Seller Guide to Securing Your Business With PayPal Seller Protection
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OneShop Team
1 min read

Paypal is one of the most successful electronic wallets worldwide and one of the most used payment services globally. With the safety and security of their sellers in mind, Paypal has launched the Seller Protection Policy to ensure that online payments to sellers are protected against online fraud so they can do business with ease and confidence.

In today's world, no online buying experience is complete without the inclusion of PayPal. Using this service to make a transaction can save you money on fees and provide the safest way to buy eGift cards from various brands worldwide, which can also earn you bonus points.

This blog post will cover everything there is to know about safeguarding your business with PayPal Seller Protection.

How PayPal Seller Protection works

The great thing about the PayPal Seller Protection is that this works by helping the seller be compensated for the entire payment amount if the buyers don't receive their items or claim the transaction was unlawful. All qualified transactions, such as tangible products, tickets, services, or travel, are covered by the Seller Protection.

This service is for free, and it applies to all PayPal transactions. It works in three easy steps:

  1. If a customer files a claim or a payment reversal, then PayPal may impose a temporary hold on the money.
  2. The seller will then be required to supply details such as proof of shipment or evidence of delivery within the time frame communicated which is usually 7-10 days.
  3. As soon as PayPal has confirmed that your transaction is eligible, you'll then be able to access the funds.

What goods are eligible

The Paypal Seller Protection Policy covers the security of physical goods and is not just limited to digital items or services so long as the goods in question can be sold and shipped with proof of delivery. Although sellers should take note that the policy has limitations concerning the following:

  • Tangible goods such as clothes, toys, electronics, car parts, etc.
  • Services such as yoga classes, website design, etc.
  • Tickets for concerts, shows, sports events, etc.
  • Travel services such as trip reservations, flight or hotel booking, etc.

Requirements to qualify

Although it applies to all PayPal transactions, sellers must meet certain requirements to qualify for the PayPal Seller Protection, which includes the following:

  • Sellers must submit a legitimate proof of shipment or proof of delivery to PayPal

  • Sellers must produce legitimate proof of shipment or delivery that indicates that the item was sent to the buyer less than two days after the PayPal dispute or reversal notification in the case of an Unauthorized Transaction claim. For example, suppose PayPal alerts you of an Unauthorized Transaction claim on September 1. In that case, sufficient proof of shipping must show that the item was dispatched to the buyer by September 3 to be eligible for PayPal's Seller Protection program.

  • Except for products subject to the Intangible Goods Additional Requirements, the item must be a tangible thing.

  • Check the status of your shipment.

    Make sure the item is shipped to the address specified in the transaction information, and save the proof of delivery.

  • Keep the transaction proofs.

    In the case of ticketing, travel, and services, PayPal may request any necessary proof of delivery documentation or evidence of service use in the event of a disagreement.

  • Respond as soon as possible.

    If PayPal asks for documents or other pertinent information, sellers are expected to answer within ten business days.

  • Make certain it is eligible.

    The payment must be identified as "eligible" or "partially eligible" on the Transactions Details Page."

Additional requirements for Item Not Received claims.

As for the additional requirements for items that claim to have not been received. Sellers must meet both the basic and additional standards given below to be eligible for PayPal's Seller Protection program:

  • The payment must be declared "eligible" or "partially eligible" for PayPal's Seller Protection on the transaction details page if a buyer files a chargeback with the issuer for a card-funded transaction.
  • Sellers must produce proof of delivery.

How to establish proof of Shipment or Delivery

One of the best business practices is to always document everything that goes on througout the shipping process, especially the proof of shipment or delivery. The following are the requirements that sellers must present to qualify for the PayPal Seller Protection:

Physical Goods

Under Proof of Shipment

Documentation from a shipping firm, either online or in-person, includes:

  • A trackable number that can be found online.
  • Date of delivery
  • Documentation with the recipient's address that matches the shipping address on the transaction details page

Under Proof of Delivery

Documentation in the form of online or physical copy from a shipping company that includes:

  • A verifiable tracking number
  • The date of delivery with the "delivered" status present with regards to the item or service.
  • The recipient's address with the following information: the city, country, or postal zip code (or international equivalent).
  • The signature confirmation with the full amount of the payment, including the shipping and taxes, exceeds the fixed amount listed in the signature confirmation table.

For reference, the signature confirmation is online documentation that is viewable on the shipping company's website.

Intangible Goods

Proof of shipment or delivery for intangible or digital products is compelling evidence that the item was delivered or the purchase order was completed. Sellers must present a system of records documenting the date the item was sent, as well as the fact that it was either:

  • If applicable, electronically delivered to the recipient, providing the recipient's address (email, IP, etc.)
  • The receiver has received or accessed the information.

Transactions and goods ineligible

Now that we've covered the goods and services eligible under the PayPal Seller Protection, let's cover what is not eligible. This includes the following:

  • Items that sellers' have personally delivered (or are picked up)
  • Goods that are digital (music, computer game downloads, and licenses for digital content).
  • Claims or chargebacks from products falsely advertised.
  • Payments made that aren't through PayPal.
  • Residential property is included in real estate.
  • Except for light recreational vehicles (ex. bicycles and wheeled hoverboards), and others that are not limited to motor vehicles (ex. motorbikes, recreational vehicles, aircraft, or boats).
  • Corporations (buying or investing in a business)
  • Machinery used in the manufacturing industry
  • Payments equivalent to cash, such as gift cards and prepaid cards with stored value.
  • Payments received in exchange for gold (whether in physical form or exchange-traded form)
  • Any type of financial product or investment
  • Art, antiques, or collectibles that are either in physical or digital forms and represented by a Non-Fungible Token (NFT) amounting to USD 10,000 or comparable value in local currency calculated at the transaction.
  • Gambling and/or any other form of entertainment.
  • Payments collected through crowdfunding or crowdlending, as well as donations
  • Payments to a government agency, a state-run entity (excluding state-owned firms), or third parties connected to a state-run body or government agency
  • Any payment to a bill-paying service

Secure protection and automation

Sellers not only need to feel secure about their payment options, but they should also be able to rest easy in automating their business. With OneShop, sellers enjoy useful features to help manage their business, like providing the flexibility to cross-list their listings on multiple platforms such as Poshmark, Mercari, Depop, Tradesy, and more marketplaces soon.

It also covers a wide variety of features for sellers to enjoy. From tracking sales, creating objectives, ordering shipping supplies, scheduling package pickups, to finding an item's Registration Number.

Put it to the test and register for free to enjoy a 7-day trial!

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