Article Summary

PayPal Seller Protection safeguards merchants against losing money to chargebacks and reversals related to “Unauthorized Transaction” or “Item Not Received” claims. To be eligible for coverage, a transaction must meet a number of basic requirements, as well as conditions for the specific type of claim. This guide explains the rules governing PayPal's Seller Protection program, plus what you need to do to receive seller protection if a qualifying claim comes up.

With PayPal's Seller Protection program, we want to make it easy for you to be protected. There's no charge for this service, and there's no limit to the number of payments PayPal will protect, as long as the transactions meet the requirements.

To receive coverage, you need to follow some simple rules. Make sure you follow the requirements described below before you ship an item.

What are the steps I need to follow to be covered under Seller Protection?

There are only two steps to follow:
  1. Check that your transaction is Seller Protection eligible. You will find eligibility information on the Transaction Details page.

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  2. If the transaction is eligible, check if you meet the requirements described below.

What are some types of buyer complaints that can cause claims or chargebacks?

  • Unauthorized Transaction: The owner of the account claims that he or she did not authorize the payment.

  • Item Not Received: A buyer pays for an item but claims he or she did not receive it.

  • Significantly Not As Described: A buyer receives an item that is significantly different than what he or she ordered. For example, your customer ordered a red sweater and received a blue sweater. These claims are not covered by Seller Protection and require you to respond to the complaint with your evidence.

What will happen to my money in this process?

The complaints described above may reduce your PayPal balance. But with Seller Protection, provided that the transactions meet our requirements, PayPal will protect you by keeping your balance intact – meaning you get to keep your money and won't be required to pay any fees.

During our review of the complaint, the money for the disputed transaction may be temporarily unavailable to you. If the dispute is decided in your favour, the money will be available in your PayPal balance.

What are the requirements for Seller Protection?

Initial Requirements

  1. Ship to the address on the Transaction Details page.

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  2. The item sold must be a physical, tangible item that can be shipped. This means intangible items such as digital goods and services are not covered.

  3. You must respond to PayPal's request for documentation and other relevant information in a timely fashion, typically within ten business days.

  4. Your permanent address (as listed in your PayPal account) must be in Canada.

  5. Depending on the claim type, whether the claim is "Item Not Received" or "Unauthorized Payment," there are additional requirements listed below.


Additional Requirements

For "Item Not Received" complaints:

  • The payment must be marked "eligible" or "partially eligible" on the Transaction Details Page.

  • You must provide Proof of Delivery as described below.

For "Unauthorized Payments" complaints:

What is Proof of Delivery?

Proof of Delivery for tangible items is online documentation from a shipping company that includes all of the following:
  • The item's status as delivered.
  • The date the item was delivered.
  • The recipient's address, showing at least the city and province, or city and country, or postal code (or international equivalent). The address information on your shipping receipt must match the address on the Transaction Details page.
  • Signature Confirmation, as described below, if the full amount of the payment, including shipping and taxes, is greater than $850 CAD.

Proof of Delivery for intangible or virtual items or services is online documentation that the item or service was provided to the buyer, such as evidence that a file has been downloaded as of a particular date. Note: Although PayPal Seller Protection does not apply to intangible or virtual items, or services, having proper Proof of Delivery can help a Seller win a buyer’s claim that an item has not been received (INR).

What is signature confirmation for transactions of $850 CAD or more?

Signature Confirmation is an online documentation that can be viewed at the shipping company's website and indicates that the item was signed for on delivery. Signature confirmation is required for transactions, including shipping and taxes, that are $850 CAD or more.

What is Proof of Shipment?

Proof of Shipment is online or physical documentation from a shipping company that includes all of the following:
  • The date the item was shipped.
  • The recipient's address, showing at least the city and province, or city and country, or postal code (or international equivalent). The address information on your shipping receipt must match the address on the Transaction Details page.

How do I provide Proof of Delivery or Proof of Shipment?

Go to the PayPal Resolutions Centre, where you will be guided for the exact steps on how to provide the Proof of Delivery or Proof of Shipment. We will communicate the timelines to you during the process.

What isn't covered by Seller Protection?

Seller Protection offers coverage for most PayPal transactions, as long as they follow the requirements explained in the previous sections. However, there are also some instances where Seller Protection doesn't apply:
  1. Claims that are filed because the item is significantly different from how you described it – for example, if you described a new item but sent a used one.
  2. Intangible purchases, which include services, digital goods, etc.
  3. Items picked up locally or in person.
  4. Transactions made through Virtual Terminal.
  5. Instances where you receive multiple payments for an item.
  6. Claims filed directly through an eBay account.
  7. Prohibited items, such as drug paraphernalia, ammunition/firearms, or counterfeit goods.
  8. Items that are not shipped to the recipient's shipping address on the Transaction Details page. If you originally ship the item to the recipient's shipping address on the Transaction Details page but the item is later redirected to a different address, you will not be eligible for PayPal Seller Protection. We therefore recommend not using a shipping service that is arranged by the buyer, so that you will be able to provide valid proof of shipping and delivery.

These terms of coverage and eligibility requirements can also be found in our User Agreement online.

What can you do after a claim arises to be covered by Seller Protection?

Please log in to your account and check if the transaction is eligible or partially eligible. Even if the transaction is not eligible for Seller Protection, it's to your benefit to respond in the Resolutions Centre, where we'll be better able to help you through the claim.

If your claim is eligible, you'll need to meet the requirements described above.

The bottom line

Before you send the customer their purchase, look on the transaction details page to see if this transaction is eligible for Seller Protection.

  • If your transaction is eligible, you can take advantage of Seller Protection by following the steps described in the requirements section. Enrollment in Seller Protection is automatic and free.
  • If your transaction isn't eligible or is only partially eligible, review these orders for fraud more carefully since you are responsible for any problems/losses that could occur on these transactions.

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