PayPal Dispute Copilot

Empowering merchants to win PayPal chargebacks in minutes with AI-driven evidence.

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InspirationManaging chargebacks and buyer disputes is one of the biggest operational headaches for online merchants. PayPal gives merchants a tight 10-day window to submit evidence, but gathering tracking proof, customer logs, and writing compelling defense letters manually takes hours. Many smaller merchants simply give up and forfeit their revenue.

We were inspired to build PayPal Dispute Copilot to level the playing field—giving merchants an instant, AI-powered assistant that turns complex dispute claims into winning evidence packages in seconds.

What it does

PayPal Dispute Copilot is an AI-powered dispute management assistant that helps merchants resolve chargebacks and buyers' disputes before the 10-day PayPal deadline. Automated Dispute Ingestion: Continuously monitors incoming buyer disputes and categorizes them based on reason codes (e.g., Item Not Received, Unauthorized Transaction, or Significantly Not as Described). AI Win Confidence Score: Instantly evaluates claim history, tracking information, and customer logs to calculate a real-time win probability score for each case. Instant Evidence Generation: Generates comprehensive, professional defense packages—including custom response letters, tracking proofs, and delivery logs tailored to PayPal's seller protection requirements. One-Click Merchant Approval: Gives merchants full control with a streamlined "Human-in-the-Loop" dashboard to review, edit, and submit complete dispute evidence to PayPal in seconds.

How we built it

Frontend & UI: Built with Next.js, React, and Tailwind CSS to create a fast, enterprise-grade merchant dashboard and dispute management console. AI Engine: Integrated OpenAI / Gemini models to analyze incoming dispute claim reason codes, calculate an AI Win Confidence Score, and automatically write structured, professional evidence response drafts. Backend & Workflow: Structured mock webhook listeners and API routes to handle live dispute status updates, merchant approval flows, and simulated evidence submission to PayPal's API sandbox.(Database-Supabase).

Challenges we ran into

Structuring AI Output: Crafting prompts that produce legally grounded, highly specific evidence letters tailored to various chargeback reasons (e.g., Unauthorized Transaction vs. Item Not Received) without hallucinating facts. Real-Time Data Flow: Designing a seamless UI that lets merchants review AI confidence scores, edit evidence drafts, and submit claims with single-click approval. Mobile-First Deployment & Git Workflows: Pushing complex full-stack web applications and managing Git repositories directly from a cloud environment on mobile presented unique deployment hurdles that required clever terminal and CLI troubleshooting!

Accomplishments that we're proud of

First Ever Hackathon Project: Successfully conceptualized, built, debugged, and shipped a complete full-stack web application for our very first hackathon experience. Instant Evidence Generation: Successfully engineered prompt templates and LLM integration that generate fully structured, professional merchant evidence packages in under 3 seconds. Smart Win-Rate Scoring Algorithm: Developed a realistic confidence scoring system that analyzes dispute reason codes and available proof to help merchants prioritize high-stakes chargebacks. Seamless Human-in-the-Loop UX: Created an intuitive dashboard interface that balances automated AI speed with merchant control, allowing easy review and single-click submissions.

What we learned

How to leverage LLMs to automate tedious financial compliance workflows without removing human-in-the-loop oversight. Best practices for designing intuitive merchant dashboards that prioritize high-urgency tasks (like ticking 10-day deadlines). Resilience in developer tools—learning how to manage full Git version control and remote cloud workspaces under tight hackathon deadlines.

What's next for PayPal Dispute Copilot

Live PayPal API Integration: Transition from sandbox testing to live PayPal Webhooks and the Disputes API, enabling automatic end-to-end processing without requiring manual file uploads. Multi-Platform Support: Expand integrations beyond PayPal to support other major payment processors and fraud networks (e.g., Stripe, Shopify Payments, and Chargeback911). Predictive Fraud & Win Analytics: Train custom machine learning models on historical chargeback outcomes to predict win probabilities even more accurately and flag high-risk transaction patterns. Automated Evidence Retrieval: Directly connect with merchant ecommerce platforms (like WooCommerce, Shopify, and shipping carriers like UPS/FedEx) to automatically fetch tracking numbers, proof of delivery, and order receipts in real time.

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