Payments · Guide9 min readUpdated November 3, 2026

PayPal Chargeback Thresholds and What Happens Above Them

PayPal's dispute threshold explained: the 1.5% and 100-sales rule, what counts, the $15, $30 and $20 fees, and what PayPal can do above it.

Nick Bonnassies, CMO at Tagada · checked against 9 sources

Article summary

TL;DR

PayPal's published line is a dispute ratio of 1.5%, measured over the previous three full calendar months, for sellers with more than 100 sales in that period. Above it, every dispute costs the High Volume fee ($30 in the US instead of $15), and PayPal may ask for a remediation plan. Disputes also feed PayPal's reserves, limitations and holds.

The High Volume Dispute fee applies when "your dispute ratio is 1.5% or more and you had more than 100 sales transactions in the previous three full calendar months".
US fees, updated October 1, 2026: $15 Standard Dispute fee, $30 High Volume Dispute fee, $20 chargeback fee on card payments made outside a PayPal account.
The ratio counts Item Not Received and Significantly Not as Described claims plus chargebacks and bank reversals, but not Unauthorized Transaction claims.
PayPal's merchant guide says to "keep complaint rates below 1% of your sales".
An "unusually high number of claims and chargebacks" is one of PayPal's listed reasons to limit an account.

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On this page

This page covers PayPal only: its ratio, its fees, its actions. For how chargebacks work at any processor, see chargebacks for merchants. The rest of our PayPal guides are in the PayPal hub.

PayPal's number: 1.5% and 100 sales

The 1.5% is written in the User Agreement, as the trigger for a higher fee. Two conditions must both be true1:

Ratio: "your dispute ratio is 1.5% or more", and
Volume: "you had more than 100 sales transactions in the previous three full calendar months."

If either is false, you pay the Standard Dispute fee1. A seller with 80 sales in three months never reaches the High Volume fee, whatever the ratio. PayPal can still act on its own risk view, as the next sections show.

How the window moves. PayPal compares your claims to "the total amount of your sales for the previous three calendar months"1. Its own example: September's ratio uses June, July and August, and "will determine the dispute fee for all claims filed in October"1.

Fig. 1How PayPal's dispute ratio is timed

June to AugustClaims and chargebacks measured against sales
SeptemberRatio set: 1.5% or more, with over 100 sales?
OctoberEvery new dispute priced at $15 or $30
Each monthThe window moves forward by one month

three months measured, one month priced

PayPal User Agreement (US), Dispute fees, updated September 14, 2026.

Fig. 2Where a 1.2% dispute ratio sits on PayPal

1.2%Dispute ratio, previous three months

under the fee line, over PayPal's own advice

Illustrative example. Thresholds from PayPal's User Agreement and merchant guide, read November 3, 2026.

What counts in the ratio, and what doesn't

More than the claims you lose. The ratio counts cases opened against you, whatever the outcome1.

Case	In the ratio?	Charged a dispute fee?
Item Not Received claim, escalated to PayPal	Yes1	YesUnless an exception applies1
Significantly Not as Described claim	Yes1	YesUnless an exception applies1
Chargeback from the card issuer, or bank reversal	Yes1	Yes1
Unauthorized Transaction claim filed with PayPal	No1	No1
Inquiry never escalated to a claim	May still count1	No1
Case resolved directly with the buyer, not escalated	May still count1	No1
Case decided in your favor	May still count1	NoStandard fee1

The key sentence: excluded disputes "may be excluded from being charged a Standard Dispute fee or a High Volume Dispute fee, but the claim itself may still be included in the overall calculation of your dispute ratio"1. Winning a case saves the fee, not the ratio.

Example

You made 400 sales from June to August, and your claims and chargebacks reach 2% of sales in that window. Both conditions are met: more than 100 sales, and 1.5% or more. Every dispute opened in October costs $30 instead of $151 2. Illustrative figures.

The fees, and when each applies

Two families of fees, depending on how the buyer paid1 2:

Fee (US)	When it applies	Amount	Refunded if you win?
Standard Dispute fee	Payment through a PayPal account or PayPal Guest Checkout; claim, chargeback or bank reversal	$152	NoStandard fee for disputes "decided in your favor"1
High Volume Dispute fee	Same payments, when the 1.5% and 100-sales test is met	$302	Not in the High Volume exception list1
Chargeback fee	Card payments not made through a PayPal account or Guest Checkout	$202	NoIt applies "regardless of whether the buyer is successful"1

Fig. 3What one dispute costs on PayPal, US

Standard Dispute fee15$
Card chargeback fee20$
High Volume Dispute fee30$

Source: PayPal fee page, read November 3, 2026

before the refunded amount itself

PayPal, Merchant and business fees (US), updated October 1, 2026.

The fee comes on top of the payment. When a payment is reversed, "you are responsible for the full amount of the payment sent to you plus any fees"1.

Small claims are spared: no Standard fee on "claims with a transaction value that is less than twice the amount of a Standard Dispute fee"1. More on fees at every processor: chargeback fees.

Card payments and the network programs

For card payments on a Braintree merchant account, Visa's and Mastercard's monitoring programs apply as well. Braintree says card brands place an account in a program when it "meets or exceeds these set thresholds in a given calendar month"6.

Visa VAMP, Excessive: 1.5% and 1,500 disputes and fraud reports a month in the US since April 1, 20267.
Mastercard ECM: from 100 chargebacks and 1.5% in a month8.
How the networks count: "the count of chargebacks opened in a given month divided by the count of settled sales", first chargebacks only6.
Who tells you: for a Braintree merchant account, "our Disputes team will notify you if you're ever identified in any card brand monitoring program"6.

The network ratio is monthly; PayPal's own ratio uses three months. A seller can be under one and over the other. Network formulas: chargeback rate and chargeback monitoring programs.

Watch out

Spreading sales across accounts, descriptors or processors to stay under a threshold is evasion, not a fix. PayPal lists using its services in a way the card networks see as "an abuse of the card system or a violation of card association or network rules" among restricted activities1.

What happens above the threshold

The fee is the first step, not the last. Here is the order PayPal's agreement allows, from mildest to most serious.

High Volume fees. $30 per US dispute while the test is met1 2.
A remediation plan. Sellers on High Volume fees "may be required to provide a remediation plan": the cause, the actions taken, and their timelines1.
Holds on disputed funds. PayPal holds the amount that could be reversed until the case ends1 3.
A reserve. PayPal weighs "whether you have higher than average number of returns, chargebacks, claims or disputes"1. Details: PayPal reserve.
A limitation. "An unusually high number of claims and chargebacks" is a listed reason1. Details: PayPal account limited.
Restricted activity measures. Running your business in a way that "results in or may result in" buyer requests to invalidate payments is a restricted activity1. PayPal can then charge High Volume fees on all disputes "irrespective of your dispute ratio", suspend Seller Protection and recover amounts retained under it in the prior 30 days, and hold your balance for up to 180 days1.
Closure. PayPal can terminate the agreement and close the account. Details: PayPal permanently limited or closed your account.

Source: PayPal User Agreement (US), updated September 14, 2026. PayPal decides each step at its discretion; not every account goes through all of them.

Bringing the ratio down on PayPal

Start from the claim type. Each one points to a different fix.

Fig. 4From the claim type to the fix

Item Not Received claimsSlow shipping or no trackingShip fast, upload tracking from an approved carrier, keep proof of delivery
Significantly Not as Described claimsThe product page oversoldAccurate photos and descriptions, a clear return policy, answer within days
Chargebacks through the card issuerBuyers skip PayPal's processRespond to every inquiry early; INR chargebacks via the issuer aren't covered by Seller Protection
Disputes you would refund anywayThe buyer just wants money backRefund in the Resolution Center before escalation

each fix maps to one kind of dispute

Based on PayPal's Purchase Protection and Seller Protection programs, updated January 26, 2026, and PayPal's merchant guide.

A few PayPal specifics help:

Buyers have time. An Item Not Received dispute can be opened within 180 days of payment, and a dispute escalates to a claim within 20 days3. Answer in the dispute phase, before it becomes a claim.
Seller Protection has limits. "Item Not Received claims that result from buyers filing chargeback claims with their issuers for card-funded transactions are not eligible"4.
Proof matters. For Unauthorized Transaction cases, proof of shipment or delivery must show the item went out "no later than two days after PayPal notified you"4.
Complaints under 1%. PayPal's guide pairs it with prompt shipping and clear communication5.

Alerts that stop disputes before they count: chargeback alerts.

By industry

Industry	What drives disputes	Guide
Supplements	Forgotten subscriptions, unclear trials and "it didn't work" claims	Chargebacks for supplement brands
Skincare	Forgotten refills and results that didn't match the ad	Chargebacks for skincare brands
Fitness	Programs and memberships customers forget to cancel	Chargebacks for fitness brands
Info products	"Not as described" claims on courses and coaching	Chargebacks for info product businesses
Online pharmacy	Refills and unrecognized charges	Chargebacks for online pharmacies
Telehealth	Memberships and consult fees	Chargebacks for telehealth companies

How Tagada helps

Fewer disputes, and a vault you can take with you

Acceptance: "If you sell something real, we will get you paid."9
Fraud and security: "Native 3DS2, device intelligence, and rules engine: approve real customers, block the rest."9
A vault you own: "Switch processors without re-onboarding customers. No vendor lock-in. Ever."9
Onboarding: "One KYC. One signed package. We distribute it across our processor network and follow up so you don't have to."9
Support: "24/7 human support on Slack Connect"9.

Tagada follows Visa and Mastercard rules and the laws that apply to payments. Tagada CRM plans are on the pricing page.

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Fewer disputes, and a vault you can take with you

Updated on November 3, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What is PayPal's chargeback limit?

PayPal's published threshold is a dispute ratio of 1.5%, for sellers with more than 100 sales in the previous three full calendar months. Above it, each dispute costs the High Volume fee, $30 in the US, and PayPal may ask for a remediation plan. PayPal can also limit an account with an unusually high number of claims and chargebacks.

What is PayPal's High Volume Dispute fee?

It's the higher dispute fee PayPal charges when your dispute ratio is 1.5% or more and you had more than 100 sales in the previous three full calendar months. In the US it's $30 per dispute instead of $15. PayPal can also apply it to all disputes, whatever your ratio, if you engage in a restricted activity.

Do I pay PayPal's dispute fee if I win?

Not the Standard Dispute fee: PayPal deducts it after the claim is decided and doesn't charge it on disputes decided in your favor. That exception isn't listed for the High Volume fee. The $20 chargeback fee on card payments made outside a PayPal account applies whether or not the buyer wins.

Do PayPal inquiries count toward my dispute ratio?

They can. Inquiries never escalated to a claim, and cases you settle directly with the buyer, aren't charged a dispute fee. But PayPal says such claims "may still be included in the overall calculation of your dispute ratio." Unauthorized Transaction claims are excluded from the ratio.

How many disputes before PayPal limits my account?

PayPal publishes no number for limitations. Its agreement lists "an unusually high number of claims and chargebacks" as a reason, judged on its own risk criteria. The only published figures are the 1.5% and 100-sales test for fees, and PayPal's advice to keep complaints below 1% of sales.

Sources

Checked November 3, 2026

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