PayPal Disputes Glossary

This glossary defines the terminology you will encounter when working with PayPal disputes in the Segpay Merchant Portal, in your dispute reports, and in the Segpay Reporting Service (SRS).

Dispute types & related terms

Dispute: The general term for any situation where a consumer challenges a transaction. A dispute initiates a structured resolution process between the consumer and the merchant. Not all disputes become claims or chargebacks. Many are resolved early through direct communication.
Dispute type: Classifies the dispute as internal (filed through PayPal's Resolution Center), external (filed through the consumer's bank or card issuer), or an alert (a notification of a potential dispute that may resolve on its own).
Internal dispute: A dispute filed and managed within PayPal's Resolution Center. PayPal facilitates direct communication between the consumer and the merchant, and may step in to adjudicate if the dispute escalates to a claim. PayPal holds the disputed payment during this process.
External dispute: A dispute that originates outside PayPal, typically when a consumer contacts their bank or card issuer directly to dispute a charge. The card issuer manages the outcome. External disputes most commonly result in a chargeback.
Claim: When a dispute cannot be resolved directly within the 20-day inquiry window, either party may escalate it to a claim. PayPal then reviews evidence from both sides and makes a binding decision.
Chargeback: A chargeback occurs when a consumer contacts their bank or card issuer, not PayPal, to reverse a payment. The card issuer withdraws the funds and refunds the consumer directly. A chargeback fee is typically applied in addition to the loss of the transaction amount.
CB reversal (chargeback reversal): A transaction type that appears in your reports when an external PayPal chargeback dispute is resolved in your favor. The original transaction was valid and the disputed funds are returned to your merchant account as a positive entry. A processing fee is deducted from the returned funds. CB reversals do not reactivate any suspended subscriptions or member access, and the consumer's information remains blacklisted in the Segpay system. For details, see the PayPal Integration Guide.
ACH return (bank reversal): A type of external dispute where the consumer's bank requests that PayPal reverse a payment funded by ACH (bank transfer). Similar to a chargeback but specific to bank-funded transactions.
Pre-chargeback alert: An early notification that a consumer has initiated a dispute that may result in a chargeback. An alert may resolve on its own without becoming a dispute. You have a 20-hour window to refund an unfulfilled order and avoid the chargeback and its associated fee. If you already fulfilled the order, you can submit evidence in the alert instead, and PayPal will use it to contest the chargeback if one arrives. Appears in the PayPal Disputes Report as dispute type Alert. See PayPal's help article, How do I respond to a pre-chargeback alert?

Dispute reasons

Billing or subscription error: The consumer claims a billing error occurred, such as a duplicate charge, an incorrect amount, or being billed after canceling a subscription. These disputes go straight to the claim stage without an inquiry period.
Item not received (INR): The consumer paid for a product or service but claims it was never delivered. The most common dispute reason. Consumers have up to 180 days from the payment date to file.
Misdirected transaction: The consumer claims the payment was sent to the wrong recipient or account by mistake.
Request for additional details: The consumer is requesting more information about a transaction, such as a receipt or confirmation, rather than actively disputing the charge. These are typically lower risk.
Significantly not as described (SNAD): The consumer received the item or service but claims it was materially different from how it was described. For example, a subscription that did not match the advertised features.
Unauthorized transaction: The consumer claims they did not authorize the charge. For example, if their account or card was compromised and used without their knowledge.

Dispute lifecycle and stages

Dispute stage: Where a dispute currently sits in PayPal's resolution process. The stage determines what actions are available and how much time you have to respond. The stages are Inquiry, Chargeback (PayPal internal), Pre-arbitration, and Arbitration.
Inquiry: The first stage of a dispute. Both parties have 20 days to communicate and resolve the issue directly without PayPal intervening. If unresolved, the dispute may escalate to the chargeback (claim) stage.
Chargeback (PayPal internal stage): Within PayPal's internal lifecycle, this refers to the stage when a dispute has been escalated to a claim and PayPal is actively reviewing the case. This is distinct from a credit card chargeback. At this stage, you can accept the claim, submit evidence, or make an offer.
Pre-arbitration: The first appeal stage. If PayPal's initial decision goes against you and you believe it was incorrect, you can appeal during pre-arbitration. If you do not appeal within the appeal window, the case is considered resolved.
Arbitration: The second and final appeal stage. If the pre-arbitration appeal was denied, you may appeal once more. If this window passes without action, the case returns to resolved status from pre-arbitration.

Dispute statuses

Dispute status: The current state of activity within a dispute stage. Dispute stage tells you where the dispute is in the overall lifecycle. Dispute status tells you what is happening now and what action, if any, is required.
Open: The dispute is active and awaiting action. The consumer, the merchant, or PayPal may be expected to take next steps. Review the dispute details to understand what response is needed and by when.
Under Review: PayPal is currently reviewing the dispute. No action is available to you or the consumer at this time. You will be notified when a decision has been made.
Waiting for Seller Response: PayPal is waiting for you, the merchant, to respond. This status is time sensitive. Failing to respond within the deadline typically results in a default decision in the consumer's favor. Check the dispute due date immediately.
Waiting for Buyer Response: PayPal is waiting for the consumer to respond or provide additional information.
Resolved: The dispute has been closed and a final decision has been reached, either in the consumer's favor (refund issued) or the merchant's favor (funds released).

Dispute outcomes

Dispute outcome: The final result of a resolved dispute. Determines who received the funds and whether fees were applied.
Resolved in merchant's favor: PayPal, or the card issuer for chargebacks, determined the transaction was legitimate. Any hold on the disputed funds is released back to you.
Resolved in buyer's favor: The dispute was decided in the consumer's favor. PayPal refunds the transaction amount to the consumer. You lose the transaction amount and any applicable dispute fees.
Accepted claim: You accepted the consumer's claim rather than contesting it, typically by issuing a refund. This may help avoid a chargeback fee but results in loss of the transaction amount.
Canceled: The dispute was withdrawn by the consumer or closed without a formal resolution. For example, if the consumer received a satisfactory response from the merchant before escalation.

Fees and rates

Chargeback fee: A fee charged when a consumer files an external dispute (chargeback) through their bank or card issuer. Applied separately from dispute fees. Contact your Account Manager for the fees that apply to your account.
Dispute fee: A fee charged by PayPal when a consumer dispute escalates to a claim. Contact your Account Manager for the fees that apply to your account.
Dispute rate: The ratio of disputes, claims, and chargebacks compared to your total PayPal transaction volume over a rolling three-month period. Rates above a defined threshold can result in elevated fees and account restrictions.
High volume dispute fee: An elevated fee applied when a merchant's dispute rate reaches a defined threshold. Sustained high rates can also result in PayPal account limitations.

Parties

Card network: The payment network, such as Visa, Mastercard, or American Express, that sets the dispute rules, timelines, and reason codes governing chargeback resolution.
Consumer: The customer who made the original purchase and initiated the dispute. PayPal's interface refers to this party as the buyer.
Issuing bank / card issuer: The financial institution that issued the consumer's debit or credit card. For chargebacks, the issuing bank makes the final determination, not PayPal.
Merchant: The seller who provided the product or service being disputed. Responsible for monitoring disputes, responding within deadlines, and submitting evidence when contesting a claim.
PayPal: The payment processor that facilitated the transaction. Mediates and adjudicates internal disputes. For chargebacks, acts as an intermediary between the merchant and the consumer's bank.
Segpay: Your payment processing partner. Provides the Merchant Portal and SRS reporting tools for visibility into PayPal disputes, and reconciles dispute records against your transaction history.

Dispute report fields

These fields appear in your PayPal dispute reports in the Merchant Portal (see PayPal Disputes Report). If you use the Segpay Reporting Service, see PayPal Dispute Reporting.

Consumer email: The email address associated with the consumer's PayPal account or checkout session.
Consumer name: The name of the consumer who initiated the dispute.
Currency: The currency in which the original transaction was processed, for example USD, EUR, or GBP.
Dispute creation date: The date the consumer first filed the dispute with PayPal. This starts the dispute clock.
Dispute due date: The deadline by which you must respond to or take action on a dispute. Missing this date typically results in a default decision in the consumer's favor. Treat this as a hard deadline.
Dispute ID: The unique reference number assigned by PayPal to each dispute case. Use this when communicating with Segpay support or PayPal about a specific dispute.
Dispute reason: The reason the consumer gave when filing the dispute. See Dispute reasons for the possible values.
Dispute resolution date: The date the dispute was closed and a final outcome was recorded.
Dispute stage: How far the dispute has progressed through PayPal's resolution process. See Dispute lifecycle and stages for the possible values.
Dispute status: The current state of activity within the dispute stage. See Dispute statuses for the possible values.
Dispute type: Classifies the dispute as Internal, External, or Alert. See Dispute types for definitions.
MID (Merchant ID): Your unique identifier within the Segpay platform. All dispute records are associated with a specific MID, corresponding to one of your merchant accounts.
PayPal type: Indicates the type of PayPal product or payment method involved in the disputed transaction, such as standard PayPal, PayPal Credit, or Pay Later.
Purchase ID: The identifier for the specific purchase or subscription order being disputed.
Region: The geographic region associated with the merchant account or transaction.
Reversal transaction date: The date a reversal transaction, such as a revoke or chargeback, posted against the original sale.
Sale transaction date: The date the original purchase was made by the consumer.
Sale transaction ID: Segpay's internal reference number for the original sale transaction associated with the dispute.
Transaction amount: The original value of the disputed transaction in the transaction currency.
URL: The website or offer URL associated with the original transaction under dispute.
Vertical: The business category or vertical classification assigned to your merchant account.

PayPal dispute reports

Five PayPal dispute reports are available. You can run each report in the Merchant Portal under PayPal Dispute Console, or retrieve it programmatically through the Segpay Reporting Service (SRS). Reports are listed below by their Merchant Portal menu label. For details on running these reports in the Merchant Portal, see PayPal Disputes Report. For SRS request formats and field definitions, see PayPal Dispute Reporting.

PayPal Disputes Report: Full view of all disputes associated with your account, including ID, type, status, reason, amount, and consumer details. The primary day-to-day dispute monitoring tool.
Disputes Outcome: Shows how your disputes were resolved. Useful for tracking win and loss trends and understanding dispute outcome patterns over time.
Disputes by Due Date: Lists open disputes sorted by response deadline. Use to prioritize which disputes require immediate attention to avoid default decisions.
Internal to External Disputes: Tracks disputes that began as internal PayPal disputes and progressed to the external (chargeback) stage. Useful for understanding escalation patterns.
Refunds Resulting in Disputes: Identifies refunds that subsequently led to a dispute or chargeback. Useful for identifying patterns where refunds are not preventing escalation.