eBay Chargebacks: Everything a Merchant Needs to Know
- March 31, 2022
- 10 minutes
An eBay® chargeback — or eBay payment dispute — is a type of chargeback that merchants may experience when selling on the platform. eBay chargebacks may be filed with a cardholder’s issuing bank, payment institution like PayPal®, or eBay itself and are processed within eBay’s platform.
Because payment disputes can lead to lost revenue and fees, you must comply with eBay’s rules and respond to chargebacks with accuracy, detail, and timeliness.
This detailed guide will help familiarize you with eBay chargebacks and help you learn how to fight eBay disputes.
eBay Chargeback Process
All chargebacks, regardless of the platform that’s used to manage them, serve the same purpose: to protect cardholders from fraud.
Therefore, the eBay chargeback process is basically the same as the process for traditional chargebacks handled outside the selling platform.
Receive the Notification
eBay will notify you after a chargeback is opened against you. Check your Seller Hub for details.
Customers may initiate an eBay chargeback for reasons such as:
- Not receiving a purchased product
- Receiving a product that doesn’t match what’s described in the product listing
- Not recognizing the transaction
- Multiple or inaccurate charges
- Customer indecision
- Order cancellation
- Failure to receive a credit or refund for a qualifying order
Once a payment dispute is initiated, you, as the merchant, must decide how to respond.
Accept or Challenge the Dispute
You must respond to the chargeback notification within 5 days of receiving it.
Your response to an eBay chargeback notification must specify whether you accept or challenge the dispute.
If You Accept the Dispute
Accepting the payment dispute means issuing a refund to the buyer. eBay will deduct the amount of the refund from the total of your available, processing, or on-hold funds.
In some cases — such as when the dispute is for an item that doesn’t match your listing — eBay will try to recover the item for you, though there is no guarantee that your buyer will return the item.
If You Challenge the Dispute
Challenging a dispute requires you to submit documentation and evidence about the transaction. eBay will charge you a dispute fee for fighting the chargeback but will also try to recover the item for you.
In some cases, eBay may challenge a dispute and provide supporting evidence on your behalf. If it does, you won’t be charged a dispute fee.
After challenging a dispute and providing supporting evidence, the cardholder’s bank or payment institution will make a decision. eBay will notify you of the bank’s decision by email, and the status of the dispute will be available in your Seller Hub.
If the bank decides in the buyer’s favor, your customer will receive a refund for any charges. The amount of the refund will be deducted from your available, processing, or on-hold funds unless the dispute is covered by eBay Seller Protection.
eBay payment disputes may remain open for 90 days or more depending on the cardholder’s bank or payment institution. As a result, eBay may hold funds from your payout for up to 30 days after a dispute is filed against you.
Additionally, payment institutions may choose to reopen closed disputes. In such cases, eBay may request more supporting evidence for challenging the dispute.
NOTE: eBay chargebacks are handled entirely within eBay’s technology platform. This means eBay chargeback management is very different from traditional payment disputes made through an acquirer or processor. If you use eBay in addition to other sales platforms (including your website or other marketplaces), you’ll need to manage multiple chargeback processes. If you’d like help with non-eBay disputes, contact Midigator®.
eBay Chargeback vs. eBay Money Back Guarantee vs. eBay Seller Protection
eBay policies are in place to protect both buyers and sellers who use the platform. These policies require both parties to adhere to strict guidelines which outline the protected products and transactions.
eBay Money Back Guarantee
The eBay Money Back Guarantee covers most transactions that take place on the platform. The policy entitles buyers to a refund if an item doesn’t arrive, is faulty or damaged, or doesn’t match the product listing.
Covered transactions under the eBay Money Back Guarantee include items paid for with:
- A payment card (credit or debit card)
- Apple Pay
- Google Pay
- eBay gift card
- eBay voucher
- eBay Bucks
Items paid for using other payment methods, or paid over multiple payments, are not covered.
Transactions involving the purchase of the following items are excluded from coverage under the eBay Money Back Guarantee:
- Real estate
- Digital content
- Travel tickets
- Industrial equipment
Sellers must respond to refund requests within a given time frame — typically three days, depending on the request. When responding, you may choose to accept a return or issue a refund.
If a buyer claims an item hasn’t been received, you may contest the claim by providing tracking details or delivery updates. If a buyer chooses to return an item, eBay may automatically accept the return on your behalf.
You are required to reimburse eBay if an eBay Money Back Guarantee refund request is found in the cardholder’s favor.
eBay Seller Protection
eBay Seller Protection helps protect you from abusive buyers and events outside of your control. Transactions eligible for eBay Seller Protection include all items except those:
- Listed in eBay’s prohibited and restricted items policies
- In categories excluded from eBay Money Back Guarantee
- Sold through Sotheby’s
eBay Seller Protection applies to payment disputes in which:
- The transaction was for a physical item and you have provided evidence of a successful delivery or pickup
- You issued a full refund to the buyer through eBay
- You are a Top Rated Seller and issued a partial refund to the buyer through eBay for an item that was returned used or damaged, in accordance with eBay’s partial refund guidelines
- An eBay Money Back Guarantee was decided in your favor or resolved with a full refund to the buyer through eBay
If one of the above is true, eBay will not seek reimbursement from you for the disputed amount, even if a payment institution decides in favor of the buyer. Additionally, eBay will waive or reimburse your dispute fee.
If eBay determines that you are not eligible for eBay Seller Protection, you can submit an appeal within 30 days of a chargeback decision. During the appeal, you may be asked to provide additional documentation and information to support your case.
A WORD OF CAUTION: Some merchants claim that, despite the policies outlined above, selling on eBay can still lead to fraudulent disputes and other buyer scams. Merchants should take care to fully document, record, and store transaction details and information as potential supporting evidence if you fall victim to buyer abuse or a fraudulent eBay chargeback.
eBay Dispute Fee
eBay charges a dispute fee for any disputed transaction or chargeback in which:
- You fail to respond
- A decision is made in favor of the buyer
- You are not eligible for eBay Seller Protection
The dispute fee costs $20.00 (excluding sales tax) per dispute and is deducted from your available, processing, or on-hold funds.
eBay Chargeback Protection
Preventing eBay chargebacks is different from preventing chargebacks filed with acquirers or processors. Your usual chargeback prevention strategy may not be as effective for dealing with payment disputes that take place on eBay’s more restrictive platform.
To help prevent payment disputes, eBay recommends:
- Creating accurate and detailed product listings
- Publishing multiple high-quality product photos
- Using a delivery service that provides tracking and proof of delivery
- Requiring signature confirmation for orders of $750 or more
- Responding to buyer concerns with timeliness and an intention of arriving at a mutually-acceptable resolution
- Recording and saving all messages and supporting documentation through eBay tools
- Providing buyers with your reasoning for issuing partial refunds
Additionally, stay up-to-date with eBay customer service policies and seller protections. Remaining compliant with the platform’s rules and regulations can help equip you to fight chargebacks and deliver a consistent customer experience.
How to Fight eBay Disputes
Did you receive an eBay chargeback? Wondering what to do next? Complete these three steps.
Decide if you should or shouldn’t fight.
Losing money to chargebacks is frustrating. But if you fight a case that can’t be won, you’ll just make the situation worse.
Carefully review the situation and decide whether or not you should challenge the dispute. You probably don’t want to fight if any of the following are true:
- You made a mistake.
- The chargeback is the result of legitimate, criminal fraud.
- You don’t have enough evidence to support your case.
- The disputed amount is low. (Your time is valuable — don’t invest more in the fight than you’ll be able to recover.)
Once you’ve made a decision, let eBay know how you’d like to proceed (accept or challenge the dispute). Your response should be made within five days of receiving the dispute notice.
Build your case.
eBay and payment institutions use supporting evidence to help determine which party wins the chargeback. The more compelling and complete your evidence, the more likely you are to win the chargeback, so it’s important to record and maintain accurate and complete records.
As you build your case, you’ll need to gather documentation and evidence proving at least one of the following is true:
- The item was shipped on time and received by the customer.
- The item matches the condition and description described in the product listing.
- The item is authentic.
- The transaction was already refunded.
eBay gives specific recommendations based on the reason for the dispute.
For chargebacks related to claims a buyer doesn’t recognize a transaction or didn’t receive the item, eBay suggests you provide the following documents:
A physical item that has been shipped (other than vehicles)
- Tracking information, including proof of delivery to the shipping address used for the order
- Signature confirmation for orders totaling $750 or more
A physical item collected in-store (other than vehicles)
- Date of pickup
- Store of delivery, matching the shipping address included on the order
- Order ID
- Item number, title, and price paid
- The customer’s signature on the pickup form or packing slip
A physical item collected locally from you (other than vehicles)
- A copy of the eBay order details signed by the buyer at the time of pickup, or
- A scan of the buyer’s QR code or manual entry of the buyer’s six-digit pickup code at the time of collection
Vehicles that are shipped
- Proof of delivery, or
- Shipping confirmation when the vehicle is still in transit
Vehicles that are picked up
- A receipt with item details signed by the buyer
Digitally-delivered or intangible items
- Proof the item was used
- Proof the service was provided
- Proof the service was digitally delivered
- Proof the buyer accessed the item
If a buyer initiates a chargeback after claiming an item was damaged or missing parts, eBay recommends providing the following documents:
- A clear photo showing the item is as described in the product listing
- Messages between you and the buyer showing the issue has been resolved, such as a partial refund or other solution
- Evidence that proves the item was returned in a different condition than when it was shipped
For eBay chargebacks resulting from claims an item received isn’t authentic, it’s recommended you provide the following documents:
- Proof of authenticity
- Any messages you have exchanged with the buyer attempting to resolve the issue before the dispute was initiated
For payment disputes claiming a buyer never received a refund, eBay recommends providing the following documents:
- Proof a refund was provided on eBay
- Proof of cancellation
- A copy of your return policy
- Messages with the buyer showing a refund isn’t required
- Proof the item returned was in a different condition than when it was shipped, or proof that a different item was received
Submit your case.
After collecting as much evidence and supporting documentation as possible, upload it to the platform. In some cases, eBay may provide additional supporting documentation on your behalf.
Verify any information contained in the dispute, including the buyer’s information. Ensure your return address is accurate, then submit your case for review by the payment institution.
eBay Chargebacks and PayPal
eBay acquired PayPal in 2002, though both entities split in 2015. However, eBay still allows buyers to use PayPal to pay for purchases on the eBay platform. As such, buyers may initiate chargebacks through PayPal, representing another potential risk to your business.
Fortunately, PayPal provides Seller Protection to eBay sellers with registered PayPal accounts. PayPal Seller Protection covers claims, chargebacks, and reversals that meet eligibility criteria including:
- Maintaining a PayPal Premier or Business account in a qualifying country
- Accepting only full payments from the same PayPal account (no partial payments)
- Receiving payment via PayPal for tangible items sold on eBay
- Shipping to the buyer’s address as listed on PayPal’s “Transaction Details” page after the payment status is changed to “OK to ship”
- Providing shipping documentation and a response to claims, chargebacks, and reversals within 7 days of receipt
Additionally, you must provide:
- Proof of shipment for unauthorized payments claims
- Online proof of delivery for claims of items not received
- A signature receipt for claims of “items not received” over $250
PayPal Seller Protection is provided at no additional cost. However, as with eBay, you should maintain records of your transactions in the event a dispute is filed against your business. Without enough detailed information, you may still be held liable for a chargeback initiated via PayPal.
How Can Midigator Help?
Selling on eBay is a valuable revenue stream for many businesses. However, its chargeback process can feel overly restrictive.
- You don’t have as many opportunities to fight invalid eBay chargebacks. For example, eBay doesn’t offer the card brands’ arbitration process.
- You don’t have the option to communicate directly with your processor since eBay acts as the liaison in the dispute process.
- You’re unable to customize your workflow or use chargeback management software. This means you’ll spend more time fighting eBay disputes than you would traditional chargebacks.
- Most chargeback prevention tools aren’t compatible with eBay disputes.
If eBay is your sole source of revenue, it may be time to look at alternative options.
Or, if you’re already selling through multiple venues, you should consider streamlining your workflows for traditional disputes to compensate for the inefficiencies of eBay. And Midigator can help.
Midigator is intelligent chargeback technology that prevents, fights, and analyzes chargebacks. With intuitive, flexible software, you can easily protect more of your hard-earned revenue. Sign up for a demo to learn more.