# How are PayPal clawbacks reflected in settlement? #### How are PayPal clawbacks handled in settlement? PayPal clawbacks are expected to be handled as settlement adjustments rather than as a separate manual invoice process. When PayPal applies a clawback, PayPal automatically deducts the amount from an available positive settlement balance. Bead then passes the related settlement detail through Bead’s settlement reporting so the partner can include the adjustment in payout and reconciliation workflows. #### What happens if the available settlement balance is not enough? If the available settlement balance is not sufficient to cover the full clawback amount, PayPal will continue deducting the remaining balance from the next available positive settlement until the full amount is collected. Those deductions will continue to be reflected in the settlement reporting details passed through by Bead. #### How should partners reconcile PayPal clawbacks? Partners should reconcile PayPal clawbacks through Bead’s settlement API reporting as part of the normal settlement and payout process. The settlement reporting should be used to identify the affected settlement activity, understand the adjustment amount, and reflect the clawback in downstream merchant payout and reconciliation workflows. #### Is this separate from the PayPal dispute process? Yes. This FAQ only explains how clawback amounts are reflected in settlement once PayPal applies them. It does not describe the operational PayPal dispute process, case review workflow, evidence handling, or merchant communication process. #### Related pages * [Settlement](/settlement.md) * [Settlement Data and Reconciliation](/faqs-and-troubleshooting/settlement-faqs/settlement-data-and-deposit-reconciliation.md) * [Deposits](/settlement/deposits.md) * [How are fees deducted from settlement?](/faqs-and-troubleshooting/settlement-faqs/how-are-fees-deducted-from-settlement.md) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://developers.bead.xyz/faqs-and-troubleshooting/settlement-faqs/how-are-paypal-clawbacks-reflected-in-settlement.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.