The leading cause of a lost dispute is not a weak case, it is no response within the deadline. On PayPal you have 10 days to answer a claim. On Klarna, 14 days for a standard dispute and 7 days for an unauthorised purchase. On Shopify Payments the window runs from 7 to 21 days and the money is debited immediately. Past those deadlines the customer is refunded automatically, at your expense.
Dispute, claim, chargeback: what the words mean
These terms get used interchangeably, but they describe distinct procedures with different deadlines. Getting them straight is the first step to never missing one.
- A PayPal dispute is a conversation opened by the buyer in their PayPal account. At this stage PayPal does not intervene: it is on you to reach an agreement with the customer.
- A PayPal claim is the next stage. If no agreement is reached, the dispute escalates into a claim and PayPal decides, based on the evidence supplied.
- A Klarna dispute runs through the Klarna merchant portal. Klarna sends you information requests that you must answer within a fixed window.
- A chargeback is a reversal filed by the customer with their own bank, on a card payment. With Shopify Payments, Shopify forwards it to you and submits your evidence to the card issuer.
- An inquiry, specific to card payments, is a request for information from the bank before any chargeback. No money has moved yet, but it can escalate.
The deadlines to know by heart
If you take one table away from this article, make it this one. Write these deadlines into your helpdesk or your calendar the moment a case opens.
| Platform | Stage | Deadline | If you do not respond |
|---|---|---|---|
| PayPal | Buyer opens a dispute | Up to 180 days after payment | — |
| PayPal | Dispute escalates to claim | 20 days after the dispute opens | Without escalation, the dispute closes |
| PayPal | Seller response to a claim | 10 days | Closed in the buyer's favour, full refund |
| Klarna | First request (standard dispute) | 14 days | Chargeback raised against you |
| Klarna | First request (unauthorised purchase) | 7 days | Chargeback raised against you |
| Klarna | Each follow-up request | 7 days | Chargeback raised against you |
| Shopify Payments | Chargeback response | 7 to 21 days | Amount and fees permanently lost |
| Shopify Payments | Bank decision | Up to 75 days after submission | — |
Deadlines run in calendar days, weekends included. A dispute opened on a Friday evening and discovered on Monday has already burned three days.
PayPal disputes, step by step
1. The dispute opens: reply fast, and in writing
You get an email and the case appears in PayPal's Resolution Centre. The buyer states a reason: item not received, item significantly not as described, or unauthorised transaction.
Reply inside the Resolution Centre rather than by email: that thread is what PayPal reads if the case escalates. At this stage your goal is to solve the problem. A tracking number, an exchange offer or a partial refund is often enough for the buyer to close the dispute themselves. Stay factual and courteous, because everything you write may be read by an arbitrator later.
2. It escalates to a claim: build the evidence file
Once PayPal decides, only documents count. What wins cases:
- Proof of delivery with a tracking number from a recognised carrier, showing the delivery address matching the one on the order. For goods above a certain value, proof of signature is usually required.
- The full conversation with the customer, exported as a PDF with dates visible.
- The product listing as it appeared at the time of sale: description, photos, dimensions, stated delivery times.
- Your policies as published on the store: returns, delivery, cancellations.
- For a digital product, access logs: download timestamps, IP address, account activity.
3. The common mistakes
Three mistakes lose more cases than any weak evidence. Responding past the deadline, which closes the case automatically against you. Refunding outside the PayPal case, which leaves no record and can mean you pay twice. And replying emotionally rather than factually, which never helps and sometimes hurts.
Klarna disputes: responding in the merchant portal
Klarna works differently from PayPal. It pays you up front and then recovers from the customer, which makes it stricter on merchant response times.
Everything happens in the Klarna merchant portal, under the disputes section. Klarna sends an information request with a clear deadline: 14 days for a standard dispute, 7 days for an unauthorised purchase, and 7 days for each follow-up request. Miss it and Klarna raises a chargeback against you automatically, with no further discussion.
What Klarna expects is largely the same evidence as PayPal: tracking and proof of delivery, the conversation with the customer, the product listing, and your published policies. Two specifics are worth knowing. For a partial return, register the return in the portal rather than refunding directly, so the customer's payment plan is adjusted correctly. And for an unauthorised purchase, the burden is on you to show the order was genuine: delivery address matching the account, IP address, order history.
One habit saves most Klarna cases: check the portal twice a week, even when nothing seems to be happening. Klarna notification emails land in spam more often than you would expect, and a seven-day window does not forgive a missed email.
Shopify Payments chargebacks: what changes
A card chargeback is a different animal, for one reason: the money is taken from you immediately, along with a fee, before anything is decided. You are not contesting a withholding, you are trying to recover funds already gone.
Shopify pre-fills part of the evidence automatically, including order details, tracking and the IP address at checkout. Your job is to complete it with what Shopify cannot know: the conversation with the customer, screenshots of the listing, and a clear written explanation.
Two things are worth keeping in mind. First, you can only submit once, so do not send a partial file hoping to add to it later. Second, the decision belongs to the issuing bank, not to Shopify, and it can take up to 75 days.
Watch your dispute rate as closely as the individual cases. Card networks apply thresholds, generally around 0.9 % of transactions, above which monitoring programmes and penalties kick in. A single lost case is an annoyance; a rising rate puts the account itself at risk.
A response template that works
Structure beats eloquence. Reviewers read dozens of files a day and look for specific facts, fast. This skeleton works across all three platforms:
1. One-sentence summary. "Order #1234 placed on 3 March was delivered on 7 March to the address given by the customer, with signature on receipt."
2. Timeline of facts. Dated list: order, dispatch, delivery, each customer contact and each reply.
3. Evidence, numbered. "Exhibit 1: carrier proof of delivery. Exhibit 2: full email exchange. Exhibit 3: product listing at time of sale."
4. Direct answer to the stated reason. If the buyer says the item was not as described, quote your listing and compare it with what was shipped.
5. Your policy and what you offered. "Our returns policy allows 30 days. We offered an exchange on 12 March, which received no response."
Keep it factual, dated and verifiable. No adjectives, no judgement of the customer, no speculation about their motives.
Preventing disputes beats winning them
Every dispute costs time even when you win. Most are preventable, and the fixes are unglamorous:
- Tracking on every order, sent proactively. "Where is my order?" is the leading cause of disputes, and a tracking link answers it before it is asked.
- Delivery times stated honestly, including the dispatch window. Promising three days and delivering in ten creates disputes that no evidence file will win.
- Photos and dimensions that match reality. Most "not as described" cases come from a flattering photo or a missing measurement.
- A recognisable billing descriptor. A charge the customer does not recognise on their statement turns into an unauthorised transaction claim.
- A reply within 24 hours. A large share of disputes are opened by customers who simply could not get an answer.
When to hand dispute handling over
Dispute management is a poor fit for a founder's calendar, for one structural reason: it is urgent, unpredictable and procedural. A case lands on a Saturday, the deadline is seven days, and the work is assembling documents rather than making decisions.
Handing it to a dedicated agent makes sense once you pass roughly five disputes a month, or if you have ever lost one simply by missing a deadline. The agent monitors the portals daily, assembles the evidence, writes the response in your name and tracks the case to closure. You see the summary, not the paperwork.
That is exactly what we do at Kotikota Solution, as part of full e-commerce customer service: PayPal, Klarna and Shopify Payments, with a process already in place. A dedicated agent costs €800 a month, five days a week. One recovered dispute of a few hundred euros often covers a good share of that.