When you’re running a business, learning how to effectively resolve customer issues is key — and that starts with understanding how claims work.
Claims happen when a buyer complaint is escalated to PayPal, or the buyer files an unauthorised transaction. If the dispute can’t be resolved, either party can escalate it to a claim during the 20-day period.
That’s when PayPal becomes directly involved and makes a decision using the information provided. A buyer can also file a claim (without first initiating a dispute) if they feel their account has been used fraudulently. During the resolution process, we may ask either or both parties for more information via email.
In this guide, we’re sharing the advice and tools you may need to help manage and avoid claims.
When a customer and a business owner can’t resolve a dispute, the customer can file a claim to request a refund from the payment processor, such as PayPal. However, if a customer suspects fraud in their account, they can skip the dispute process and file a claim right away.
Learn more about what a claim is and why it can happen.
There are a few different types of claims you should be familiar with, including:
Struggling to resolve a dispute with a customer? If you feel the need to escalate it to a claim, follow these steps:
If a claim has been logged, you’ll be notified via email. You’ll also see that a case is created in the Resolution Centre.
Having a claim filed against you doesn’t necessarily mean you’ll be penalised. There are no automatic fees levied against you, and your seller feedback won’t automatically be affected.
But you should keep in mind that if your claim rate is too high or other indicators are trending negatively, your account could be reviewed, and reserves or limitations could be put in place.
For instance, a temporary hold may automatically be placed on money when a claim is opened. This hold will stay in place while you work with the buyer to resolve the claim and will be released back to you if the claim is settled in your favour. For Unauthorised claims or Item Not Received (INR) claims filed through the PayPal Buyer Protection program, if you provide the relevant information as outlined in the PayPal Seller Protection, and the claim is decided in your favour, the money will be released to you. Note: Seller Protection is available on eligible transactions only. Limits, terms and eligibility criteria apply. Learn more about Seller Protection.
Once a claim has been filed, a great thing to do is quickly provide any requested information.
Resolving a claim filed with PayPal can be simple. If a customer files a claim or a dispute is escalated to a claim, follow these steps to respond as soon as possible:
After you make a selection, follow the instructions. Keep in mind that once you upload the files, you won’t be able to view them again — you’ll just see a summary of the information you’ve submitted.
If a claim is filed, you as the seller would be asked to respond within 10 days. If you don’t respond, the claim will automatically close in the customer’s favour — and a full refund will be issued.
If you do respond, PayPal will work to evaluate the information provided and determine the outcome. This claim resolution process usually takes about 30 days, but more complex cases may run longer.
Preventing claims may come down to curbing disputes. The good news is there are a few steps you can take to help avoid them from happening in the first place, such as:
Instead of worrying about when you may face a customer claim, take a proactive approach with risk management solutions. Plus, check out our comprehensive guide on how to manage disputes and claims.
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