargeback had stirred the market a lot. It is true that not all the chargeback claimed are false, almost 40% claims are due to Sellers’ mistakes and had been settled by PayPal, but still, a lot of merchants and service providers are facing a huge loss. Thus it is advised by PayPal to all the sellers to ensure certain standard measures in order to reduce chargeback issues.
