PayPal Seller Protection Policy

Last Update: May 16, 2013

1. Protection against payment deficits.

PayPal protects the recipient of a payment made by a customer (the “payment recipient”) against a payment deficit resulting from:

  1. a chargeback or reversal of payment for reason of an “Unauthorised Payment”; or
  2. a chargeback or reversal for reason of “Item Not Received” ("INR") by the buyer,

where PayPal receives from you proof that the item was posted in accordance with the requirements set forth in Section 6 below, subject to the further provision of this Seller Protection Policy (including, without limitation, the Eligibility Requirements at Section 5).

2. Which payments are protected?

All PayPal payments received from buyers for an eligible item purchased with PayPal as accepted payment. Disbursements on eBay made via PayPal are not eligible, as in connection with such disbursements on eBay no Buyer Protection claims are enforced against the PayPal Account, unless the seller consents in the individual case to a refund. This does not affect the right of PayPal to set off any available funds in the account against a negative balance (see Section 5.2 of the User Agreement).

3. How much protection is provided?

PayPal reimburses the payment recipient the payment amount subject to a chargeback or reversal and waives any Chargeback Fee, if applicable.

  1.  For “Item not Received” claims which are filed through the PayPal resolution center, there is no limit on the number of payments for which you can receive re-imbursement under the PayPal Seller Protection.
  2. PayPal Seller Protection for Unauthorized Payments and for chargebacks based on the reason of “Item Not Received” will apply unless over the past 30 days

    - the total amount of chargebacks, buyer claims (INR and/or item significantly not as described – "SNAD"), and/or reversals issued against your PayPal Account is equal to or exceeds 1% of the total payment volume received


    - is equal to or exceeds 100 cases of chargebacks, buyer claims (INR and/or item significantly not as described – "SNAD"), and/or reversals.

    If you exceed the thresholds as outlined in Section 3b) above, your eligibility for PayPal Seller Protection will be suspended for at least 90 days and payments during this period will not be covered by the PayPal Seller Protection. After such 90 days’ period, your PayPal Account may be eligible for PayPal Seller Protection for Unauthorized Payments and INR claims only if, during a 90 days period your PayPal Account meets the following conditions:

    - the total number of chargebacks, buyer claims (INR and/or SNAD), and/or reversals issued against your PayPal Account remained below 1% of the total payment volume received


    - below 300 cases of chargebacks, buyer claims (INR and/or item significantly not as described – "SNAD"), and/or reversals.

PayPal will notify you by e-mail if your eligibility for Seller Protection is declined based on the above requirements or if you may be eligible for PayPal Seller Protection again.

4. What happens in case of a Buyer Protection claim, chargeback or reversal, or claim for Unauthorized Payments?

PayPal will place a temporary hold on the payment received in case a buyer files a claim, chargeback or reversal or in case of a claim for an Unauthorised Payment. The payment recipient’s disposal of the disputed funds is restricted. If the payment is covered by PayPal Seller Protection, PayPal will release the disputed amount and restore access. If the payment is not covered by the PayPal Seller Protection, PayPal will remove the funds from the payment recipient’s Account and return the payment to the buyer. In addition, the payment recipient may be responsible for PayPal’s Chargeback Fee, if applicable. PayPal Seller Protection does not apply to Buyer Protection Claims, chargebacks or reversals resulting from the fact that the item is significantly not as described nor for items which are not shipped (e.g. have been picked up or delivered in person). For details of the temporary hold process see Section 10.1.d of the User Agreement.

5. Eligibility Requirements.

PayPal protects the payment recipient if all of the requirements below are satisfied:

  1. The item sold must be shipped (for example excluding cars, motorcycles, boats, aircrafts) and is a physical, tangible good (for example it may not be a service, download, gift voucher, ticket);
  2. The transaction must be marked by PayPal as eligible for Seller Protection in your Account;
  3. The seller has shipped the item to the address given on the “Transaction Details” page;
  4. The payment recipient is able to provide a proof of shipment, which complies with the requirements set out in Clause 6;
  5. The payment recipient has received a single payment from one registered PayPal Account for the purchase (no partial payment or payment in instalments, no down payments, no deposits); 
  6. The payment recipient responds to PayPal’s requests for documentation (such as proof of shipment) and other information that is reasonably required by PayPal to investigate the matter within the time frame given by PayPal;
  7. You must respect the requirements specified in Section 3 in relation to your PayPal Account.

6. Proof of shipment.

The seller must prove shipment of the item vis-à-vis PayPal by online or physical documentation, which fulfills the following requirements:

  1. Confirmation that the item has been shipped and date of postage;
  2. The recipient’s address (as given in the Transaction Details);
  3. Official acceptance by the shipping company (for example a receipt or online tracking information which enables PayPal to trace the shipping).


7. Additional requirements in case of Item Not Received.

For the payment recipient to be covered by Seller Protection in case of Item Not Received, the seller must ship the item within 7 calendar days after receipt of payment. This does not apply to pre-ordered or made-to-order goods that are sold on eBay where shipment is required within the timeframe specified in the eBay item listing, or, if the transaction was made outside of eBay, the shipment policy or other specification on the merchant’s website.