PayPal Chargebacks

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PayPal Chargeback Fee

PayPal Chargeback Fees

How Much are PayPal Chargeback Fees Costing You?

Most people are familiar with PayPal as a P2P (person-to-person) payments platform. The company pioneered the concept that’s been taken up by newcomers like Venmo and Zelle. Now, 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.

For a P2P transaction in which both parties are PayPal users, the company can resolve the claim internally without involving the bank. PayPal will simply serve as an arbitrator and work directly with both parties.

In contrast, a chargeback occurs when a customer either did not use a PayPal account, or chose to bypass PayPal and go straight to the bank for help. In that case, resolving the dispute easily is out of PayPal’s control. When the cardholder files a chargeback, you’ll lose the funds from your account and be charged a PayPal chargeback fee (more on that later).

Even if a customer files a chargeback, some PayPal users still have one very valuable safeguard: PayPal Seller Protection. You can think of this program as a form of chargeback insurance, covering the cost of chargebacks so you don’t have to pay.

PayPal Chargeback Fee

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The problem is that some transactions are not covered by Seller Protection. To qualify, the transaction must fit a specific list of criteria:

  • The transaction must be for a physical, tangible, and shippable good.
  • The permanent address linked to your account is in the US.
  • You shipped to the address on the Transaction Details page, and the item arrived as described.
  • You responded to PayPal’s requests for documentation.
  • You did not use PayPal Direct, Virtual Terminal, PayPal Business, or PayPal Here.

That last one is very significant. 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.

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 incur 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 must 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, assume 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.

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What are PayPal Dispute Fees?

PayPal dispute fees are distinct from PayPal chargeback fees. They 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 disputes that are:

inquiries

Inquiries in PayPal’s Resolution Center that are not escalated to a claim with PayPal.

direct resolve

Resolved directly between you and the buyer and not escalated to a claim with PayPal.

seller protection

Deemed by PayPal in its sole discretion to have met all the requirements under PayPal’s Seller Protection program.

reported direct to paypal

Reported by the buyer directly to PayPal as an unauthorized transaction.

Decide in your favor

Decided in your favor by PayPal or the issuer.



You will not be charged a high volume dispute fee for disputes that are:

inquiries to paypal

Inquiries in PayPal’s Resolution Center and not escalated to a claim with PayPal.

direct resolve

Resolved directly between you and the buyer and not escalated to a claim with PayPal.

reported direct

Reported by the buyer directly with PayPal as an unauthorized transaction.


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 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
PayPal Chargeback Fee

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What to Do If You Receive a PayPal Chargeback

Upon filing a dispute, the cardholder’s bank withdraws funds from your account, meaning you lose revenue and merchandise. You’re also responsible for the PayPal chargeback fee, which covers the cost of administering the chargeback. Don’t panic, though: you still have some options.

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

Carefully review the complaint, then click “Resolve Chargeback Now.”

3

Choose whether to fight back if you have the evidence specified or simply accept liability for the dispute.

4

If you want to fight, you can provide any relevant additional evidence to support your case.

5

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.

You should never fight any legitimate chargeback. This would be akin to calling your customer a liar, and will ultimately prove fruitless. However, it’s always good to fight against so-called “friendly fraud” chargebacks. Not only will you recover your funds, but you can also help retrain customer behaviors and prevent future attacks.

It’s important to note that 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 Wisely 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.


Prevent Chargebacks.

Fight Fraud.

Recover Revenue.