Chargebacks and disputes

A chargeback occurs when a customer disputes a charge directly with their bank or card issuer. When this happens, the disputed funds are immediately withdrawn from your payout and held while the bank investigates the claim.

As the Merchant of Record, FastSpring is responsible for monitoring fraud rates and chargebacks to remain within thresholds set by card networks. If a chargeback occurs, FastSpring may block the associated credit card number for 90 days to prevent further fraudulent activity.

Handle chargebacks

Once a chargeback is initiated, the outcome is determined solely by the buyer's bank, not FastSpring. The process typically follows these steps:

1. Submit Evidence: You provide all relevant documentation (proof of delivery, logs, etc.) to FastSpring.
2. Processor Review: FastSpring forwards your evidence to the payment processor, who submits it to the buyer's bank.
3. Bank Decision: The bank reviews the case and makes a final decision. This process can take 60–75 days.

Warning: If a chargeback has already been initiated, do not issue a manual refund. This will not stop the dispute process.

Reduce chargebacks

While banks often favor cardholders by default, you can minimize disputes by following these best practices:

• Clear Descriptions: Ensure product descriptions are accurate and detailed.
• Policies: Display refund terms and policies prominently at checkout.
• Communication: Respond promptly to buyer emails to resolve issues before they escalate.
• No Surprises: Avoid misleading upsells or surprise charges.

PayPal disputes, claims, and reversals

PayPal manages disputes differently from standard credit card chargebacks. FastSpring manages responses for PayPal disputes on your behalf; do not contact buyers directly through PayPal, as this can interfere with the response process.

If there is an open case with PayPal regarding a transaction within the last 72 hours, FastSpring will inform your company and provide 48 hours to resolve the issue. If unresolved, we may issue a refund to prevent escalation.

Note: Digital goods (software, licenses, downloads) are not covered under PayPal Seller Protection, making documentation critical for these disputes.

PayPal case types

PayPal classifies transaction issues into the following categories, each with specific resolution timelines and requirements:

• Chargebacks: Occurs when a customer contacts their issuing bank instead of PayPal. The bank returns the full amount to the customer and applies a chargeback fee. These are handled like standard card chargebacks.
• Disputes: Occurs when a PayPal customer expresses dissatisfaction or does not recognize the charge within the PayPal Resolution Center. You or FastSpring have 20 days to resolve the dispute and prove the transaction was legitimate.
• Claims: Occurs after a dispute is escalated. You or FastSpring must respond with proof of purchase, usage, or successful product delivery within 10 days.
• Reversals: Indicates that PayPal has returned the funds to the customer, but no chargeback fee was applied.

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