PayPal Chargebacks

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PayPal Chargeback Time Limits

PayPal Chargeback Time Limits

PayPal Chargeback Time Limits: The Quick Guide for Merchants & Cardholders

PayPal is unlike many other processors and payment facilitators. For instance, they provide their own dispute management platform, which aims to encourage cooperation between parties and avoid lengthy, drawn-out disputes. Of course, this means the company has its own PayPal chargeback time limits and rules to consider, too.

PayPal Chargebacks at a Glance

Before diving into a discussion of PayPal chargeback time limits, we should clarify this: a PayPal chargeback is different from a PayPal claim. Both are distinct from a PayPal dispute. Keeping this terminology straight can be confusing, but it’s very important.

Disputes and claims both apply to Paypal peer-to-peer transactions (i.e., the buyer and seller are both using PayPal to send and receive money). In contrast, a chargeback means the buyer skipped both the merchant and PayPal, and went straight to the bank instead. When the cardholder files a chargeback, the merchant loses the funds from their account and will be charged a PayPal chargeback fee.

PayPal merchants have a valuable safeguard against chargebacks, though, in the form of PayPal Seller Protection. Think of this program as a form of chargeback “insurance.” It covers the cost of chargebacks so the merchant doesn’t have to pay.

The transaction must fit a specific list of criteria to qualify for seller protection, though. Also, being enrolled in PayPal Seller Protection is no guarantee against chargebacks, but it can help in certain circumstances.

PayPal Chargeback Time Limits

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Breaking Down PayPal Chargeback Time Limits & PayPal Dispute Time Limits

Typically, PayPal prefers to handle disputes in-house. They offer a straightforward approach for consumers who seek to file disputes, and for merchants to respond to them.

Of course, PayPal have their own set of rules and regulations to govern the process. Transactions must meet certain criteria to be eligible for resolution.

PayPal Chargeback Time Limit

As described above, a PayPal chargeback occurs when a customer side-steps PayPal and the merchant altogether and approaches their bank to receive a refund. This means the case will be handled by the cardholder’s issuing bank rather than PayPal.


In most cases, cardholders have 120 days to file a chargeback.

However, the exact PayPal chargeback time frame varies depending on the card brand (Visa, Mastercard, etc.), as well as the reason code assigned to the chargeback.


Once a chargeback has been filed, the merchant has ten days to respond.

Otherwise, the chargeback will be finalized. If the merchant wants to fight the chargeback, though, this process could be extended by several weeks or even months.


During the review process, a temporary hold will automatically be placed on the transaction funds. This hold will stay in place until the chargeback is resolved with the debit/credit card issuer. The funds will be released back to the merchant if the chargeback is settled in their favor.

Though the debit/credit card issuer determines the outcome, PayPal aims to help their merchants through the process. In this scenario, PayPal serves as the merchant acquirer, and so should assist with chargeback representment if appropriate.

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PayPal Dispute Time Limit

PayPal dispute rules are different from a conventional credit card payment. Because PayPal is facilitating the payment on both ends, they have an interest in ensuring that both the the buyer and seller are satisfied.

Buyers have 180 days from the transaction date to initiate a transaction dispute in the PayPal Resolution Center. PayPal will allow a dispute if one of the following is true:

“Items Not Received” Claims

The buyer claims to have paid for an item, but never received what was promised.

“Item Significantly Not as Described” Claims

The buyer claims the item they received is significantly different from what was promised, based on the seller’s description.

In either case, the process starts when the buyer initiates a dispute through the PayPal Resolution Center. The buyer and the seller then have 20 days to work together for a solution (e.g., initiate a refund, reship item).

The buyer can escalate the dispute to a claim at any time during this period. If the dispute is not escalated or resolved after 20 days, PayPal will automatically close the dispute.

PayPal Chargeback Time Limits

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PayPal Claim Time Limit

If the buyer escalates the dispute to a claim, the seller generally has 10 days to respond. If PayPal doesn’t receive a response to the claim in 10 days, they will rule in favor of the buyer and withdraw the funds from the merchant’s account.

Specific PayPal claim time limits will vary according to the reason provided:

“Items Not Received” Claims

If the seller responds to the escalated claim, buyers should respond to the seller within three days.

If the exchange of responses doesn’t resolve the claim, PayPal will decide the outcome of the dispute, usually within 5 to 10 days.

“Item Significantly Not as Described” Claims

If the seller’s responses don’t resolve the claim, PayPal will review the case, obtain additional information from the buyer and seller as needed, and decide the outcome, usually within 5 days.

To receive a refund, buyers are generally asked to return the item within 10 days. PayPal then verifies the return within 5 days and enforces the outcome of the claim.

Important Note:
Most PayPal claims are investigated in less than 14 days. However, it can take 30 days or more to decide the outcome of a claim if there are extenuating circumstances.

Keep Up with PayPal Chargeback Time Limits

PayPal does their best to make the dispute resolution and chargeback processes as straightforward and user-friendly as possible. That said, with so many facilitators, banks, and other entities to sort through, it’s no wonder that many merchants feel overwhelmed with variances in chargeback rules.

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