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PayPal Resolution Center

PayPal Resolution Center

How the PayPal Resolution Center Helps Resolve PayPal Disputes

PayPal is unique compared to many other options for card processing and acquiring services. The company serves in multiple capacities, supporting person-to-person online money transfers, as well as serving as an acquirer and processor. One notable unique characteristic is the PayPal Resolution Center offered by the service.

At this point, PayPal is one of the major processors in the US market. While they cater to merchants of all sizes, they’re especially popular with small businesses.

PayPal offers the ability to accept card payments with little up-front investment. All you really need is an internet connection and a card reader (provided by PayPal), and you’re up and running. As such, it can be a great option for merchants who conduct a relatively small volume of card transactions. For instance, it’s a popular option for cafés and small eateries, as well as businesses with mobile operations like food trucks and other mobile vendors.

But, despite the differences between PayPal and more traditional card processors, merchants using the service are still susceptible to chargebacks. It’s important to understand the contours of the PayPal chargeback process, including the ins-and-outs of the PayPal Resolution Center, and how this system impacts disputes on the platform.

PayPal Disputes are Different From Chargebacks

Let’s assume a customer wants to fight a charge on their account. There are two key channels through which the customer can address the situation:

PayPal Dispute/Claim

PayPal Dispute/Claim

The buyer contacts you directly through PayPal’s Resolution Center. You then collaborate with the buyer through the site to find a solution. If you can’t agree to a solution, the buyer can then escalate the dispute to a PayPal claim. At this stage, they ask PayPal to reverse the transaction. PayPal then reviews the case, and acts accordingly.



The buyer contacts the issuing bank, rather than you or PayPal, and requests a transaction reversal. The bank then initiates the standard chargeback process.

At first glance, these two processes might seem similar; in either case, the customer disputes a charge, and you either return the money, or the case is closed. It’s important to distinguish a PayPal dispute from a chargeback, though.

A PayPal transaction dispute is essentially a formal announcement that a problem exists. In this scenario, PayPal’s aim is to force the buyer into contacting you before things get completely out of hand. Compared to a chargeback, it’s a less confrontational way of ensuring all parties are in the loop; otherwise, buyers may bypass you altogether.

With this dispute process, PayPal freezes any funds from the transaction, and promises they won’t try to collect the disputed amount in hopes that you and your buyer will work things out. If that doesn’t happen, and the customer escalates to a PayPal claim, the company can step in and serve as an impartial mediator.

It should be noted that if the purchaser paid with a PayPal balance—money being held in an electronic wallet by PayPal—a dispute is the only recourse. If no credit card was used, calling the bank is not an option.

Disputes Got You Down?

Chargebacks911® has the tools and strategies you need to prevent your next dispute.


Resolving Disputes Through the PayPal Resolution Center

It’s better for all parties if you and your buyer can work out the situation through the PayPal Resolution Center. This is a portal located on the company’s website (it is not currently accessible through the mobile app). The PayPal Resolution Center offers faster resolution, as you deal directly with the opposite party, and there’s no processing fee.

In contrast, a chargeback involves multiple parties including PayPal (acting as the merchant acquirer), the issuing bank, and the card network. This results in a dispute process that could take weeks, or even months, to resolve. Plus, like any processor, PayPal charges you a fee to cover the cost of processing the dispute (up to $20 per transaction).

Customers can use the PayPal Resolution Center to:

  • Report a problem with a transaction to PayPal
  • Communicate directly with the seller to resolve PayPal disputes
  • Resolve an account limitation
  • Report suspected unauthorized activity
  • Ask PayPal to investigate a potential problem with a transaction

As a seller, you can respond to any customer inquiries and transaction problems through the portal. The PayPal Resolution Center allows sellers to communicate with buyers and reach a resolution that is acceptable to all parties.

This portal is a great resource to enable collaboration with your buyers and resolve disputes. It’s important to note, though, that the PayPal Resolution Center is only an option for transactions conducted using PayPal’s payment services.

If the customer turns to the bank to file a chargeback—bypassing both PayPal and the merchant—the dispute center will not be able to help. The tool only works when PayPal facilitates payment from both ends of a transaction. If the customer uses a payment card, that means PayPal is only serving in the role of a merchant processor and acquirer. This is another advantage that PayPal disputes have over a conventional payment card dispute.

PayPal Resolution Center

The 2021 Chargeback Field Report

The 2021 Chargeback Field Report is now available. Based on a survey of over 400 US and UK merchants, the report presents a comprehensive, cross-vertical look at the current state of chargebacks and chargeback management.

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What About Seller Protection?

The PayPal Resolution Center can’t help you in the event of a credit card dispute. That doesn’t mean you’re on your own if the customer files a chargeback, though.

You might have heard something about PayPal Seller Protection. With this program, PayPal will cover you for the full purchase amount of an eligible transaction, plus any chargeback fees resulting from debit and credit card-funded transactions. This works with PayPal disputes, as well as bank chargebacks; it’s essentially a form of “chargeback insurance” offered free to merchants using the PayPal platform.

Not all transactions qualify for the program, though. To qualify for PayPal Seller Protection, one of the following conditions must apply:

  • The payment was unauthorized, meaning buyer didn’t authorize, or benefit from, funds sent from their PayPal account.
  • The buyer didn’t receive the goods purchased.
  • A transaction is reversed because of a successful chargeback by a buyer, or a bank-funded payment is reversed by the buyer’s bank.

In addition, you may be totally ineligible for the Seller Protection, depending on your merchant category code (MCC). To qualify, you must:

  • Have a US-based address associated with your PayPal, and ship goods from that address.
  • Sell physical goods; digital offerings are not eligible.
  • Respond promptly to all requests for information from PayPal.
  • Ship goods within seven days of payment.

Those are the basic requirements, but there may be additional stipulations that differ according the to claim filed. There is also PayPal Chargeback Protection, introduced in 2021. This provides additional chargeback "insurance" on card transactions for an added fee.

Is PayPal at Checkout the Answer?

Payment cards remain the preferred choice for consumers when shopping online. However, you can take advantage of mechanisms like the PayPal Resolution Center and Seller Protection by adding PayPal as an option for customers at checkout.

One study found that PayPal had an impressive conversion rate among consumers. Unlike payment cards, which require several information fields, buyers can simply log in to pay with PayPal, removing significant friction from the checkout process.

While this offers a definite advantage, we can’t overstate the importance of general chargeback reduction to manage your risk. The best approach is to identify chargebacks based on their fundamental source—merchant error, criminal fraud, or friendly fraud—and deploy tools and strategies to mitigate those risks. Want to learn more? Click below to speak with one of our chargeback experts today.

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