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What happens to the sellers funds when a chargeback is received?

April 26, 2017chargeback funds happens received seller

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What happens to the sellers funds when a chargeback is received?

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A chargeback sets in motion a chain reaction. The buyer’s bank pulls the funds from PayPal’s merchant bank. PayPal’s merchant bank pulls the funds from PayPal. And we, in turn, pull the funds from the Seller. Had PayPal’s merchant bank not pulled the funds for that chargeback, PayPal would not have needed to pull the seller’s funds. Note that if the dispute is found in favor of the seller, PayPal will credit the Seller’s account with the disputed funds.