How to Avoid a PayPal Chargeback

A chargeback happens when the customer reverses a PayPal payment using his credit card. If you accept PayPal for sales on eBay or from your own website, you may eventually experience a chargeback from an unsatisfied customer. While PayPal chargebacks are costly, there are a number of things you can do to avoid them.

Describe Your Items Carefully and Include Pictures

Giving a complete and thorough description of your item is very important for avoiding PayPal chargebacks. Describe exactly what the merchandise is and what it does. If there is any defect or damage to the merchandise, make sure that you mention it in the item description. Use large type that's at least 12 points in your description. Also include a clear picture of your actual item. If the item is particularly expensive or valuable, take several pictures from multiple angles. Include photos of any defective or damaged areas.

Participate in the PayPal Seller Protection Program

If you're an eBay seller in the United States, you're eligible for the PayPal Seller Protection Program. To participate, you must ship all of your items within 7 days of receipt of payment to a PayPal confirmed address using delivery confirmation. For best results, use an online shipping method such as PayPal shipping. If you're shipping your merchandise overseas, you must use Express Mail to obtain delivery confirmation. If the item cost $250 or more, you must send it with signature confirmation. Only physical merchandise in good condition is eligible for the PayPal Seller Protection Program. Digital merchandise, services and intangible items are not covered by the PayPal Seller Protection Program. Also, items that are picked up or delivered in person aren't covered.

Respond Promptly to Customer Complaints

Customers may complain about the amount of time it takes to receive items, the condition of items and items lost through the mail. You can often avoid a PayPal chargeback by replying promptly to these complaints. Refer back to the original item description to show that the item condition was mentioned. If you sold the merchandise on eBay, mention to your buyer that an eBay listing can't be changed after it has been sold. Scan your shipping receipt and send it to your customer as proof of shipping. If the merchandise seems to be lost in the mail, direct the customer to the post office to make a complaint about delivery.

Keep Good Records of All Sales

Keep a folder for storing shipping receipts and shipping labels. Also maintain a complete record of all email transactions, including transaction confirmations, shipping confirmations and contacts with customers. If you speak with customers over the phone, keep a log of the call times, the people you spoke with and the subjects discussed.

Dispute the PayPal Chargeback

If a PayPal chargeback occurs, you can dispute it. Promptly provide PayPal with your item's tracking number, a copy of the item listing, your return policy or anything else the customer agreed to. If your customer has communicated with you regarding the merchandise or has provided feedback for the purchase, providing this information to PayPal may help you to win your dispute. You may also be able to provide your customer with a replacement product for a lower cost than incurring a PayPal chargeback. Provide proof of delivery of the replacement item to PayPal. Keep in mind that proof of shipping probably won't help you to win the dispute; PayPal typically requires proof of delivery to dispute a chargeback with the credit card company.

These tips should help you to avoid a PayPal chargeback or to avoid losing money if you do experience a chargeback. For more assistance with PayPal problems, visit the PayPal Help Center.

Sources:

"Learn How PayPal Protects Sellers," PayPal.com