PayPal dispute, claim and chargeback: what is the difference?

1. A dispute is opened by the buyer in the Resolution Center. It lets you and the buyer talk, and PayPal closes it after 20 days unless it is escalated.
2. A claim is an escalated dispute. PayPal's pages say escalating it asks PayPal to investigate and decide the outcome.
3. A chargeback is the buyer going to their card issuer. PayPal's user agreement says the card issuer, not PayPal, decides whether the buyer succeeds, and PayPal charges a fee for receiving a chargeback claim.
4. A reversal is PayPal taking the payment back from your account, for example after a Buyer Protection claim or a chargeback. The UK user agreement says you then owe the full amount and PayPal's losses, including any fee.
5. A buyer cannot run a PayPal claim and a card chargeback for the same payment at once. PayPal closes its claim if they do.

Source: PayPal's Buyer Protection Program (UK page); PayPal's Purchase Protection program (US page); PayPal User Agreement (UK); PayPal UK Help Centre: respond to Item Not Received and Significantly Not As Described disputes; PayPal Help: respond to Item Not Received and Significantly Not As Described disputes, read 4 October 2026.

1. Find out which one you have. A dispute or claim appears in your PayPal Resolution Center and by PayPal email. A chargeback is described by PayPal as a process with the card issuer.
2. Dispute: reply in the Resolution Center, keep it polite and attach tracking or refund proof.
3. Claim: answer PayPal's requests for documents on time. PayPal decides, and its US help says you can appeal within 10 days of closure if you responded.
4. Chargeback: read the notice you were given, and follow the due date on it. Which screen it appears on may depend on how the buyer paid. We did not confirm how Shopify displays it.
5. Reversal: read PayPal's email and your account activity to see what it was for, and respond to anything PayPal requests.

The evidence depends on which of the four you have. The common thread across PayPal's pages is carrier proof, refund proof and messages.

• For a dispute or claim about delivery: the tracking and delivery documents described on the item not received page
• For a dispute or claim about the item: your listing as it was shown, and your messages with the buyer
• For an unauthorised claim: the Transaction Details page and your proof of shipment, as on the unauthorised transaction page
• For a card chargeback: use the evidence list for the reason shown on your own notice
• In every case: dated messages with the buyer and any refund record

What PayPal's pages say about each term

• Dispute: opened in the Resolution Center within the buyer's time limit. For Item Not Received that is 180 days from payment; for Significantly Not As Described, 30 days from delivery or 180 days from payment, whichever is sooner. PayPal places a hold on the funds in your account until it closes.
• Claim: PayPal's pages say the buyer, you or PayPal can escalate a dispute within 20 days of opening it, and PayPal then decides in its sole discretion, based on the Buyer Protection or Seller Protection terms.
• Chargeback: PayPal's Buyer Protection page says chargeback rights can be broader than PayPal's own, so a card-paying buyer may choose it. PayPal's user agreement says it charges a fee for receiving a chargeback claim. We did not read the Chargeback Guide it mentions.
• Fees, per the UK user agreement: a Dispute fee applies when the buyer pursues a claim with PayPal, a chargeback with their card issuer or a bank reversal, with a Standard or High Volume rate. It is not charged for an inquiry that is not escalated, one resolved directly with the buyer, or a claim decided in your favour. The High Volume fee applies at a Dispute Ratio of 1.5% or more with over 100 sales in the previous three months. For payments not made through a PayPal account there is a separate Chargeback fee. The amounts are in tables we did not read.
• Reversal: the UK user agreement lists reasons, including PayPal reimbursing the buyer for a Buyer Protection claim, compensating the buyer's bank, or you failing to respond to PayPal's questions about claims or chargebacks in time.
• Seller Protection: its pages say it can apply when a card payment is reversed because the buyer says they did not authorise it, and cannot apply to an Item Not Received claim the buyer files with their card issuer.

Plain words: The issuer is the bank that issued the customer's card.

Plain text. Replace every [bracket] with a fact from your records and delete any line you cannot back with a file.

Hello [buyer name],

Thank you for opening this. I want to sort it out for order [order number], placed on [date] for [amount].

What we have: [one or two facts you can show, for example shipped on date, tracking number, delivered on date] (attached: [file name]).
What I can do: [the offer you are actually willing to make, or delete this line].

If this resolves it, please close the dispute in your Resolution Center. If not, tell me what is still wrong and I will reply within [time].

[Name], [store name]

Never state anything you cannot prove. Every sentence in the response should point to a file you can attach. Delete any line you have no file for.

• Treating all four as the same case. A dispute is a conversation, a claim is PayPal's decision, a chargeback is the card issuer's decision.
• Letting the 20 days run out. PayPal says a dispute not escalated closes automatically, but either side can escalate before that.
• Ignoring PayPal's requests during a claim. The UK user agreement lists a failure to respond in time as a reason for a reversal.
• Assuming Shopify's chargeback page covers PayPal disputes. Shopify's help says disputes from third-party payment providers such as PayPal Express Checkout might follow different processes and timelines.
• Refunding in a way PayPal does not see. PayPal's UK user agreement says a claim is fully resolved only if the refund goes through PayPal or you show accepted evidence of the buyer's agreement.

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

PayPal's pages say a dispute lets you and the buyer communicate, and escalating it to a claim asks PayPal to investigate and decide the outcome.

What is a PayPal chargeback?

PayPal's user agreement describes it as the payer pursuing a chargeback with their card issuer. The card issuer, not PayPal, determines whether the payer is successful. PayPal charges you a fee for receiving a chargeback claim.

Can a buyer do both?

No. PayPal's Buyer Protection page says that if a buyer pursues a claim with PayPal and with the card issuer for the same transaction, PayPal closes its claim. If PayPal decides against the buyer first, they can still go to the card issuer later.

What is a reversal?

PayPal's user agreement says a reversal happens when PayPal takes back a payment from your account, for example after it reimburses the buyer for a Buyer Protection claim. You then owe the amount and any fee.

Which one does Seller Protection cover?

It can apply to an unauthorised transaction claim and an Item Not Received claim, and to a card payment reversed because the buyer says they did not authorise it. It does not cover Significantly Not As Described claims or an Item Not Received claim filed with the card issuer.

• A buyer opened a PayPal dispute. How do I respond?
• A buyer opened a PayPal 'item not received' dispute. What do I send?
• A buyer opened a PayPal 'significantly not as described' dispute. What counts?
• A PayPal payment was reported as unauthorised. Does Seller Protection cover me?

• A customer disputed a Shop Pay Installments order. Who handles it?
• A customer opened a Klarna dispute. How do I respond?
• They filed a chargeback after I refunded them. What do I send?
• A Stripe dispute on my Shopify store: where do I submit evidence?

We could not confirm how a PayPal-funded dispute is displayed inside the Shopify admin. We did not read PayPal's fee tables, its Chargeback Guide or pages for other countries. Rules and deadlines can change, so use the due date and form on your own dispute.

The Chargeback Evidence Checklist, or its ready text to paste into ChatGPT, asks for your dispute reason and lists the proof to gather. Or pick the reason on the chargebacks page.

The kit now has six fill-in response letters for Word or Google Docs (one per reason), evidence checklists, worked examples and a one-page Start-here guide, plus an optional ready text for ChatGPT or a similar assistant that fills the letter in for you. The Chargeback Response Kit and the free Chargeback Evidence Checklist are written around Shopify's chargeback reason names: Fraudulent, Unrecognized, Product not received, Product unacceptable, Subscription canceled, Duplicate, Credit not processed and General. The Writer's README says it also handles inquiries, Shopify Protect orders and orders that were already refunded. Its response structure carries over to other payment methods, because the questions a bank asks are similar. Where and how you submit differs, and we have not tested the skill against the PayPal Resolution Center or a card chargeback. Check the form's own limits before you paste anything in. What carries over to PayPal, Stripe and other processors: the way the response is built (what happened, evidence as numbered exhibits, the policy quoted word for word, dated contact with the customer, nothing you cannot back with a file) and the evidence ideas for each kind of claim. The fill-in letters follow Shopify's reason names, so for another processor pick the letter for the closest reason and use it to organise your facts. What does not: the reason names, the deadlines, the evidence field names and where you submit, which belong to each processor, so check them against that processor's own page above.

Before: a merchant sent delivery photos against a fraud dispute and lost.
After: a verdict (weak, fight only if cheap), what the bank actually asks, and what to gather instead.

It is also one of the six helpers in the Store Ops Pack, $29.

Send the dispute reason, the amount, the due date and the evidence you hold, with no card or customer data. We reply with what looks strong, what is missing and whether accepting may cost less. Free, no call, no sign-up. We cannot promise a day, and nobody can promise how a bank or payment provider will decide.

Kai Ventura, Pro Skill Packs

General information from the public sources above and our own checklists. It is not legal advice, and no response can promise how a bank or payment provider will decide. Pro Skill Packs is not affiliated with, endorsed by or sponsored by Shopify Inc., Affirm, Klarna, PayPal or Stripe. All chargeback pages.