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Top 5 Recommendations on How to Avoid PayPal Blocking Your Account

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What we have learned from our experience with PayPal clients is that limitations on PayPal accounts always come for a specific reason, but sometimes the PayPal user cannot easily understand it. It’s quite valuable to have a partner like VR Team to guide you through the requirements of a PayPal account running so that you don’t allow limitations to happen especially when your core business day-to-day operations depend on that.

Having limitations on an account doesn’t necessarily mean that you’ve done anything wrong. In most cases, accounts are just temporarily limited until PayPal makes sure your activity is up to their standards. If this period takes too long, it will also mean a sudden drop in sales for you as a merchant.

Here are our top 5 recommendations on how to avoid PayPal blocking your account:

1. Verify your account: To avoid limitations make sure you verify your account by providing all the required information on time. Linking your bank account or debit card to PayPal should be enough to verify your account. However, the necessary information may vary by user, region, and individual factors of your company.

2. Keep your account information up to date: Make sure your personal and business information including your name, address, email, and phone number is accurate and up to date. It applies even more to business accounts. If your company is in front of a merger or acquisition, be sure to inform PayPal in advance if there are any forthcoming changes in the legal representative or the contact information.

3. Respond promptly to PayPal requests: If PayPal requests additional information or verification, respond promptly to avoid account limitations or restrictions.

4. Monitor your account. Keep an eye on your account and transactions to detect any suspicious activities or unauthorized transactions.

5. Follow PayPal’s acceptable use policy and use the platform only for legal transactions. Avoid engaging in activities that violate PayPal’s terms of service. This is not an exhaustive list, but the following might be interpreted as violations:

  • Logging into your PayPal account from an unusual location: If you happen to be not even close to your usual log-in location, feel free to inform PayPal beforehand using the contact form when you are logged into your account. It will not harm and will not take too much of your time as well.

  • Unusual or changed selling patterns, such as an unusual spike in sales. If you intend to launch a promotional campaign or a new product in a higher price range, it’s much better to inform PayPal in advance of your plans and expected deviations from the usual daily/weekly turnover. Otherwise, a sudden spike in sales, nonetheless desired and well-grounded, would raise a red flag and PayPal might issue a warning for limiting your account.

  • A significant number of chargebacks or disputes. The most common reasons for disputes are: Item not received (INR) when the buyer is claiming they ordered and paid for an item but didn’t receive it and Significantly Not As Described (SNAD) when the buyer states the item they received is significantly different than they expected, based on the merchant’s description. Merchants usually consider that the acceptable chargeback rate is 1 % as a standard threshold. However, Visa and Mastercard set their own acceptable thresholds which are lower than that. Their so-called “early warning” ratio is 0,65 %, i.e. the number of incoming chargebacks you receive each month, relative to all the transactions you processed during that period should not exceed 65 out of 1000 transactions. There are other constraints and factors which should be taken into consideration, such as total transaction count per month, the average amount of transactions, and other particular card network requirements. Overall, our suggestion is to keep a very close eye on disputes and chargebacks and use PayPal’s dispute management tools and advice.

As a bonus, we would like to share some insights on another specific type of limitation our clients’ experience on their PayPal accounts, and that is the rolling reserve. Account owners can still operate with the account, it is just partially blocked. PayPal may set this rolling reserve to any account as a risk management tool to protect the system from potential losses due to chargebacks, refunds, or other types of disputes. By setting rolling reserves, PayPal needs to ensure that they have a buffer to cover any potential losses, and thus help ensure the long-term stability and security of the PayPal platform for all users.

Rolling reserves are a percentage of each transaction that PayPal holds in reserve for a period of 90 days usually. During that times the funds are not available for withdrawal and the reserve amount is updated with each new transaction. You can expect that PayPal should set a rolling reserve for high-risk accounts or accounts that have a history of high chargeback rates. But it could set up such a reserve to a new account as well. The reserve amount and duration may vary.

Benefits of working with VR Team

So, in a nutshell, when a company turns to us asking “How to avoid further blocking of my PayPal account?” our advice would be: learn the rules of the game and stick to them.

Choose a valuable partner like VR Team who would cut your costs by half through our payment expertise, flexibility, readiness to get the job done, and sufficient focus on your PayPal issue.

Your business should grow, and we can help this happen.

Contact us at


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