What is Chargeback Protection?

Chargeback Protection is an opt-in risk tool that helps eligible merchants reduce the risk of fraudulent debit or credit card transactions. We’ll help protect your transactions from “unauthorized” or “item not received” chargebacks. Once you submit the information we need, we’ll waive the chargeback fee and remove the hold on the dispute amount. Read the Terms and Conditions for Chargeback Protection.

This feature is only available for business accounts with Advanced Debit and Credit Card checkout.

Which merchants are eligible for Chargeback Protection and Effortless Chargeback Protection?

To be eligible, a merchant must have a PayPal business account and have enabled Advanced Debit and Credit Card checkout.

How can a merchant apply for Chargeback Protection and Effortless Chargeback Protection?

Merchants can apply for Chargeback Protection from within their PayPal account. Simply click on 'Manage Risk and Fraud' in the Payment Preferences section within Account Settings and select Chargeback Protection. Terms apply.

How does Chargeback Protection work?

We’ll help make risk decisions on all your Advanced Debit and Credit Card transactions and decline potentially fraudulent payments. If an approved purchase is later identified as fraudulent, it will be chargeback-protected once the information we need is submitted, up to the loss cap **.

1. We’ll monitor Advanced Debit and Credit Card checkout transactions
2. We’ll review those transactions for risk of fraud
3. We’ll waive PayPal’s chargeback fees and not debit the disputed amount, up to a loss cap **, if an eligible purchase is later found to be “unauthorized” or “item not received”. However, Merchants need to respond to the case with the information we need within the requested timeframe.

How Does Effortless Chargeback Protection Work?

We’ll help make risk decisions on all your Advanced Credit and Debit Card transactions and decline potentially fraudulent payments. If an approved purchase is later identified as fraudulent, it will be chargeback-protected, up to a loss cap**, once the information we need is submitted.

1. We’ll monitor Advanced Debit and Credit Card checkout transactions.
2. We’ll review those transactions for risk of fraud.
3. If any eligible purchase is later found to be “unauthorized,” we’ll waive PayPal’s chargeback fees and not debit the disputed amount.
4. If an eligible payment is disputed as “item not received,” the merchant must respond to the case with the information we need within the requested timeframe. Then, we’ll waive our chargeback fees and not debit the disputed amount.

How does a merchant end Chargeback Protection or Effortless Chargeback Protection?

You can end Chargeback Protection anytime with no cancellation fee. Merchants simply need to click on Manage Risk and Fraud in the Payment Preferences section within Account Settings and select No protections right now.

How much does Chargeback Protection cost?

*Fees are subject to change.

What info must a merchant provide in connection with an eligible chargeback dispute?

If a chargeback occurs, merchants must submit proof of shipment /delivery as requested by the Resolution Center to qualify for Chargeback Protection or Effortless Chargeback Protection.

What types of transactions are eligible for Chargeback Protection or Effortless Chargeback Protection?

Chargeback Protection and Effortless Chargeback Protection are available for PayPal Commerce Platforms Advanced Debit and Credit Cards (ACDC) checkout. Exclusions apply.

What types of chargebacks are eligible under Chargeback Protection and Effortless Chargeback Protection?  

Both are only offered for “unauthorized” and “item not received” chargebacks. You must still respond to these chargeback disputes in the PayPal Resolution Center to get the benefits of Chargeback Protection.

What types of chargebacks are not eligible under Chargeback Protection and Effortless Chargeback Protection?

All chargebacks other than “unauthorized” and “item not received”, such as “broken item”, “significantly not as described,” “refund not processed”, and “duplicate charge”, are not eligible for Chargeback Protection. You’re expected to respond as usual to these chargeback disputes in the PayPal Resolution Center.

What are the differences between Chargeback Protection, Effortless Chargeback Protection, and Fraud Protection?

* When you sign up for Chargeback Protection or Effortless Chargeback Protection, we’ll automatically disable Fraud Protection on your account. You’ll no longer have access to the Fraud Protection dashboard if you are enrolled in either.

** PayPal will cover eligible chargebacks up to a monthly loss cap rate, which is contractually agreed upon in advance. Generally, the higher the volume processed through Chargeback Protection, the higher the Monthly Loss Cap Rate is. When a dispute is created and protected by either protection, the amount will count toward the Loss Cap Rate for the calendar month. Merchants can track their proximity to their Loss Cap Rate via the Chargeback Protection Dashboard.