PayPal Chargeback FeeWhat is a High Volume Dispute Fee & a Standard Dispute Fee?

How Much are PayPal Chargeback Fees Costing You?

PayPal made their name as a leader in P2P (person-to-person) payments. The company pioneered the concept that’s been taken up by newcomers like Venmo and Zelle. Nowadays, though, PayPal is more widely used as a simple, straightforward approach to accepting payments for businesses.

But what happens when you receive a PayPal chargeback? Are there PayPal chargeback fees? How much are they, and what happens if you don’t pay them?

PayPal Chargebacks: at a Glance

We should clarify this up front: a PayPal chargeback is different from a PayPal claim or dispute.

In a peer-to-peer transaction between PayPal users, the company can resolve the claim internally. By contrast, a chargeback occurs when a customer bypasses PayPal and goes straight to the bank. When this happens, merchants lose the funds from the sale, and are also assessed a PayPal chargeback fee.

PayPal offers merchants complimentary Seller Protection to manage chargeback risks. This program functions as a sort of chargeback insurance for qualifying sales. Don’t start celebrating just yet, though.

To qualify, a transaction must have involved physical goods that were shipped as described to the buyer’s address in the Transaction Details page. In addition, merchants must not have used PayPal Direct, Virtual Terminal, PayPal Business, or PayPal Here.

If you’re using PayPal as a merchant, there’s a good chance you’re using PayPal Business. That means you’re probably not protected.

Learn more about PayPal chargebacks

What is a PayPal Chargeback Fee?

PayPal assesses fees for all chargebacks filed against you on their platform. Buyers can file chargebacks against you for purchases made from their account, or via Guest Checkout. In either case, you will get a PayPal chargeback fee in the currency of the original transaction listing.

The company deducts this non-refundable PayPal chargeback fee directly from your account. But, how much is a PayPal chargeback fee? What does it cost?

The fee varies depending on the currency used. For example, the PayPal chargeback fee is currently set at $20 for transactions conducted using US Dollars. For transactions conducted using other currencies, refer to the table below:

Currency	Chargeback Fee
Australian Dollar	22 AUD
Brazilian Real	35 BRL
Canadian Dollar	20 CAD
Czech Koruna	400 CZK
Danish Krone	120 DKK
Euro	16 EUR
Hong Kong Dollar	155 HKD
Hungarian Forint	4,325 HUF
Israeli Shekel	75 ILS
Japanese Yen	1,875 JPY
Malaysian Ringgit	65 MYR
Mexican Peso	250 MXN
New Zealand Dollar	28 NZD
Norwegian Krone	125 NOK
Philippine Peso	900 PHP
Polish Zloty	65 PLN
Russian Ruble	640 RUB
Singapore Dollar	28 SGD
Swedish Krona	150 SEK
Swiss Franc	22 CHF
Taiwan New Dollar	625 TWD
Thai Baht	650 THB
U.K. Pounds Sterling	14 GBP

This can lead to additional hiccups if you accept multiple currencies. You need to have the funds available in your account in the currency of the original transaction to cover the chargeback. Otherwise, PayPal will charge an additional fee for currency conversion.

For example, let’s say a buyer in Europe files a chargeback for a transaction using Norwegian Krone. However, you already converted the Krone from the original transaction to US Dollars. In this case, you need to pay an additional currency conversion fee (on top of the 125 NOK PayPal chargeback fee). This conversion fee is based on PayPal’s current exchange rate (usually between 2-5% of the original transaction). That can add up fast, especially if you deal in high-dollar value items.

What are PayPal Dispute Fees?

PayPal dispute fees are different from PayPal chargeback fees.

These fees apply to transactions disputed via their online dispute resolution process. In order to dispute a cardholder’s claim, the purchase must have been made from a PayPal user account or through PayPal Guest Checkout.

There are two categories that PayPal dispute fees fall into: standard dispute rate, or high-volume dispute rate. According to PayPal, dispute fee categories are determined by the amount of ‘Item Not Received’ and ‘Significantly Not As Described’ claims you receive compared to the total number of PayPal sales you received for the previous three months.

If your PayPal dispute ratio exceeds 1.5%, and you processed more than 100 sales transactions in the previous three calendar months, you will be charged the high volume dispute fee for each dispute. Otherwise, you will be charged the Standard Dispute fee for each dispute:

Currency	Standard Dispute Fee	High-Volume Dispute Fee
Australian Dollar	25 AUD	50 AUD
Brazilian Real	65 BRL	130 BRL
Canadian Dollar	20 CAD	40 CAD
Czech Koruna	350 CZK	700 CZK
Danish Krone	100 DKK	200 DKK
Euro	14 EUR	28 EUR
Hong Kong Dollar	115 HKD	230 HKD
Hungarian Forint	4,585 HUF	9,170 HUF
Indian Rupee	1,080 INR	2,160 INR
Israeli Shekel	55 ILS	110 ILS
Japanese Yen	1,630 JPY	3,260 JPY
Malaysian Ringgit	65 MYR	130 MYR
Mexican Peso	300 MXN	600 MXN
New Taiwan Dollar	455 TWD	910 TWD
New Zealand Dollar	25 NZD	50 NZD
Norwegian Krone	104 NOK	280 NOK
Philippine Peso	760 PHP	1,520 PHP
Polish Zloty	60 PLN	120 PLN
Russian Ruble	1,125 RUB	2,250 RUB
Singapore Dollar	20 SGD	40 SGD
Swedish Krona	145 SEK	290 SEK
Swiss Franc	15 CHF	30 CHF
Thai Baht	465 THB	930 THB
U.K. Pounds Sterling	12 GBP	24 GBP
U.S. Dollar	15 USD	30 USD

As per the PayPal User Agreement, the company will not charge you a Standard Dispute Fee for any disputes that are:

• Inquiries in the PayPal Resolution Center that are not escalated to a claim with PayPal.
• Resolved directly between you and the buyer and not escalated to a claim with PayPal.
• Claims with a transaction value that is less than twice the amount of a standard dispute fee.
• Deemed by PayPal in its sole discretion to have met all the requirements under PayPal’s Seller Protection program.
• Reported by the buyer directly to PayPal as an unauthorized transaction.
• Decided in your favor by PayPal or the issuer.

Regarding high-volume merchants, you will be exempted from a high volume dispute fee in the following situations:

• Inquiries filed in PayPal’s Resolution Center which are not escalated to a claim with PayPal.
• Disputes resolved directly between you and the buyer, which are not escalated to a claim with PayPal.
• Disputes reported by the buyer directly with PayPal as an unauthorized transaction.

So, suppose you get charged a high volume dispute fee. In that case, you may be required to provide a remediation plan that explains the increased rate of disputes, any action you’ve taken to limit their number, and a timeline for an overall reduction.

Furthermore, let’s say you somehow get involved in any activity restricted by the PayPal user agreement. In that case, PayPal reserves the right to charge you a high-volume dispute fee for any current — and future — transactions.

Does PayPal Offer Any Other Chargeback Protection?

Yes. As of August 2, 2021, PayPal offers PayPal Chargeback Protection on card transactions.

PayPal Chargeback Protection gives you the option to pay a higher interchange fee for card transactions processed through PayPal. In exchange, those transactions will be protected against chargebacks.

Of course, even this added protection has its limits. You may be required to provide evidence in order to get protection under the program. Also, there are certain transactions and customer claims to which PayPal Chargeback Protection does not apply. For example, if the buyer claims your merchandise was defective, or that it was “significantly not as described,” then you would not be covered.

Learn more about PayPal Chargeback Protection

Will My PayPal Chargeback Fee Get Refunded if I Fight the Dispute?

Short answer: no.

If you get a chargeback, and you’re confident that the claim made by the buyer is invalid, you can fight back. After PayPal notifies you of the chargeback, go to the PayPal Resolution Center. From there, take the following steps:

#1  |  Click “Respond” (under the “Action” tab) next to the case.

#2  |  Review the complaint & click “Resolve Chargeback Now.” Choose whether to fight back or simply accept liability.

#3  |  If you want to fight, you should provide relevant additional evidence to support your case.

#4  |  Click “Continue,” then follow any further instructions from PayPal.

PayPal will assemble your evidence into a case, then submit it to the cardholder’s bank. The issuer will review the case then provide a verdict. If you succeed, the bank will return the money from the original transaction. There is no PayPal chargeback fee refund, though.

You will not get the funds from this fee back, even if you win a dispute. Like any acquirer, PayPal uses the money from this fee to cover the cost of managing and submitting your case. That’s why it’s best to take steps to prevent PayPal chargebacks whenever possible.

Learn more about PayPal Chargeback Prevention

Tread Carefully With PayPal Chargebacks

There are definite advantages to using PayPal’s service. It’s great for small businesses or sole proprietorships that only conduct occasional transactions. It’s also ideal for mobile merchants who can’t afford to invest in service from a traditional merchant processor.

The plug-and-play, “self-service” nature of PayPal processing comes as a trade-off, though. For example, third-party chargeback mitigation is less-effective with PayPal, meaning you’re primarily on your own when it comes to chargeback management.

Need help keeping PayPal chargeback fees in check? Download our free guide, 50 Insider Tips to Prevent More Chargebacks. Inside, you’ll find helpful, actionable information to help stop disputes and prevent those costly PayPal chargeback fees before they happen.