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PayPal & Stripe

How Long Does PayPal Hold Money

If you are a new business on PayPal, there is a good chance you won’t be immediately paid for each order thanks to a PayPal hold. This usually happens when PayPal needs time to verify you as a trusted seller.

To build more trust with PayPal, make sure that you fulfill all of PayPal Seller Protection requirements. In this way, you can get paid instantly without any holdup.

So the question is how long does PayPal hold money and what are the types of payment holds?

What are the different types of PayPal holds?

1. PayPal Limitations hold

Such payment holds are common for new sellers just starting out their business on PayPal. By building a strong track record of transactions, you will no longer face such holds.

PayPal may place a payment hold on your account if something very unusual occurs such as:

  1. You suddenly see a massive spike in sales, or if you change your average selling price.
  2. A change in your average selling price.
  3. You changed your business selling platform.
  4. You changed the type of item being sold.

In this case, PayPal holds 100% of your money for about 3-5 days wherein withdrawals and transactions are completely unable to take place.

2. Jumpstart hold

This usually happens after PayPal finishes verifying each of your transactions during the limitation holding period. What happens is a certain amount of money is held from your account for about 21 days.

At times, sellers have also had to wait for over a month until PayPal was able to correctly verify that the customer had received their product in its promised condition.

3. Rolling reserve

The most common type of reserve is indeed the rolling reserve wherein a percentage of each transaction is held by PayPal.

For example, you made $10,000 USD today. 10% of that amount ($1000) is going to be held from you for 45 days.

4. High-risk item

Sometimes the nature of the product you sell can play a defining role in how quickly you receive your funds.

Items such as tickets, consumer electronics, computers, gift cards, and travel packages are highly susceptible to being fake, fraudulent, stolen, or damaged.

As a result, the PayPal hold will exist so that the customer’s money is put inside a reserve in case they want a refund.

How long does PayPal hold money and what can you do to solve this problem?

In most cases, PayPal will release your funds after 21 days of hold as that is enough time for a customer to request a refund or file a dispute.

Some sellers have had to wait up to 180 days before they could get their money out of the lockup. However, the good news is, you will not have to wait that long!

The two most important steps you can take are:

1. Add tracking information to unlock Seller Protection for each order:

It is possible to manually add the tracking information for each order but this will take up time and cause lots of headaches in the process.

Here’s how you do it:

  1. Open PayPal and open the “Activity” page.
  2. You will be presented with a list of all your transactions. 
  3. Find the transaction that you wish to update and select “add tracking” from the dropdown list.
  4. Fill in all the details regarding the shipment carrier and all other relevant tracking information.
  5. Select “order processed” if you are selling an intangible product.
  6. Submit the form. Now your customer will receive an email that includes a tracking number, order status, and the details of the shipping company.
  7. Repeat this process for each transaction

The easiest way to add tracking information on autopilot:

UpTrack – the best shopify app to automatically sync tracking numbers with PayPal.

UpTrack is the only app that supports both payment gateways (Stripe and PayPal).

  • The best part is that UpTrack saves time by sending and uploading all your tracking numbers in one single click.
  • Don’t worry about scaling your store as UpTrack can sync up to unlimited trackings a month at a very affordable rate.
  • UpTrack automatically syncs tracking info to payment gateways for all your fulfilled orders after every 20 minutes.
  • Since UpTrack helps in building trust with payment gateways, transactions will be protected by Seller Protection.
  • By automating the entire process, UpTrack enables its users to spend their time on other important areas.

2. Print a USPS or UPS shipping label from your PayPal account

By submitting a shipping label, PayPal can directly verify with the courier whether or not the product has been shipped.

At times your courier will have their own website or system which generates tracking numbers for each of your orders.

These tracking numbers can be used by your customers to track the whereabouts of their purchases.

How to avoid having a PayPal hold in the future?

  1. The most important thing you can do is to cooperate with PayPal whenever they send you an email. These email messages usually indicate that something is going on with your PayPal balance. By reading what PayPal says you will learn what caused the hold and how to prevent it in the future. 
  2. Post clear descriptions and images of the product you are selling.
  3. ALWAYS send PayPal tracking information for each of your orders. If you don’t have the time and expertise to do this all day, use a Shopify app such as Uptrack that does this for you on autopilot.
  4. Have a well-written return policy so that your customers can know exactly what to expect when buying a product from you.
  5. Always be responsive and attentive to what your customers have to say about their orders.

Why is it best to use UpTrack, especially for an AI-powered platform such as PayPal?

The thing is PayPal cannot manually verify the information provided by thousands of businesses across the globe. That is why they rely on PayPal AI to automate this task.

PayPal AI relies on data points (correct tracking information) to verify your shipments with the courier. As soon as PayPal AI collects enough data points, you will be able to unlock Seller Protection.

The problem is, that sending the correct tracking information for each order will take huge amounts of time. And, that’s where UpTrack comes in and saves the day!

Conclusion

I hope today’s post explained exactly how long does PayPal hold money and why.

Yes, it can be quite scary to not see your profits for up to 90 days.

However, with the use of UpTrack, all of your orders will be protected by Seller Protection. This significantly reduces the amount of money that is going to be held from you by PayPal.