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PayPal account limitations: what are they and how to avoid them

Account limitations can impact your ability to process payments, pay vendors, and access money for other business needs. Learn more about what they are, so you can help protect your business.

What are PayPal account limitations?

PayPal account limitations are temporary restrictions that prevent you from sending, receiving, or withdrawing money from your PayPal account. Limitations can be placed on your account if there is suspicion of fraud, if your account is non-compliant with PayPal's Acceptable Use Policy, or if your dispute rate is too high.

How to check if you have account limitations in place?

If your account has been limited, you'll get an email from PayPal explaining the reason for the limitation. Log in to your account and go to the Resolution Center or click the bell icon at the top of your Dashboard for more information. This will tell you what to do to remove the limitation, if applicable.

Why do PayPal account limitations happen?

There can be several reasons for an account limitation:

Unusual account activity

If PayPal believes someone is using your account without your knowledge, the account could be limited to protect you from fraudulent charges while PayPal investigates the suspicious transactions.

Similar steps may be taken if your debit or credit card issuer or bank notifies PayPal that someone has used your card or bank account without permission.

Non-compliance with regulatory requirements

Limitations can also be placed on an account that has been found to be out of compliance with regulatory requirements. For example, if you receive donations, you're required to provide documents confirming you're a registered non-profit organization. PayPal may limit your account while you gather those documents or while working with you to satisfy any other regulatory requirements.

The same is true if you don't follow PayPal's Acceptable Use Policy — selling banned items, such as prescription drugs or guns, for example.

Excessive claims and chargebacks

When there are many buyer claims and chargebacks your account may be reviewed. During this review process, you may experience an account limitation. Issues that can be reviewed include:

  • Merchant error: Practices and policies on your part that lead to disputes
  • True fraud: Unauthorized fraud that you failed to detect and reject
  • Friendly fraud: Customers that dispute a legitimate charge

Sudden product of sale changes

If you start to sell an entirely new type of product, specifically higher-end items like jewelry, your account may be limited while PayPal investigates the change. Additionally, a rapid increase in sales volume may trigger account limitations to ensure there is no risk of error or fraud.

When does PayPal remove account limitations?

The time it takes to have account limitations lifted varies depending on the issue. The fastest way to keep the process moving is to submit the requested information as quickly as you can. Once you have, PayPal will get back to you most likely within a few days to let you know what to do next.

Here are the steps to take to remove the limitations:

  1. Go to the Resolution Center and log in.
  2. Review the requested documents and verify your account if needed.
  3. Provide all documented proof resolve the issue. Learn more about submitting documentation.
  4. If for any reason you can't complete the necessary steps to remove the limitations, contact Customer Service for help.

How to avoid account limitations

Account limitations can impact your ability to conduct business, so you should do everything possible to stay compliant. Here are five ways to avoid the most common reasons for limitations.

Meet seller protection requirements

By following PayPal's Seller Protection requirements, you'll be protected against claims and chargebacks. Seller Protection requirements include having a permanent address in the United States, shipping to the address on the Transaction Details page, capturing proof of shipment and delivery, and ensuring an item is eligible for Seller Protection before you send it. (Limits apply).

Avoid suspicious transactions

Don't sell items listed as prohibited in PayPal's Acceptable Use Policy, such as drugs, illegal items, firearms, or obscene materials. In addition, PayPal requires pre-approval to accept payment for high-risk transactions such as tickets, non-profit donations, and high-value items like jewels.

When in doubt, get approval before selling these items to avoid a hold being put on your account when you don't expect it.

Avoid unauthorized transactions

Unauthorized transactions are any transactions made without the consent of the account holder. To avoid processing an unauthorized transaction:

  • Be cautious with suspicious buyers
  • Only send a package to the account holder's address even if they ask you to forward it to a different address
  • Capture proof of delivery information to ensure the item was received
  • Require signature confirmation for high-value items
  • Verify a duplicate transaction to avoid having the second transaction disputed
  • Contact the customer to confirm the order before shipping

Mitigate “Item Not Received” claims

Fraudsters will often seek to avoid paying for an item by claiming they didn't receive the item. Too many of these claims can make your account look high risk, leading to limitations. Avoid “Item Not Received” claims by:

  • Confirming an order with the customer before it's shipped
  • Adding shipment tracking to all orders
  • Adding proof of delivery and signature confirmation to orders
  • Adding shipping insurance

Reduce “Not as Described” claims

Make sure your product listing has accurate written content, high-quality photos, and product dimensions, so that customers know exactly what they are buying. Also, give customers a way to reach out and ask questions about an item before they buy to eliminate misunderstandings. Reduce claims by:

  • Avoiding hyperbole in product descriptions
  • Adding photos of the product from several angles
  • Encouraging customers to call or email with questions before they place an order

How to avoid account limitations when traveling abroad

Traveling outside of the country may trigger a warning with your account and can lead to account limitations. You may be able to skip the hassle by following these steps:

  1. Before your trip, set up a Travel Profile in your account by logging in to your PayPal account from a trusted device, such as your home computer.
  2. Select Profile and Settings.
  3. Enter information about your trip, including the dates and location of travel. You'll also be prompted to provide a phone number and email address that PayPal can use to contact you while you're traveling if necessary.

In order to successfully set up your Travel Profile, your trip must begin within 30 days and cannot last more than one year. Your new Travel Profile will only be attached to your PayPal account and does not impact the PayPal Debit MasterCard. If you plan to use your card while traveling, give us a call at 888-221-1161 or send us an email one to two days prior to travel. We'll add a note to your account so our Debit Card Security Department knows you're on the road.

For complete information about Account Limitations, visit our User Agreement.

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