This is directly from the ebay dispute console page:
Unpaid Items can usually be resolved by direct communication between buyers and sellers. In such cases, eBay provides an online process through which the buyer and seller can communicate with each other to resolve the situation. Please note that eBay's Unpaid Item policy and eBay's User Agreement both make clear that buyers must pay for the items that they commit to purchase.
Typically there are four steps to the Unpaid Item process:
1) Seller files an Unpaid Item dispute.
Sellers can report an Unpaid Item up to 45 days after the transaction date (i.e. the date when the buyer commits to buying the item and the seller commits to selling it). Usually the seller must wait 7 days after a listing closes to file an Unpaid Item dispute. However, in the following exceptional cases, the seller can file a dispute immediately:
At the time of the filing the buyer is no longer a registered user of eBay, or
The seller and buyer both wish to mutually withdraw from the transaction.
In the first case the buyer will receive an Unpaid Item strike and the seller will receive a Final Value Fee credit without any additional steps. In the second case the seller must file the dispute for mutual withdrawal reasons first, and if the buyer responds to the dispute and agrees the seller will receive a Final Value Fee credit and no strike will be given to the buyer. If the buyer fails to respond, the seller can still close the dispute to receive a Final Value Fee credit, but the buyer will not receive an Unpaid Item strike.
File an Unpaid Item dispute
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2) eBay contacts the buyer.
Once the seller files an Unpaid Item dispute, eBay sends the buyer an email notification and displays a pop-up message if the buyer signs in within 14 days of the filing. The email and pop-up message will provide details on one of the following situations:
Friendly reminder to pay - the email and pop-up message will remind the buyer that payment has not been received, along with simple instructions on how to respond or how to pay for the item. If the buyer does not respond to the email or pop-up message within 7 days, the seller may file for a Final Value Fee credit. The seller also becomes eligible for a free relist credit.
Mutual agreement indication - while filing the Unpaid Item dispute, if the seller indicates that a mutual agreement has been reached with the buyer not to complete the transaction, eBay will ask the buyer for confirmation through an email and pop-up message.
If the buyer confirms the seller's statement about mutual agreement not to complete the transaction, the buyer will not receive an Unpaid Item strike and the seller will receive a Final Value Fee credit.
If the buyer disagrees with the seller's statement on mutual agreement, the buyer will not receive an Unpaid Item strike and the seller will not receive a Final Value Fee credit. The dispute will be closed immediately after the buyer responds and the seller will not be eligible to re-file an Unpaid Item dispute for that transaction.
If the buyer does not respond to the email or pop-up message within 7 days then the seller will be able to close the dispute. The seller will receive a Final Value Fee credit and the buyer will not receive a strike.
3) Communication between the buyer and seller
The buyer is presented with several response options to communicate to the seller:
I want to pay now - simply paying for the item will close the dispute. For listings where PayPal is available, the buyer just has to pay via PayPal to close the dispute. With other payment methods (such as checks or money orders), the seller is encouraged to wait until payment is received before choosing the appropriate option to close the dispute.
I already paid - if payment has already been made, the buyer may provide details of the payment to the seller for review. The seller can then choose the appropriate option to close the dispute.
Communicate with the seller - the buyer and seller can attempt to resolve the problem by communicating directly through the eBay Web site. eBay will provide a message area where the buyer and seller can communicate with each other without relying on email. The seller can close the dispute at any time by choosing the appropriate closure option.
4) Closing the dispute
The seller can close the dispute after the buyer has responded at least once, or if the buyer does not respond within 8 days. A seller can find all Unpaid Item disputes they have filed in their Dispute Console. The seller has several options to close the dispute:
We've completed the transaction and we're both satisfied. With this option, the seller does not receive a Final Value Fee credit and the buyer does not receive an Unpaid Item strike.
We've agreed not to complete the transaction. With this option, the buyer does not receive an Unpaid Item strike, the seller receives a Final Value Fee credit, and the item is eligible for a relist credit.
I no longer wish to communicate with or wait for the buyer. With this option, the buyer receives an Unpaid Item strike, the seller receives a Final Value Fee credit, and the item is eligible for a relist credit.
A dispute can only be open for 60 days after the transaction date (i.e. the date when the buyer commits to buying the item and the seller commits to selling it). If the seller has not closed the dispute within 60 days, it will be automatically closed. When this automatic closure takes place the seller does not receive a Final Value Fee credit and the buyer does not receive an Unpaid Item strike.
Feedback and Unpaid Items
If a buyer does not respond to an Unpaid Item notification and the seller closes the case with an Unpaid Item strike, the buyer can still leave a feedback comment about the transaction, but any feedback rating they leave will not appear and will not count toward the seller’s feedback score. An eBay administrative note will appear under the buyer’s feedback comment, explaining that the buyer did not participate in the Unpaid Item process.
Unpaid Item strikes do not affect a user's feedback score or member profile.
