30 May 2023

Top Strategies to Avoid PayPal Holds and Enhancing Seller Protection


PayPal has revolutionized the world of online payments, making it easier than ever for merchants to receive money from customers. However, like any payment platform, it has its share of challenges.

One significant pain point for merchants is having their funds held by PayPal. This post will discuss why PayPal holds your funds, how to turn up Seller Protection, minimize the chances of fraudulent orders and chargebacks and the importance of syncing tracking information of shipped orders to your PayPal account.

Money Holds in PayPal: A Merchant's Nightmare

One of the most frustrating experiences for a merchant is when their hard-earned money gets held by PayPal. Money holds occur when PayPal temporarily restricts access to funds in a merchant's account to ensure that there are enough funds to cover potential financial risks such as chargebacks, claims, or disputes. These holds can last up to 21 days, depending on various factors such as the merchant's history with PayPal, nature of items being sold, selling pattern etc.

While PayPal implements these holds to protect both buyers and sellers, they can cause significant cash flow issues for merchants, especially small businesses that rely on a steady stream of income to maintain their operations.

Understanding the Reasons Behind PayPal Holds

To better manage and potentially avoid PayPal holds, it's essential to understand the reasons behind them. Some common factors that can trigger a hold include:

  • New sellers or those with limited selling history: PayPal may place holds on new accounts or those with little to no selling history to protect buyers from potential fraud.
  • High-risk industries: Some industries, such as electronics and event ticket sales, have higher rates of chargebacks and disputes, which may result in holds.
  • Sudden changes in selling patterns: A sudden increase in sales, higher-value transactions, or a change in the type of items being sold can raise red flags, leading to holds.
  • Poor performance metrics: Merchants with a history of disputes, chargebacks, or customer complaints may experience holds more frequently.

Enabling Seller Protection: Reducing Chargebacks and Fraud

To alleviate some of the issues associated with money holds, PayPal offers Seller Protection, a program designed to protect merchants from chargebacks, claims, and reversals. By meeting certain requirements, such as shipping to the address on the transaction details page and providing proof of delivery, merchants can qualify for Seller Protection. This protection can be particularly helpful in cases where a buyer claims they did not receive the item or that the item was significantly different than described.

Additionally, merchants should take the following steps to reduce the risk of chargebacks and fraud:

  • Clearly describe the item or service being sold, including any potential limitations or defects. Providing accurate descriptions can help avoid disputes related to items being "not as described."
  • Communicate promptly and professionally with buyers to address any concerns or issues. By maintaining open communication channels and responding to customer inquiries in a timely manner, merchants can proactively address potential issues before they escalate into disputes or chargebacks.
  • Implement Chargeback Protection, such as PayPal's Chargeback Protection, which helps identify and prevent fraudulent transactions. This service analyzes each transaction and provides merchants with risk assessments, allowing them to make informed decisions about whether to proceed with a sale.
  • Use a secure and reliable shipping method with tracking capabilities. By using a shipping method that offers tracking, merchants can provide proof of delivery and reduce the likelihood of chargebacks or disputes related to non-delivery of items.

Syncing Tracking Info : Ensuring a Smooth Cash Flow

One of the most critical aspects of ensuring successful transactions and reducing disputes is syncing the tracking information for shipped orders with PayPal. By providing tracking information, merchants can prove that the item was shipped and delivered to the buyer, thereby reducing the likelihood of disputes and chargebacks. To sync tracking information, merchants should follow these steps:

  • Obtain a tracking number from the shipping carrier.
  • Log in to their PayPal account and navigate to the transaction in question.
  • Click "Add Tracking Info" and input the tracking number and carrier information. By keeping the tracking information up-to-date in PayPal, merchants can provide a better experience for their customers and protect themselves from potential disputes.

PaySync : Auto Sync Tracking Numbers to PayPal

While manually syncing tracking information can be time-consuming and prone to human error, you can eliminate all those factors and concentrate on growing your business with peace of mind.

PaySync, an app available on Shopify app store, automatically syncs tracking numbers of shipped orders to PayPal in real-time. It is easy to set up and user-friendly. With PaySync, you can get your funds released within 24 hours of delivery. By adding tracking information to PayPal, you can turn up Seller Protection, Chargeback Protection, and get your funds released 10x faster.

Best Practices for Maintaining a Healthy PayPal Account

In addition to the strategies mentioned above, merchants can follow these best practices to maintain a healthy PayPal account and minimize the risk of holds:

  • Keep your personal and business information up-to-date: Regularly update your contact information, business details, and financial data in your PayPal account to avoid potential issues.
  • Monitor your account activity: Regularly review your account for any unusual transactions, unauthorized access, or other potential signs of fraud. Respond promptly to PayPal requests: If PayPal requests additional information or documentation, provide it as soon as possible to avoid delays or holds on your account.
  • Offer excellent customer service: By providing top-notch customer support, merchants can reduce the likelihood of disputes and maintain positive relationships with their customers.


While money holds can be a significant pain point for merchants using PayPal, there are ways to mitigate their impact. By automating the process of syncing tracking information to PayPal account, merchants can enable Seller Protection, Chargeback Protection, reduce fraud, minimize risk of disputes and ensure smoother transactions. By following these best practices, merchants can make the most of PayPal's platform while safeguarding their businesses and maintaining a positive cash flow.

PaySync is designed to sync tracking numbers to your PayPal & Stripe accounts in real time. Our aim is to accelerate fund release, bypass holds/disputes, and build PayPal trust. Enjoy the simplicity of one-click syncing, enhancing your merchant reputation effortlessly.