PayPal announced an important change in the way the disputes in transactions for the sale of goods and services. The company will in fact begin to apply a fee to be paid by the seller for operations that will receive a dispute converted into a complaint.
PayPal dispute fee: what it is and when it applies
The innovation introduced by PayPal with the updating of the terms and conditions that will come into force on December 16, 2020 it is substantial and provides that sellers pay a fee if buyers open a dispute and convert it to a complaint.
Within the PayPal mechanisms it is in fact possible for a buyer to open a dispute on a carried out operation, for example because the good received does not correspond to that advertised by the seller. In this case it is possible for both the seller and the buyer to resolve the matter between them, or for one of the two to decide to refer to the superior authority of PayPal for it to make a decision on the matter. For this to happen, the initial dispute must be converted into a complaint.
Until now this process was free and an integral part of the services offered by PayPal. However, the company has decided to start applying a fee for these cases, effectively transferring the weight of the process onto the shoulders of the sellers.
The new rates for disputes are different than the Chargeback fees already present and which provided that, in the event that the buyer had their bank or credit card company intervene to recover the amount charged, PayPal would charge a sum to the seller. Dispute fees will apply, however, whenever a user converts a dispute into a complaint.
There are two types: the standard dispute rate and the fee for high volume disputes. The difference lies in the amount of complaints received: whether the seller has made more than 100 transactions in the previous three months and the relationship between disputes and sales is more than 1.5% High volume dispute rates apply. In this case, PayPal may take additional measures, such as asking the seller for explanations and placing limits or blocks on the account.
PayPal writes that “The complaints listed above may not be subject to the standard dispute rate or the high volume dispute rate, but the complaint may still be included in the overall dispute ratio calculation”. This seems to suggest that in some cases the company may not charge the seller anything, but it is not clear why and with what criteria given that no further explanation is provided in the new contract.
There are exemptions: when disputes are not converted into complaints, when they are resolved directly between buyer and seller, when they are presented for unauthorized transactions, when they are eligible for PayPal sales protection and when they relate to transactions with a value less than double the amount of the tariff itself.
How much is the PayPal dispute fee
PayPal provides a fixed fee for disputes prior to the amount object of the dispute. The figure is equal to 14 euro and it remains so even for disputes for high volumes. There does not seem to be a percentage form, so as to decrease the burden placed on the sellers.
This fee will be charged when the claim is closed in favor of the buyer. It should be noted that historically PayPal tends to take the buyer’s own side, even when he is not right, which is why many sellers try to resolve disputes outside of PayPal’s mechanisms.
The imposition of a further increase will not be well received by many sellers, whose mood had already been proven by the announcement in 2019 that the PayPal fees applied to the sellers would still be received even in the event of a canceled transaction with consequent refund obtained from the ‘buyer.
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