When is the dispute rate applied and how is it calculated?
A seller’s dispute rate is determined when a dispute is created. It’s based on the ratio of the total disputed amount of all claims for items buyers haven’t received or that are not as described that a seller receives, compared to the total amount of their net sales for the previous 3 calendar months.
A seller’s total claims include all claims relating to an item buyers haven’t received or is not as described that are filed either directly with and escalated to PayPal or with the buyer’s card issuer or bank. Total claims don’t include claims for unauthorized transactions or billing errors.
A seller’s dispute rate can change between the Standard and High Volume rates over time. The applicable dispute fee is based on the seller’s dispute rate when the case is created for any transaction dispute.
What’s the difference between the Standard Dispute Fee and High Volume Dispute Fee?
If a seller had more than 100 sales transactions in the previous 3 full months and their dispute rate over that time was 1.5% or more, they are charged the High Volume Dispute Fee for each dispute. Otherwise, the Standard Dispute Fee is charged for each dispute.
Sellers aren’t charged a Standard Dispute Fee only for cases that are:
- Resolved directly between the seller and buyer, and not escalated to a claim with
PayPal - Filed by the buyer directly with PayPal as an Unauthorized Transaction
- Eligible for PayPal’s Seller Protection program
- Claims with a transaction value less than twice the amount of the Standard Dispute
fee - Decided in the seller’s favor by PayPal or by the issuer
Sellers aren’t charged a High Volume Dispute fee only for cases that are:
- Resolved directly between the seller and buyer, and not escalated to a claim with PayPal.
- Filed by the buyer directly with PayPal as an Unauthorized Transaction
How are High Volume Dispute Fee sellers treated differently from other sellers?
High Volume Dispute Fee sellers are charged a higher fee for disputes filed by their customers than Standard dispute rate sellers in their market.
When the High Volume Dispute Fee is applied, the following may occur until your dispute rate reduces below 1.5%:
- You could lose your Seller Protection eligibility
- You may be required to respond to cases within 3 days (instead of the standard 10 day timeframe)
- You may be charged a dispute fee for all claims and chargebacks that are not amicably resolved, regardless of the dispute outcome
It’s important to note that the filing of a claim alone does not automatically trigger a dispute fee. There are no instant charges applied, and your seller feedback will not be automatically impacted.
However, if your dispute rate remains high or other performance indicators begin trending negatively, your account may be subject to review. In such cases, reserves or limitations could be placed on your account.
How does PayPal notify sellers of their dispute rate?
PayPal periodically notifies sellers of their Dispute rate. This may include emails to the seller’s account email address, merchant reports, and in the Resolution Center.
Where can I see the dispute rate for my PayPal account?
You’ll find your Dispute Rate and Dispute Fee Tier in the Resolution Center.
Where can I see the fee amount charged to my account and my case?
You can view the fee amount in the dispute details on your Case Details Page.
Does PayPal notify High Volume Dispute Fee sellers before implementing the Dispute Fee?
Sellers in the High Volume Dispute Fee tier are given a 90-day grace period after User Agreement changes related to the Dispute Fee become effective for their region. During this time, they can reduce their dispute rate to avoid being charged higher fees associated with their claims.
Are fees reimbursed if the seller appeals and wins a case?
If a seller appeals and wins the case, the disputed amount and the Standard Dispute Fee are reimbursed.
However, the High Volume Dispute Fee, if applicable, isn’t reimbursed because it doesn’t depend on the case outcome.
Does the dispute fee impact Chargeback fees for unbranded (DCC) PayPal transactions?
Disputes for unbranded transactions aren’t charged a dispute fee, but according to existing chargeback fee policies and Seller Protection eligibility, they will continue to be charged the Chargeback fee.