What is PayPal Seller Protection Policy & How Do Shopify Merchants Benefit from it?

The PayPal Seller Protection Program helps merchants boost their confidence in operating their stores by protecting online Sales, and minimizing claims, disputes, chargebacks, and payment hold, through this program securing all order transactions free from PayPal high-risk.

What is PayPal Seller Protection  Policy & How Do Shopify Merchants Benefit from it?
Activate PayPal Seller Protection Policy - Protect your Shopify Stores from claims, disputes, chargebacks, and payment hold - https://apps.shopify.com/paltrack

How many PayPal orders have you received in a day? How are you at Protecting your business?

As an entrepreneur running a business requires a lot of effort, time, and money. You need to consider the positive movements of your cash flow daily. This is why it is vital to make sure that your order transactions are correctly managed and aren't tagged as PayPal Red flags or at the High-Risk level.

A great thing about using PayPal is they provide a program not only protects the buyers but also secures the business of the Sellers.  The PayPal Seller Protection Program helps merchants boost their confidence in operating their stores by protecting online Sales, and minimizing claims, disputes, chargebacks, and payment hold, through this program securing all order transactions free from PayPal high-risk.

Being qualified for PayPal Protection will allow you to begin establishing confidence with both your clients and PayPal.

The bad thing about receiving PayPal Red Flags is that it trapped you for probably 80% of your revenue and not only that you will not also be compensated for fulfilling customers' orders. It's so upsetting.

Thanks to PayPal Seller Protection, when you earn the trust of your payment provider you will avoid having to deal with those red flags, PayPal holds, disputes, chargeback, and other fees associated with it.

What is PayPal Seller Protection Policy?

The PayPal Seller Protection is designed to compensate you on the full amount of the payment even if you receive an unauthorized payment, a dispute of items not received, chargebacks or reversals.

This means that you can confidently boost your store without worrying about your backend process.

PayPal seller protection Shopify: the complete guide
PayPal seller protection Shopify, the complete guide in conducting online business with peace of mind and confidence. A guide in aligning your PayPal Protection.

What are the Benefits PayPal Seller Protection Policy?

  • Save your Business from loss of income you will be paid for every order you fulfilled even your customer's files for claims or disputes you cannot win.
  • Less Risk to your Business PayPal will automatically protect you from the following:

> Items are Not Received when your costumes pay for an item and claim that they have not received the package.

  > Significantly Not As Described: This is the most common complaint. Customers receiving the order differ somewhat from the descriptions and pictures on the product page. Merely the physical attributes of the Item (s)

  • Scale your business with confidence This enables you to be self-assertive during every transaction. Be at ease knowing that PayPal protects all of your eligible transactions, allowing you to concentrate on other business-related activities.

Note: PayPal will always verify your proof of Shipment.  Be sure that your courier actually shipped the package to your corresponding customers. PayPal will request you to send “ Proof of Shipment” as a basis that you are a reliable seller and that you actually shipped the item and promptly responding to the Paypal documentation request will enable your PayPal Seller Protection

How can I enable PayPal protection for each transaction I make?

You will automatically be eligible for the PayPal Seller Protection program if you can provide Proof of Shipment by submitting valid Tracking Information to every fulfilled order.

Paltrack Sync Paypal Tracking

Paltrack is a solution developed to sync fulfilled orders tracking information between your Shopify store and your PayPal account, and keep in sync PayPal order status in real-time and on autopilot.

Paltrack Shopify PayPal Tracking Sync App

What is Proof of Shipment?

Online or physical documentation from a shipping company that includes all of the following:

  1. Date of Package Shipment.
  2. Customers' or Recipients' addresses include the Suburb, City and state, country, and Zipcode. The information on your shipping receipt must match the address on the Transaction Details page.
  3. Valid Transaction details that can track the status of Shipment

What is Proof of Delivery?

A physical record provided by a shipping company proving the recipients received the packages that include all of the following:

  1. Status of package delivery and date of delivery.
  2. The recipient’s name and address must match based on the specified Transaction Details page (including name, address, city, state, zip code, etc.)
  3. Signed confirmation on the package delivery.

For intangible or virtual items “Proof of Delivery” means any compelling proof to show the purchase order was delivered or fulfilled, that includes but is not limited to the following:

  1. The date of package or service was provided.
  2. Applicable customers or recipient’s information address (email/IP, etc.)

Providing valid tracking numbers to PayPal is a must. PayPal automatically notifies customers that their order status has been recorded as shipped by PayPal tracking and they can follow their delivery using the provided tracking number.

In this way, you are creating rapport with your customers which results in customers' satisfaction and loyalty by keeping them informed on the status of their package by monitoring the given tracking information.

What type of complaints/disputes/chargebacks does PayPal Seller Protection cover and what should Shopify merchants be aware of?

  1. Item Not Received when your customers pay an item and claim that they have not received the package. Fraudsters may assert that an order wasn't received and then file a dispute with PayPal or their credit card company.
  2. Unauthorized transactions customers think and believe that their PayPal account(s) have been used without her permission. Customers have 60 days after the transaction first showed on their bill to report it to PayPal.

Make sure you've provided the proper proof of shipment or proof of delivery and submit tracking information consistently for each order to prevent losing your money. Failure to provide the necessary documents Seller Protection won't pay for your damages.

A Step-by-Step Guide On How To Win An “Item Not Received” PayPal Dispute As A Seller
PayPal puts reserves on your account to ensure that there will be enough funds to cover any unresolved disputes and to protect the buyer’s interests in general. To prevent account limitations, you should simply act and respond to your buyer as soon as possible after receiving any complaint.

What are the requirements to be eligible for PayPal Seller Protection Policy?

  1. Your PayPal account must have a U.S.-based main address.
  2. Items must be physical/ tangible that can be shipped. The address on the Transaction Details page must be used for shipping.
  3. Proof of Delivery or Proof of Shipment on Intangible  items
  4. Confirmation Signature on the delivery/ shipment package considering item paid in full.
  5. You must respond to PayPal documentation without delay through PayPal Resolution Center.

What Type of transaction is NOT covered or eligible for PayPal Seller Protection?

  • Donations
  • Gift Cards and other related items
  • Items / Products that are for pickups or deliveries made in person.
  • Business-related to digital goods such as music or computer game downloads.
  • Claims or chargebacks on item(s) that are different from how it was described or are labeled as counterfeit.
  • purchase of any form of investment or financial product.
  • Transaction payments are not made through a PayPal account.
  • Items that are sent after PayPal has advised the Seller not to release the item.
  • Proof of Delivery are not matched the stated  “Transaction Details” page and items not shipped

Certainly, PayPal managed all the information from businesses worldwide that use their Platform. This is why PayPal uses AI like any other business in its PayPal Server to automatically handle security measures about your business account because manually checking the data would take too long.

Furthermore, PayPal AI's ability to confirm your shipments with the courier depends on data points (accurate tracking information). You will be able to activate Seller Protection as soon as PayPal AI has gathered enough data points.

The common problem of Shopify merchants is the submission of tracking information. S​ending the correct tracking information for each order will take huge amounts of time if done manually. That’s why it’s highly recommended to use a Shopify app that can send tracking numbers to PayPal on autopilot.

One of those automated solutions is Patrack. The best thing about Paltrack is that it secures your healthy relationship with PayPal. It helps sellers activate Seller PayPal Protection without putting effort and getting 100% PayPal Trust. By Using Paltrack everything is automated giving you ample time to spend on other business tasks without worrying about the backend process.

Can I add Tracking Details to PayPal Manually?

As an online entrepreneur, you need to carefully spend your time scaling your businesses and keep you in the competition. We all know that your PayPal tracking Information can be added manually, however it's a tedious and complicated process. Here are the steps on how to do it.

  1. Go to your PayPal “Activity” Page.
  2. Yur will be directed to all your transaction.
  3. Find the transaction/s you want to update, then click the drop-down menu and choose "add tracking to PayPal."
  4. Input all the shipment details and all other tracking-related details.
  5. Select service or virtual products and confirm/update the status.
  6. Hit Submit Tab
  7. Repeat the process of each order transaction.


The goal of this article is to emphasize the importance of activating PayPal Seller Protection for all of your orders and how to completely create PayPal trust. I hope we have elaborated and explained well in this post.

Without it the Paypal Seller Protection you will be susceptible to PayPal chargebacks, disputes, holds, and red flags and this is very harmful to your business.

Lastly, since not everyone finds it simple to submit tracking information for each order, it is strongly advised to use a Shopify plugin solution such as PALTRACK that automatically submits tracking information to your PayPal account Autopilot.

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