FAQ On Winning PayPal Disputes - 2024 Shopify Tips

Common questions about receiving PayPal Disputes, claims, Chargebacks, and Bank Reversal.

FAQ On Winning PayPal Disputes - 2024 Shopify Tips
FAQ On Winning PayPal Disputes - 2022 Shopify Tips

We have been discussing our previous topics about how to have a good PayPal Tracking record and how we can protect our account to fully conduct our business operations with peace of mind and with confidence.

This time we will straightforwardly address Frequently Asked Questions by Merchants and Sellers about filing and preventing disputes.

Let's start by refreshing our thoughts On How Disputes Really Work?

PayPal will send an official email notification to your email about the disputes filed by your buyers.
Buyer's and Seller's Exchange Responses
Providing Resolutions on the Matter

Before we will jump on the common questions about receiving PayPal Disputes, claims, Chargebacks, and Bank Reversal. We will revisit terms that would help us understand why we need to emphasize resolving PayPal Concerns as Merchants.

For e-commerce merchants who rely on PayPal as their primary payment gateway account, a suspension could be a nightmare.

It is within our knowledge that you will be in a major problem if your account is suspended, this literally means that you can't make any money, and added to your headache of not making money is that PayPal's user agreement doesn't allow you to open a new account while your previous one is still suspended.

Lets Start...

Question: Why does PayPal Hold Payment?

  1. You are Newbie or You are new to selling.
  2. You haven't sold anything in a while.
  3. You received various refund, dispute, or chargeback requests.
  4. Your selling activity appears to have changed. Sudden Increase of Remittances
  5. You're selling items that are considered to be of higher risk. This can include items such as tickets, gift cards, consumer electronics, computers, and travel packages.

Question: How To Avoid PayPal Holding Your Funds?

  1. Activate Your Paypal Seller Protection Policy.
  2. Create a Clear Shipping and Privacy Policy
  3. Activate PayPal Customer Service Message
  4. Create a Stellar Customer Support
  5. Create proper documentation ( Tracking information, Proof of Shipment)

Question : How long does PayPal Hold My Funds?

PayPal holding time frame may be reached 21 days or longer, however, if you have proper shipping documentation and you abide by PayPal User's Agreement the holding factor may reduce the timeline.

Question: How do I release my money from PayPal?

  1. Print USPS or UPS Shipping Label
  2. Add tracking information
  3. Use PayPal Carriers
  4. Review PayPal Notification Email
  5. Provide documents requested by PayPal

Question: What is PayPal Seller Protection Policy?

The PayPal Seller Protection is designed to cover you for the entire amount of any unauthorized payments, disputed items not received, chargebacks, or reversals.

Question: What type of complaints/disputes/chargebacks does PayPal have?

  1. Item Not Received when your customers pay for an item and claim that they have not received the package. Fraudsters may assert that an order wasn't received and then file a dispute with PayPal or their credit card company.
  2. Unauthorized transactions customers think and believe that their PayPal account(s) have been used without her permission. Customers have 60 days after the transaction first showed on their bill to report it to PayPal.

Question: How Would I know a dispute file against me?

Answer: You will be notified via email that your customer(s) raised a dispute about the particular order transaction.

Question: How Will I Respond to the Disputes?


  • Log in to the PayPal Resolution Center.
  • Under Action, Click “View” next to your case
  • Respond to the buyer by entering available resolutions
  • Hit Send

Question: How can I communicate To Buyer About The Dispute Filed?

Answer: Be ready with the required documents such as proof of shipment, Delivery Address, Tracking Information, and other documents required by PayPal to validate the disputes.

  • Sign in to Paypal Resolution
  • Click view under the action

Question: How to Prevent Disputes?


  1. Communicate To Your Buyers Quickly. Be sure to include accurate descriptions and pictures of items from multiple angles
  2. When Purchased is Made. Make sure you ship the item promptly with good packaging. Provide your buyers a Traceable Tracking Information.
  3. It is important to post customer service contact information, including working hours and response time frames. This allows customers to know when they can expect a response to their inquiry.
  4. Be clear of your Refund Policy and Shipping Terms.
  5. When customers contact you, be proactive in your response, helpful, and quick to resolve minor issues.
  6. Set up a PayPal Customer Service Message under the Resolution Center.

If you're ever in a situation where you are receiving disputes and your PayPal balance isn't available or suspended, best you apply prevention and remedy in dealing with your PayPal. Integrating a plug-in to automate the process of submitting tracking information to your PayPal account to cover you from disputes, claims, chargebacks, and Bank Reversal.

Protect your store backend process by using an automated Shopify Paypal tracking solution such as Paltrack to prevent you from potential delays and being able to release your funds faster than scheduled at 21days or longer. Check Paltrack directly from Shopify Store: https://apps.shopify.com/paltrack

Let us know your thoughts.  Have you had any issues with your funds being pending by PayPal? Are you receiving a volume of disputes?