Also known as ‘chargebacks,’ payment disputes are a common irritation for many online retailers, including eBay sellers. In this post, find out everything you need to know about payment disputes on eBay, including how to handle, challenge and resolve them.
What is a payment dispute?
A payment dispute occurs when a buyer indicates an issue with a transaction and asks their payment institution, such as a credit card provider (Mastercard, Visa, American Express) or payment system (such as PayPal) to reverse it.
The payment institution then reviews the issue and will decide if the reversal request is valid. If payment institution sides with the buyer, the transaction will be reversed. The buyer will receive a refund in the same form as their original purchase.
When a buyer files a payment dispute, the seller is charged a dispute fee by eBay. This fee is currently $20.00 (before sales tax) but may be waived or refunded if the seller is eligible for payment dispute seller protections.
It is important to note that the payment dispute process is entirely separate to eBay’s own resolution system and Money Back Guarantee, when the buyer and seller (and eBay, when necessary) work together to resolve a transaction problem.
Buyers are not allowed to use more than one method to receive a refund – if a Money Back Guarantee case is already ongoing and the buyer proceeds with a payment dispute for the same transaction, the Money Back Guarantee case will be closed.
Common payment dispute scenarios
Chargebacks happen for a number of different reasons. Some of the most common scenarios are:
- The buyer does not recognize or remember the transaction
- The delivered item does not match the product description
- The buyer was charged more than once for the same purchase
- The item did not arrive
- The buyer changed their mind
- The item was damaged upon delivery
A payment dispute may also happen when the buyer has been a victim of fraud i.e. stolen or cloned credit card, identity theft.
Depending on the payment institution , the buyer has 45-180 days to request a payment dispute.
How to respond to a payment dispute
With the recent move to managed payments on eBay.com, the process for dealing with payment disputes now involves eBay directly.
- The first step is a notification from eBay, advising the seller of a payment dispute made by a buyer
- The seller is given 5 calendar days to respond after receiving the notification, with the option to either challenge or accept the payment dispute.
- If the seller accepts the payment dispute, eBay will usually remove funds from the seller and refund the buyer
- In cases in which the buyer claims that the item does not match the listing, eBay will try and recover the item for the seller.
Occasionally, eBay will challenge the payment dispute on the seller’s behalf, with no fee.
To accept a payment dispute:
- Select View details next to the order in My eBay Sold or navigate to the Requests and disputes tab in Seller Hub
- Select Accept dispute and buyer receives refund and then Continue
It is also possible to select Respond to case from the dispute notification.
How to challenge a payment dispute
The payment institution makes the final decision on the validity of the payment dispute.
Sellers who choose to challenge a payment dispute must provide supporting evidence to prove that they did fulfill the transaction as anticipated. The type of evidence required depends on the reason for the payment dispute.
If the seller is found to be at fault, they must refund the buyer.
To challenge a payment dispute:
- Select View details next to the order in My eBay Sold or navigate to the Requests and disputes tab in Seller Hub
- Select Challenge dispute and provide proof and select Continue
- Verify or edit the information, or upload new evidence
- Select Submit
It is also possible to select Respond to case from the dispute notification.
Recommended evidence when a buyer claims the item was not delivered or does not recognize the transaction
| Physical items, shipped by mail | Tracking confirmation showing that the item was delivered successfully to the correct address For transactions with an order total of $750 or more, a signature confirmation |
| Physical items collected by in-store pickup | Valid buyer identification including customer’s signature on the pickup form or packing slip |
| Physical items collected by local pickup | A copy of the eBay order details with buyer signature or eBay app pickup confirmation (QR code or 6 digit code) |
| Shipped vehicles | Proof of delivery or shipping confirmation |
| Picked up vehicles | Receipt with item details, with buyer signature |
| Digital items | Proof that the item was provided, used, delivered or accessed |
Recommended evidence when a buyer claims the item does not match the listing or was damaged
| Any item (physical or digital) | Photographs showing the condition of the item prior to shipment |
Recommended evidence when a buyer claims that they did not receive a refund
| Any item (physical or digital) | Proof of a refund or cancellation already processed via eBay Messages with the buyer showing that a refund is not necessary |
Resolving a payment dispute
eBay will submit the evidence to the payment institution on the seller’s behalf. In some situations, eBay will provide evidence of its own as well.
It can take up to 90 days for the payment institution to make a decision on a payment dispute. They may also may reopen a closed dispute.
To find out the status of a payment dispute, find the order in My eBay Sold or go to the Requests and disputes tab in Seller Hub.
Do you have any experience with payment disputes on eBay? Share your story in the comments below.
