Consumer complaint received 2026-01-29 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Confusing or missing disclosures — 
Company: Paypal Holdings, Inc
State: FL

Complaint narrative:
Paypal Case ID : XXXX Paypal Transaction ID : XXXX I am a long-term PayPal business seller. I have been selling with PayPal since 2013 and have relied on PayPal as the primary payment processor for my luxury resale Shopify store. As a long-term business user, I relied on PayPals representations regarding Seller Protection and fraud protection when accepting payments.

PayPal advertises XXXX XXXX and fraud protection for merchants and flagged this transaction as low chargeback risk at the time of sale. 

Despite this, PayPal removed {$1300.00} from my business account and charged a dispute fee after a buyer filed a bank chargeback months after delivery. The funds were debited automatically with the dispute reason listed only as Other, without any clear explanation, policy citation, or meaningful review of the evidence I submitted.

I provided documentation showing the item was accurately described, delivered successfully, and shipped as listed. However, PayPal did not clearly disclose why XXXX XXXX was denied, did not identify what specific policy exclusion applied, and did not provide a transparent or fair appeal process. 

As a result of PayPals actions, my business account was left with a negative balance and my ability to use PayPal services was restricted. As a small business, my financials were directly and materially impacted. The loss of funds disrupted cash flow, affected my ability to operate day-to-day, and limited my ability to accept payments. This financial harm occurred without clear disclosure, transparent justification, or a meaningful opportunity to appeal PayPals decision.

I believe PayPals seller protection and dispute handling practices are confusing, misleading, and inconsistent with how these protections are marketed to small business sellers.

PayPals current dispute and seller protection practices appear to favor buyer claims by default, even when sellers provide clear documentation and evidence. This creates an environment where chargeback abuse and bad-faith buyer behavior are not meaningfully addressed, leaving honest sellers financially exposed and without adequate protection. 
While I understand that PayPal does not have authority over final decisions made by card-issuing financial institutions in chargebacks, PayPal continues to market Seller Protection and fraud protection to merchants without clearly disclosing the limited nature of these protections in bank-initiated disputes. In practice, sellers bear the financial loss even when documentation is provided, which creates an imbalance that leaves small businesses exposed to chargeback abuse and bad-faith buyer claims.

PayPal charges sellers significant transaction fees, often totaling approximately 4 % per transaction, while marketing XXXX XXXX as a benefit of using its platform. Historically, PayPal maintained mechanisms to absorb or offset certain losses related to disputes. Today, however, sellers are required to bear the full financial impact of bank chargebacks, even when PayPal collects fees, controls the transaction flow, and benefits from seller reliance on its platform. This imbalance raises concerns about whether PayPals XXXX XXXX program provides meaningful protection relative to the fees charged to small business sellers.

Company response to consumer: Closed with non-monetary relief