PayPal disputes can suck the life out of your business if you don’t handle them properly.

Before we dive into excavating the tips and strategies that can help you respond to PayPal disputes better, you need to know the definition of the terms in focus.

The word, Dispute came from the old French word Desputer, which stems from the Latin Disputāre. And by extension, it means a controversy, a conflict of opinion, or point of view.

And as an e-commerce merchant, when you have a PayPal dispute, it means a fight. As the new PayPal policy has come into force, every time a customer files a dispute against you, you will lose money.

You also lose your merchant account in extreme cases, making it vital that you must be intentional with your PayPal dispute mitigation approach.

With the exclusive guidelines in this article, you will have abundant materials to professionally structure your PayPal dispute responses.

The Best PayPal Dispute Response Advice You Can Find Online

Handling PayPal disputes efficiently is crucial for maintaining your business’s reputation and customer satisfaction. Here are essential tips to navigate through disputes effectively:

  1. Approach with Openness: Start by understanding the customer’s perspective without making assumptions. This can help identify the root cause and find a solution that satisfies both parties.
  2. Aim for Amicable Settlement: Showing a willingness to resolve the issue sets a positive tone for negotiation. This approach not only helps in retaining customers but also prevents the escalation of disputes into claims, saving resources.
  3. Prevent Disputes Proactively: Communicate openly with your customers about potential issues that may affect your service. Utilizing platforms like PayPal’s Resolution Center for proactive communication can significantly reduce dispute instances.
  4. Leverage Automation for Efficiency: Consider using automated services like to manage and respond to disputes. These services use AI and machine learning to handle disputes, saving you time and improving your win rate.

How Does a PayPal Dispute Resolution Work?

When there is an issue with a transaction, the customer opens a dispute in the Resolution Center, and PayPal withholds the merchant’s funds.

The merchant has the option to either accept or reject the case.

If they cannot work out their differences, the customer can escalate the dispute to a claim, at which point PayPal will step into the mediation. The PayPal Dispute Resolution team will try to form an accord for both parties.

Below are the standard components in each step of the process:

Step 1: Merchant gets a PayPal dispute notification

When a customer opens a PayPal dispute, the system will send the merchant an alert immediately.

PayPal will temporarily freeze the transaction funds until both parties have resolved and ended the dispute. When they reach a consensus on closing the dispute, PayPal will either credit the funds back to the merchant or refund the customer.

Step 2: Merchant responds to the dispute

The outcome of the case depends on dispute response. PayPal expects you to evaluate the issue and explain, decide if there are merits to grant the customer’s claim.

Generally, the majority of customers file disputes due to the following issue areas:

  • Unauthorized Transactions – A customer claims that a purchase made was without their approval.
  • Item Not Received – The customer paid for the goods but claims they didn’t receive shipment.
  • Item Significantly Not As Described – The customer received the order, but there is a striking variance between what they saw online and the order you shipped.

For your response to the dispute:

  1. Log in to your PayPal account.
  2. Go to the Resolution Center.
  3. Click View under Action next to your case.
  4. Respond to the buyer, making sure to include any relevant information, and then click Post Message. Depending on what dispute the customer filed, you can add specific, compelling evidence to help you win the case with the tips here.

Step 3: Merchant and Customer resolves the dispute

PayPal gives both parties 20 days to resolve the dispute. Often, they can easily find a solution that works for them. And when that happens, the customer closes the case.

However, if both parties cannot reach a consensus on how to resolve the PayPal dispute, the customer can choose to escalate the dispute into a claim.

Disputes Overview

How to Make Your PayPal Disputes Response Better: Our Top 4 Tips

In the words of Katie Shonk, editor of the Negotiation Briefings newsletter at Harvard Law School, in the heat of the moment, it can be challenging to reason about how you got where you are and how you might make things better.

But by taking a break to consider the elements of conflict, you can move toward a more rational assessment of the dispute and come up with ways to address it.

Transferring the wisdom from that quote to our subject, the best approach to resolving a PayPal dispute is effective communication. By talking to the cardholder, you can get vital information to help you deal with the dispute.

Here’s how to enhance your disputes response:

1. Start with an open mind

Research has found that some PayPal chargebacks are the result of merchant error. Hear your customer’s side of the story. Don’t make unnecessary assumptions; get all the data you need to make a well-informed decision on how to fight the dispute. Rushing into action at first sight of a dispute can result in the loss of a valuable customer and reputation damage.

2. Be willing to settle the dispute

If you are unwilling to settle the dispute amicably, then there’s no use talking to the customer.

Your disposition will determine the reaction of the customer in most instances. Be helpful, show the cardholder that you intend to resolve the PayPal dispute, and you would’ve set the tone for mutual collaboration.

Stay focused on finding a solution, not on proving why you are right. A compromise today could open doors for more businesses in the future. In the end, it’s in your best interest to settle the dispute with the customer rather than have it escalated into a claim, which will cost you more resources.

3. Be proactive in avoiding PayPal disputes

If your business is facing a difficulty that could result in not meeting your clients’ expectations, you have to find creative ways to get your customers on your side.

For example, PayPal designed The Resolution Center to help merchants communicate with their customers and avoid a dispute. If you face a challenge that could result in delays to fulfill orders or a shortage of supplies, you could leverage the platform to send a message to your customers, informing them of that challenge.

That way, you don’t leave your customers in limbo, wondering what happened, as that can lead to them filling a dispute.

4. Automate your PayPal disputes responses

The reality is that you can do everything we stated above and still have issues of PayPal disputes.

Chargebacks have become a form of friendly fraud. Some customers use chargebacks to take advantage of merchants. That is why you need a PayPal Dispute Automation service such as

They use artificial intelligence and machine learning to recognize when a dispute on a payment occurs and fight those PayPal disputes and chargebacks as you’d wish.’s PayPal Dispute Automation pairs the power of technology with human intelligence.

With over $10M regained from disputes, Chargeflow.i0 helps the boldest brands worldwide focus on building their brand, serving their customers, and building better products.

Their super in-depth analysis and real-time statistics allow you to manage and understand your chargebacks without breaking a sweat.

What to Do When a Customer Escalates a PayPal Dispute to a Claim?

By filing a claim, the customer gives PayPal the authority to evaluate the dispute and reach a decision for both parties.

As intimated above, PayPal offers customers the option to file a claim within 20 days of opening the dispute.

When a claim happens, PayPal will require you to give them compelling reasons to determine whether to rule in your favor. Below are some pieces of persuasive evidence that can be satisfactory in your PayPal disputes response:

  1. A third-party shipping receipt, a tracking number, or signature confirmation to ascertain that the merchant delivered an item.
  2. Proof that you shipped a replacement or issued a refund if the buyer received their order, but they found issues.
  3. A signed contract or other evidence indicating the merchant offered the services on the dispute.
  4. If the product or service was digital, the IP address, timestamps, Server, or activity logs to show the customer accessed the product or service.

You must be proactive in furnishing them with this information.

Otherwise, you might lose the claim. Follow through on the issue until PayPal has reached a decision you can agree to. Don’t resign to only the digital platform process.

Pick up a phone and call someone if you must.

Power your PayPal Disputes Response with Technology

It takes about 75 days to resolve a PayPal chargeback.

Instead of spending that much time on PayPal disputes, can help you automate the whole process.

The software makes it easier for you to run and scale your business without worrying about chargebacks and disputes weighing you down.

With an average of 85% dispute win rate offering, which is way above industry standard, you can stay on top of your game while we do the work for you!