Consumer complaint received 2025-10-31 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Problem with a purchase shown on your statement — Credit card company isn't resolving a dispute about a purchase on your statement
Company: Paypal Holdings, Inc
State: CA

Complaint narrative:
I am filing a formal complaint against PayPal regarding an unresolved refund issue for amount of {$490.00}. 

On XX/XX/year>, I purchased a gaming soundbar from XXXX XXXX. After several days, I still had not received any order updates or tracking information. Because the merchant is a small business with limited online presence, I became concerned about the legitimacy of the transaction. Therefore, I called XXXX, the number provided by PayPal, to open a dispute. 

Eventually, I received the product. However, I was dissatisfied with its quality and compatibility, so I decided to return it for a refund. The merchant informed me that I needed to close the dispute before they could issue a return label. On XX/XX/XXXX, I called the same number again ( XXXX ) to close the dispute. The merchant then issued the return label, and I shipped the product back on XX/XX/XXXX via XXXX ( Tracking Number : XXXX ). The return was delivered on XX/XX/XXXX. 

After receiving the return, the merchant discovered they were unable to process the refund because a chargeback dispute was still open. We later learned that the number XXXX actually belongs to PayPal Mastercard, which is a separate entity from PayPal itself. When I opened the dispute through PayPal Mastercard, PayPal automatically created a duplicate dispute in their Resolution Center.

I contacted PayPal for clarification. A representative explained that I should have filed the dispute with PayPal first rather than with PayPal Mastercard. Because the dispute was considered external, I was told to wait 14 days for the system to update. I was also advised that the merchant could accept liability in the XXXX XXXX to trigger the refund. However, the merchant reported that they had no option to do this and even shared screenshots and a video as proof. The merchant then contacted PayPal XXXX XXXX directly on XX/XX/XXXX ( since they are based in XXXX ) to confirm that they had received the returned product and wanted to issue the refund. 

After XXXX days, the case remained open with no progress. I initiated multiple conference calls with both PayPal and PayPal Mastercard. PayPal Mastercard repeatedly confirmed that they had closed their dispute per my request and that there was nothing further to do on their end. However, PayPal kept their dispute open and insisted that I contact PayPal Mastercard to resolve the issue. 

During XXXX call, I uploaded a digital letter from PayPal Mastercard and screenshots showing the chargeback credit adjustments. PayPal then told me I would receive an update via email within 7 days but I never did.

Subsequent PayPal representatives continued to provide inconsistent information and repeatedly extended the timelines. In XXXX call, I was told that the dispute had been closed in my favor and that PayPal would issue the refund within 8 days. That did not occur. When I called again after 8 days, another agent told me the case would close on XX/XX/XXXX. I again uploaded additional supporting documents, including the return label, merchant emails, and shipping confirmation. Despite this, the case remained open as of XX/XX/XXXX. 

When I contacted PayPal on XX/XX/XXXX for an update, I was informed that they could not take any further action and that I should wait 75 days for the case to close automatically and asked me to contact the merchant after 75 days for a refund. They also suggested that I ask the merchant to issue the refund using an alternative payment method which is unreasonable, as a merchant can only issue a refund through the original payment channel. 

At this point, I am extremely frustrated. PayPals automatically opened dispute in their Resolution Center has prevented me from receiving my refund, and their support team has been unable to resolve the issue. Therefore, on XX/XX/XXXX, I called XXXX again to reopen a dispute through PayPal Mastercard and seek further assistance.

Company response to consumer: Closed with explanation