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How to Handle Disputes After Paying With PayPal

written by: Regina Woodard•edited by: Amy Carson•updated: 10/19/2010

PayPal is a great way to send and receive money online, allowing for people to protect their bank account numbers. It is especially useful with auction sites, like eBay. But what happens if a buyer or seller has a dispute? Read on for tips on handling PayPal disputes.

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    With more and more access to information and data via the Internet, there are now variety of ways in which to do business, send funds, and even receive funds online. It was this revolution in which the online pay site PayPal was born, allowing for auction site buyers and sellers to send and receive payments without the need for sending personal checks or revealing credit card and bank information to someone they do not know.

    But what happens in the event of a dispute? It is not uncommon for buyers and sellers both to dispute payment or merchandise; so how does a person handle these PayPal disputes?

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    What Is PayPal?

    So what is PayPal and why is it so important? PayPal is an online service that allows for sellers and buyers to send, receive, and even transfer money in a fast and safe method of payment. Many online retailers, auction sites, and even website utilize this method of PayPal.com payment and receiving payments. Users sign up on the website and then enter their information on how they would like to receive payments or how they would like to send payments.

    While PayPal is certainly a fast and easy way to retrieve and forward payments, there can be issues that arise. For example, users of the popular online auction site eBay may come upon a dispute over a purchased item. A buyer may not feel that a seller represented an item correctly or perhaps paid for the item and then never received it. Or perhaps, a seller sold an item to a buyer, but that buyer has not paid for the item or only paid a portion on the agreed upon amount.

    In these cases, sometimes the only recourse is to utilize a dispute.

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    Handling PayPal Disputes

    There are two areas on how to handle PayPal disputes - from the perspective of the seller or that of the buyer.

    For both individuals, when faced with a dispute, the first thing is to speak to the person who is issuing the dispute. Usually, sellers and buyers need to provide information on how they can be contacted in the case of questions or comments from others. If you have tried getting in contact with the other person, to no avail, you may need to escalate the issue. Depending on the website in which a transaction has occurred, check to see if they have a policy on what to do when entering a dispute.

    To dispute a PayPal transaction, begin with the Resolution Center, where you can start the filing process. You must be a member of PayPal in order to use the dispute center. There are several tips that PayPal offers for both sellers and buyers, both of which are different depending on which side you are on.

    For example, buyers have the option to dispute items that they have paid for, either not receiving the item or the item was not as described by the seller. They can also dispute charges that were not authorized.

    PayPal's resolution center can act as a mediator when a dispute is filed. They will actively try contact the person on the receiving end of the dispute.

    • An example is if a buyer has paid for an item, but never received it.
    • Numerous attempts have been made to the seller with no response. The buyer than contacts the site they are using (such as eBay) and then contacts PayPal for a dispute of charges.
    • PayPal also tries to contact the seller with no response. They then ask the buyer if they want to escalate the dispute.
    • The dispute is escalated, with PayPal usually refunding money to the buyer. In some cases, the seller is reported to business agencies, such as the Better Business Bureau and that of eBay. For eBay, that seller may be removed, as well as their store, from the auction site. The seller would also receive negative feedback, lowering their overall score.

    Handling PayPal disputes is not fun, but is made easier with the addition of PayPal's Resolution Center, as well as the support from the website in which the transaction was made.