10 Jun 2023

Effectively Handling PayPal Disputes with PaySync - A Comprehensive PayPal Guide 2023

With the number of PayPal users projected to reach 223.3 million in 2023, a 6.7% annual increase from 2022, it's evident that PayPal has become a preferred payment platform worldwide. As eCommerce continues to grow, businesses must be prepared to manage inevitable disputes that can arise during transactions.

Disputes can be frustrating and time-consuming, potentially impacting customer satisfaction and online reputation. Therefore, it is crucial to understand the nature of PayPal disputes, their causes, effective resolution strategies, and prevention methods.

In this comprehensive guide, we will explore these aspects and introduce PaySync, an innovative app designed to help businesses streamline dispute management and enhance their seller protection on PayPal.

Understanding PayPal Disputes

What is a Dispute?

A dispute is an inquiry filed by a buyer via PayPal when they encounter a problem with a transaction. At this stage, the issue is directly between the buyer and seller, with PayPal yet to intervene.

Understanding the Reasons Behind Disputes

Disputes can arise due to various factors, such as:

  • When Items Don't Arrive The buyer has made a payment for an item but claims to have not received the product.
  • Mismatched Descriptions and Expectations The buyer gets the item but finds that it significantly differs from the seller's description, or it was damaged during shipping.
  • Unravelling Billing Errors The buyer encounters a problem with the transaction process, like being charged an incorrect amount or experiencing duplicate charges.

Dispute vs. Claim: Understanding the Key Differences

A buyer can initiate a dispute in their Resolution Center if their order fails to arrive or is not as described. It is crucial to understand the differences between a dispute and a claim in order to navigate the resolution process effectively.

Dispute: An Opportunity for Buyer-Seller Communication
In a dispute, the buyer and seller have 20 days to exchange messages in the Resolution Center to resolve the issue. The buyer may request a refund, ask the seller to resend the item, or arrange a return. During a dispute, PayPal does not intervene or determine the outcome.

Claim: Involving PayPal in the Resolution Process
To involve PayPal in the investigation and decision-making process, the dispute must be escalated to a claim within 20 days. Either the buyer or seller can escalate the dispute to a claim.

Claim Resolution Timeline
The duration it takes for PayPal to decide the outcome of a claim varies, depending on the need for additional information and the responsiveness of both parties to inquiries. Generally, decisions are reached within 14 days, but some cases may take 30 days or more.

Responding to a Dispute: A Step-by-Step Guide

Knowing how to respond to a dispute efficiently is crucial for maintaining good relationships with your buyers and resolving issues. Follow these steps to address a dispute:

Step 1: Receive Notification and Log In
Upon receiving an email notification about a dispute, the transaction funds will be temporarily held. Log in to your PayPal account and click on Open Cases in the Resolution Center.

Step 2: Locate Your Case
To review the case, click on the Response Required tab.

Step 3: Engage with Your Buyer
Promptly respond to your buyer before they escalate the dispute to a claim. Offer an explanation of the situation and suggest potential resolutions.

Timeliness in Responding to Disputes

The speed at which you respond to a dispute can significantly influence the outcome and customer relationship. Here's what you need to know:

Act Promptly to Prevent Escalation

To prevent a dispute from escalating into a claim, it is recommended to respond to the buyer as soon as possible. If a response is delayed, buyers are prone to escalate the dispute to a claim, typically after about 4 days.

The 20-Day Escalation Window

Take note that a dispute can be escalated into a claim within 20 days* from when it was filed with PayPal.

Escalation and Resolution Process

If a resolution isn't reached within 20 days, either party can escalate the dispute to a claim, allowing PayPal to intervene and investigate the case. However, if the dispute isn't escalated within this period, it automatically closes on the 21st day, and the withheld payment is released to the seller.

Once closed, a dispute cannot be reopened or further investigated. For more detailed instructions on how to respond to a PayPal dispute, visit our Help Center.

Proactive Steps to Prevent Disputes

Preventing disputes begins with effective communication and proactive seller actions. Here are some steps to significantly reduce the chances of disputes:

Provide Comprehensive Product Details
Ensure that you provide detailed and accurate descriptions of items, and include clear photos from various angles to help the buyer understand what they are purchasing.

Emphasise Prompt Shipping and Detailed Tracking Information
Shipping items promptly and providing tracking information is crucial. The importance of this cannot be overstated. Not only does it reassure the buyer that their purchase is on the way, but it also protects you as a seller by providing evidence of shipment. Regularly updating this information on PayPal can help avoid misunderstandings or disputes related to item delivery.

Make Customer Service Easily Accessible
Post your customer service contact information, including working hours, response time frames, and accessible methods of contact such as a toll-free phone number and email address.

Offer Clear Refund or Exchange Policies
Having a clear refund or exchange policy and offering refunds when necessary can help build trust with buyers and potentially prevent disputes.

Professionalism and Courtesy in Communication
Ensure professionalism, helpfulness, and courtesy when a buyer contacts you. This can go a long way in resolving issues before they escalate into disputes.

Utilise Customer Service Messages
Use Customer Service Messages to provide contact details or to notify buyers about shipping delays. When buyers are informed about an issue with their purchase and can easily contact you, they are less likely to file a dispute or claim.

Leveraging PaySync for Dispute Prevention and Management

Efficient tracking information management plays a crucial role in preventing disputes and enhancing customer satisfaction. PaySync an application available on the Shopify app store, offers an automated solution to this requirement, thereby allowing you to focus on growing your business.

Seamless Tracking Sync to PayPal
PaySync is designed to automatically sync tracking numbers of dispatched orders to PayPal in real-time. This eliminates the need for manual input, thereby reducing both time consumption and the risk of human error.

Swift Fund Release
With PaySync's automated system, you can expect your funds to be released within 24 hours of delivery. By promptly adding tracking information to PayPal, you also get the benefit of expedited fund release, which is up to 10 times faster.

Dispute Prevention
PaySync can significantly reduce the likelihood of disputes arising from delivery concerns. When buyers can see real-time tracking information synced directly to PayPal, it instils confidence in your delivery process and reduces any anxieties regarding the item's location or delivery status.

Enhanced Seller Protection
In addition to dispute prevention, it can fortify your position in case of disputes. The app aids in bolstering your Seller Protection and Chargeback Protection by providing accurate, timely tracking information. This evidence can be invaluable if a dispute is escalated into a claim.

User-Friendly and Easy Setup
Designed to be user-friendly and easy to set up, making it an excellent tool for both seasoned sellers and those new to the online marketplace. It's an investment that can save time, prevent disputes, and protect your business.


In conclusion, effectively addressing and preventing disputes is essential for maintaining strong customer relationships and ensuring a seamless e-commerce experience. By understanding the differences between disputes and claims, responding promptly to any issues, and proactively taking steps to prevent disputes, sellers can create a trustworthy environment for buyers.

Utilising tools like PaySync can greatly contribute to this trust-building process. PaySync automates the tracking information syncing process, making it easier for sellers to provide accurate shipping updates and enhance their Seller Protection. This not only helps prevent disputes but also strengthens the seller's position in case a dispute arises.

By prioritising clear communication, transparency, and efficient dispute resolution, sellers can foster a positive shopping experience for their customers, which ultimately leads to business growth and customer loyalty. Remember, a successful e-commerce business thrives on strong relationships and trust between buyers and sellers.


What is the difference between a PayPal dispute and a claim?

A dispute is a situation where a buyer and seller communicate directly to resolve an issue, without PayPal’s intervention. On the other hand, a claim is when a dispute is escalated, and PayPal steps in to investigate and decide the outcome.

How long does a buyer have to escalate a dispute to a claim with PayPal?

A buyer has 20 days from the date the dispute is filed to escalate it to a claim. If the dispute is not escalated within this period, it is automatically closed on the 21st day.

How quickly should I respond to a dispute?

It is recommended to respond as soon as possible, ideally within a few days. If a seller does not respond promptly, a buyer may escalate the dispute to a claim, typically after about 4 days.

What can I do to prevent disputes?

To prevent disputes, ensure clear communication with buyers, provide detailed and accurate product descriptions, ship items promptly with tracking information, offer clear refund or exchange policies, and maintain professionalism in all communications. Automated tools like PaySync can also help by automatically syncing tracking information with PayPal.

How does PaySync help in preventing disputes and managing them?

PaySync automatically syncs tracking numbers of dispatched orders to PayPal in real-time, thereby reducing the likelihood of disputes related to delivery concerns. In case of disputes, PaySync aids in bolstering your Seller Protection and Chargeback Protection by providing accurate, timely tracking information.

PaySync is designed to sync tracking numbers to your PayPal & Stripe accounts in real time. Our aim is to accelerate fund release, bypass holds/disputes, and build PayPal trust. Enjoy the simplicity of one-click syncing, enhancing your merchant reputation effortlessly.