Effective dispute management is critical to reducing costs.

Pre-dispute alert

Description

These alerts indicate potential chargebacks, giving merchants a 20-hour window to issue refunds and respond proactively.

Response

20 hours

Action

Issue refunds or provide evidence to contest the chargeback within the 20-hour window.

PayPal alerts apply only to external dispute cases when customers dispute charges through their bank or card issuer, rather than through PayPal's internal dispute system. Pre-escalation dispute (Inquiry)

Description

Customers can file disputes directly with PayPal. Unresolved disputes can escalate to formal claims.

Response

7 days (address issue)
10 days (respond)

Action

Contact the customer via chat in the admin panel. PayPal can view these interactions.

Internal claim

Description

PayPal encourages customers to contact merchants directly. However, resolved disputes may still lead to external chargebacks.

Response

10 days

Action

Engage with the customer through PayPal’s chat in the Solidgate Hub.

External chargeback

Description

This is initiated by the customer’s bank and requires a merchant response. For instance, Visa requires merchants to respond within 20 days for each stage of the chargeback process, with a tighter 10-day deadline for arbitration. Mastercard typically allows merchants 45 days to respond, although some specific requests may have shorter deadlines.

In addition, merchants can use pre-chargeback alerts, which serve as an early warning system for potential disputes. This allows merchants to address and potentially resolve issues before they escalate to formal chargebacks.

Response

20 to 45 days

Action

Provide proof of service delivery to contest the chargeback.

Claim

Description

If disputes escalate, merchants have 10 days to provide evidence against the claim. Issuing a refund at this stage can prevent further chargebacks.

Response

10 days

Action

Provide evidence against the claim or issue a refund.


Full refunds are:

  • allowed for internal disputes in stages OPEN and WAITING_FOR_SELLER_RESPONSE
  • prohibited for external chargebacks and internal disputes in the stages UNDER_REVIEW , WAITING_FOR_BUYER_RESPONSE , RESOLVED
General recommendations
  • Provide clear, detailed transaction information.
  • Keep detailed records of all related communications.
  • Supply tracking information and product details.
  • Respond to buyer inquiries promptly and ensure all communications remain polite.
  • Document previous disputes (up to 50 MB per request, individual files under 10 MB, formats JPG , JPEG , GIF , PNG , PDF ).
  • Be objective and factual in representations.
  • Prepare to provide additional information if escalated.
Dispute reasons and required evidence
  • MERCHANDISE_OR_SERVICE_NOT_RECEIVED Provide proof of fulfillment.
  • MERCHANDISE_OR_SERVICE_NOT_AS_DESCRIBED Offer item URLs, return policies, and other relevant details.
  • UNAUTHORIZED Supply proof of fulfillment.
  • CREDIT_NOT_PROCESSED Present proof of refund and communications.
  • DUPLICATE_TRANSACTION Show evidence for original and duplicate transactions.
  • INCORRECT_AMOUNT Provide documentation of the correct amount and refund IDs.
  • PAYMENT_BY_OTHER_MEANS Demonstrate proof of payment through alternative means.
  • CANCELED_RECURRING_BILLING Show evidence of subscription cancellation.

Here are some common reasons for refusing refunds:

Pre-dispute alert A pre-dispute alert gives merchants 20 hours to issue a refund or dispute a potential chargeback, avoiding additional costs and penalties using real-time events before the dispute starts. External chargeback An external chargeback occurs when the customer contacts their bank. PayPal may temporarily hold the disputed amount, and resolving it typically requires issuing a full refund, closing the case. Insufficient funds The merchant's PayPal account lacks the necessary funds for a refund. It needs to receive more incoming payments from other transactions, which increase the account balance to a level that can cover the pending refund amount. Suspicious activity PayPal may flag a refund request if it detects unusual or suspicious activity. In such situations, it is recommended to reach out to PayPal support to investigate the issue and ensure the refund request is handled appropriately.

For PayPal transactions, PayPal prevention alerts automatically refund disputed amounts and close disputes in favor of the customer without affecting your chargeback rate. These disputes still go through all stages WAITING_FOR_SELLER_RESPONSE and UNDER_REVIEW before being marked Resolved. You do not need to contest such cases, and the dispute page shows a message confirming no action is required.

Maintain detailed transaction records and ensure effective customer communication. Understand chargeback reason code and implement prevention strategies to minimize disputes and maintain a healthy chargeback ratio.


Dispute representment

Dispute handling is often overwhelming and time-consuming, requiring merchants to manually collect, prepare, and submit evidence for each case. To address this, auto representment submits documentation automatically to support dispute resolution.

If you have extensive evidence or the disputed amount is significant, manual representment lets you defend disputes by submitting detailed evidence yourself, either via API or through the Hub.

PayPal dispute representment is available for disputes with:

  • dispute_life_cycle_stage CHARGEBACK
  • status WAITING_FOR_SELLER_RESPONSE
Via API Get represented_by from the received PayPal dispute Webhook or PayPal disputes API report to catch which representment flow submitted the defense document.

No document submission is required when Solidgate notifies you that a dispute has been successfully prevented and confirms that no further action is needed.

Please note that the second appeal can be initiated by reaching out to support.

Auto representment

Full automated representment submits dispute evidence, reducing manual intervention. Evidence is generated using improved logic that enhances structure, formatting, and data enrichment to increase the effectiveness of dispute resolution.

The system collects comprehensive merchant information, including business details, business description, and a summary of terms and conditions. It also gathers dispute information, transaction data, anti-fraud checks, and fraud signals.

An internal framework enables fine-tuned optimizations based on factors like issuer or dispute reason code. This framework supports ongoing improvements to increase representment success rates.

To enable auto representment, contact us or reach out directly to your account manager.
Enrich evidence

While auto representment automates evidence generation and submission, some disputes require additional merchant-specific documentation such as delivery confirmations, receipts, application logs, or communication history.

Evidence enrichment allows merchants to supplement auto-generated evidence with their own files and annotations before submission.

Via Hub To enrich case data

  1. Go to APMs > Disputes.
  2. Select the dispute to go to the dispute details page.
  3. Click on Enrich case data to go to the representment case details page.
  4. In the top-right corner, click on the Provide enrichment button.
  5. In the appeared form
    • Select the data type and drag the file to upload.
    • Provide a short description of this evidence if needed.
    • Click on Save to confirm.
  6. Edit or Delete data type, or click on Save to confirm.
Evidence is auto-submitted on the deadline, or merchants can trigger early submission. Upon submission, the dispute status changes to UNDER_REVIEW .

Manual representment

Manual representment offers more control but requires careful preparation and timely submission.

Via API Use the file upload API request to load the evidence according to requirements for dispute documents.

Response includes a file_id and upload_url pre-signed URL.
Use the create dispute representment API request to initiate the dispute representment process, reference evidence_file_id. Via Hub To make a representment

  1. Go to APMs > Disputes.
  2. Select the dispute you need to go to the dispute details page.
  3. In the top-right corner, click on Provide evidence button.
    • In the appeared form, drag the file or click to upload.
  4. Click on Send to confirm.
Please ensure that all necessary evidence is included before submission to avoid delays in processing the representment.
The representment request is sent to PayPal for review, and the status updates to UNDER_REVIEW within approximately 10 minutes.
Requirements for dispute document preparation Example
  • All pages must be either portrait format only or landscape format only.
  • All pages should be A4 size. Other sizes are not acceptable.
  • Acceptable file format: PDF.
  • The file size should not exceed 10 MB.
 Compelling evidence: *Provide as much information as possible about the customer, including screenshots of agreements, customer documents, and proofs of product use.

DOTX Template for compelling evidence
Before submitting the file, ensure it is converted into a PDF format to maintain document integrity and compatibility. You can use various tools such as Microsoft Word’s Save As PDF feature or online converters for this purpose.