How to Retract a Payment on PayPal

By Jennifer Eblin

Paypal makes it easy to buy products and send payment online. While it’s best known as a method of payment for eBay items, it also works on other websites. As a buyer, you have the option to retract a payment you made for an item. The best way to retract a payment on Paypal is to do a chargeback.

Step 1

Decide exactly why you want to retract a payment on Paypal. Most buyers retract a payment because the item arrived in poor condition or the description of the item didn’t match the actual piece. In some cases, you’ll want to retract the payment because the seller never sent you the item at all.

Step 2

Open a dispute with Paypal by opening the transaction name and clicking File A Dispute. Paypal contacts the seller, giving them a specified amount of time to answer to the charges. If the seller doesn’t respond in enough time, the money is automatically credited back to your account.

Step 3

Contact your credit card company and request a chargeback. The way a chargeback works is that your credit card company retracts the Paypal payment and credits the money back to your credit card account. Your card contacts Paypal first to get the details of the account.

Step 4

Follow through with the emails sent by Paypal because the website allows you to initiate a chargeback and dispute at the same time. The emails ask why you want to retract your payment, what your response to the seller is and it may take several weeks for the dispute to settle.

Step 5

Check your account for details about the transaction and the final decision. If Paypal determines that you were right, the company takes the money from the seller and deposits it back in your account. You’ll receive an email from either Paypal or your credit card when the payment is retracted.

Tips & Warnings

  • If the seller hasn’t yet accepted or claimed your original payment, log into your account and select the Details option next to the transaction. Then click the Cancel Transaction. This only applies if you have an unverified account.
  • Consider contacting the seller and asking for a refund before you initiate a chargeback or open a dispute. If you work with a reputable seller, they’ll often take steps to ensure you’re happy because they don’t want to risk negative feedback or losing money on a sale.