Getting to know Seller Protection

Sep 22 2021 | PayPal editorial staff

If something goes wrong with a sale, it shouldn’t impact your bottom line or profitability. Here at PayPal, we understand that you make your sales in good faith, so Seller Protection looks after you if you receive an unauthorised payment or a shipment goes awry.
Seller Protection applies to your eligible sales automatically. You just need to meet a few simple requirements and respond to our requests for information promptly so that we can determine your eligibility and release any held funds to you.

So what is Seller Protection?

PayPal Seller Protection safeguards your business against loss to chargebacks and reversals related to unauthorised transactions and claims that items weren’t received. It applies automatically to PayPal sales, and there’s no limit to the number of payments we’ll protect.

How does it work?

When a claim or chargeback is lodged, we’ll usually place the associated payment on hold in your account until the issue has been resolved. This makes sure the funds are available in case they need to be returned to the buyer.
We’ll then ask you to provide some further information about the transaction, including proof of shipment or compelling evidence that the service was fulfilled. We’ll usually require this information within 7 days of our request – keep an eye on the deadline we give. With this information, we’ll determine if the sale is eligible for Seller Protection and, if it is, we’ll release any held funds back to your PayPal account.
Learn about proof of shipment and compelling evidence requirements on our Seller Protection page.

What’s eligible?

Seller Protection has been recently expanded to now include both tangible and intangible goods. Seller Protection applies to unauthorised payments and transactions reversed due to suspicion of fraud, as well as claims items weren’t received where you can provide proof of shipment or fulfillment.
It’s available when the buyer pays from their PayPal account for:
  • Physical goods (clothes, toys, electronics, car parts, etc.)
  • Services (yoga classes, website design, plumbing repairs, etc.)
  • Tickets (concerts, shows, sport events, etc.)
  • Travel (transport, accommodation, etc.)
Other eligibility requirements apply. Please see our User Agreement for further details.

How do I get Seller Protection?

If you’re selling tangible items and receiving payments with PayPal Checkout, Website Payments Standard or PayPal Invoicing, you’ve already got Seller Protection. It applies automatically to your sales when your buyers log in to their PayPal accounts to pay you. There's extra criteria for businesses selling intangible goods, so get in touch with our sales team on 1800 729 725 to discuss eligibility options.
If you’re using one of our other payment solutions, like Website Payments Pro, Braintree or Payflow, get in touch with our sales team on 1800 729 725 to learn about our other options and see if it makes sense for your business to make the switch.

How do I maximise the benefits of Seller Protection?

When you accept PayPal, not only can you keep your sales protected against loss, you open your business to more than 200 million PayPal customers around the world and can enjoy improved conversion rates. Consider prioritizing PayPal at checkout to give your customers more confidence to shop with you or adding One Touch to improve mobile conversion and maximise the number of transactions covered by Seller Protection.
Learn more about Seller Protection and, for full terms, see our User Agreement.
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial and legal advice before making any business decision.

Frequently asked questions.

Chargeback Protection is an opt-in risk product that helps eligible merchants reduce the risk of fraudulent credit or debit card transactions. We’ll help protect your Advanced Credit and Debit Card transactions from or “item not received” chargebacks, and once you submit the info we need, we’ll waive the chargeback fee and remove the hold on the dispute amount. Read the Terms and Conditions for Chargeback Protection.
This feature is only available for business accounts with Advanced Credit and Debit Card checkout.

Which merchants are eligible for Chargeback Protection?
To be eligible for Chargeback Protection, a merchant must have a PayPal business account and have enabled Advanced Credit and Debit Card checkout.

How can a merchant apply for Chargeback Protection?
Merchants can apply for Chargeback Protection from within their PayPal account. Simply click on 'Manage Risk and Fraud' in the Payment Preferences section within Account Settings and select Chargeback Protection. Terms apply.

How does Chargeback Protection work?

We’ll help provide risk decision-making on all your Advanced Credit and Debit Card transactions and decline potentially fraudulent payments. If an approved transaction is later identified as fraudulent, it will be chargeback-protected once the info we need is submitted.
  1. We’ll monitor Advanced Credit and Debit Card checkout transactions
  2. We’ll review those transactions for risk of fraud
  3. We’ll waive any chargeback fees and remove the hold on the disputed amount if a transaction is later found to be “unauthorized” or “item not received” upon our review of the info requested from you.
How does a merchant end Chargeback Protection?
You can end Chargeback Protection anytime. There are no yearly caps on ​losses, no fixed duration,​ revenue requirements, or cancellation fees. Merchants simply need to click on “Manage Risk and Fraud” in the Payment Preferences section within Account Settings and select “No protections right now."

How much does Chargeback Protection cost?
Chargeback Protection0.40% per approved transaction

*Fees are subject to change.
What info must a merchant provide in connection with an eligible chargeback dispute?
If a chargeback occurs, merchants must submit proof of shipment /delivery as requested by the Resolution Center to qualify for Chargeback Protection.
What types of transactions are eligible for Chargeback Protection?
Chargeback Protection applies to PayPal Commerce Platforms Advanced Credit and Debit Cards (ACDC) checkout. Exclusions apply.

What types of chargebacks are eligible under Chargeback Protection?
Chargeback Protection is only offered for “unauthorized” and “item not received” chargebacks. You must still respond to these chargeback disputes in the PayPal Resolution Center to get the benefits of Chargeback Protection.

What types of chargebacks are not eligible under Chargeback Protection?
All chargebacks other than “unauthorized” and “item not received”, such as “broken item”, “significantly not as described,” “refund not processed”, and “duplicate charge”, are not eligible for Chargeback Protection. You’re expected to respond as usual to these chargeback disputes in the PayPal Resolution Center.

What are the differences between Chargeback Protection and Fraud Protection? 
Chargeback Protection Fraud Protection 
Chargeback Protection is a built-in, risk decisioning tool available to eligible PayPal merchants for a fee.Fraud Protection* is a built-in, fraud analysis tool provided to ACDC PayPal merchants at no rate.
PayPal uses risk models and analysis in real-time to accept or reject transactions based on their risk level.   Merchants set risk rules and filters within the Fraud Protection tool, determining which orders to accept or reject.
PayPal will waive any chargeback fees and will release the disputed amount to the merchant for any “unauthorized” or “item not received” chargebacks that may later occur upon receipt of the requested information from the merchant.Merchants carry the liability for any chargebacks that may occur when using Fraud Protection.
*When you sign up for Chargeback Protection, we’ll automatically disable Fraud Protection on your account. You’ll no longer have access to the Fraud Protection dashboard if you are enrolled in Chargeback Protection.
Chargebacks happen when your customer disagrees with a credit card charge and asks the credit card provider for a refund.

Customers initiate chargebacks for a variety of reasons:
  • An item is different from its description or is defective.
  • An item hasn’t been received.
  • A credit card charge isn’t recognised.
  • A payment is processed multiple times.
  • A payment is unauthorised.

You can learn how to avoid disputes and chargebacks on our website.

If a buyer files a claim, chargeback or reversal against you, we’ll place a temporary hold on the funds in your PayPal account. This’s done to ensure that you’re aware of this and there are sufficient funds available to cover the full amount of the claim, chargeback or reversal.

To resolve the case, you need to submit the necessary documents required in the Resolution Centre. We’ll also need the following documents from you as proof of shipment:

  • For an unauthorised transaction, proof of shipment is required.
  • For items not received, proof of shipment or proof of delivery is required.
We'll review and determine whether the transaction meets the eligibility requirements for Seller Protection. If it does, we will lift the temporary hold on the funds and restore the funds to your account. Otherwise, the funds will be returned to the buyer’s account. A fee may apply in a chargeback case.

Learn more about Seller Protection in Australia.

With PayPal, you can enjoy a safer and easier way to send and receive payments for goods, services and more.

Shopping globally with peace of mind
Simply link a card to your PayPal account and you can start making payments in over 20 currencies. Instead of entering your card information for every transaction, you can now pay with just a few clicks without compromising your security. You can also withdraw funds into your bank account anytime. We use industry-leading anti-fraud technology and a dedicated team of risk experts to help keep your transactions safer.

Growing your sales from various channels
Select from our wide range of payment solutions to receive payments from buyers all over the world. Accept safer payments anytime, anywhere – through your own website, using PayPal Here in your storefront, or by simply emailing an invoice to your customers. Besides our expertise in payment security, our Seller Protection protects you from any losses arising from unauthorised payments and items not received on eligible transactions.

Find out more about how we protect you.

The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.