Unfortunately Paypal does not have an automated way of telling our system that there has been a dispute or chargeback placed on a transaction. So this must be done manually.
You can update the status of the transaction on the Transaction Details page.
When a dispute is opened, we automatically put the affiliates commission (if there is one) on hold/pending until a decision has been made by the payment gateway on the dispute/chargeback.
If lost, the commission will be removed with an status of Dispute/Chargeback Lost. If won, the commission will be available to be paid out with a status of Dispute/Chargeback Won.