PayPal Protection for Buyers and Sellers: Keeping You Safe

The great thing about using PayPal when buying or selling things is that you're (for the most part) protected from fraud and scammers.
Updated 8 September 2021
PayPal Protection for Buyers and Sellers: Keeping You Safe

United States Online Shopping Scam Statistics 2020

$246 million lost
352k fraud reports

70% of total losses

Source: 2019-20 Consumer Sentinel Report

Sections on this page
  1. PayPal Buyer Protection Program
  2. PayPal Seller Protection Program
  3. What If You’re Not Covered by PayPal Protection?
  4. Frequently Asked Questions

To create a safer environment for its buyers and sellers, PayPal protection is offered by the company to both buyers and sellers to:

  • Secure transactions
  • Protect financial information
  • Prevent fraud
  • Resolve disputes

PayPal Buyer Protection Program

PayPal’s Buyer Protection program safeguards buyers from paying for items that don’t match their descriptions or from getting charged for products they didn’t order.

What's Covered by PayPal Buyer Protection

  • Items not as described: Anything that falls under “false advertising,” such as ordering a physical disk for a piece of software but only getting a download link.
  • Items described as “new” but are used: “New” items that show obvious signs of wear and tear may also be covered.
  • The wrong number of items: If you receive more or less than what you ordered.
  • Missing parts
  • Damaged items: Including items damaged during shipping.
  • Counterfeit items: Any items considered counterfeit or knock-off when they were advertised as the real deal.

Avoid Scams When Shopping Online

Always read item descriptions carefully. Scammers can often put fine print on their listings, making your claim ineligible for a refund.

What’s Not Covered by PayPal Buyer Protection

  • Motor vehicles.
  • Real estate.
  • Prepaid cards.
  • Custom-made goods that are significantly not as described.
  • Items that violate PayPal’s policies.
  • Industrial machinery.
  • Items purchased in person (not over the internet).
  • Send Money transactions to friends or family.
  • Disputes that are submitted after the 180 days post-purchase if the item was not received or wasn’t as described.
  • Claims of unauthorized transactions made more than 60 days after the transaction date.
  • Items accurately described by the seller.
  • Donations, which include those made to crowdfunding campaigns.

How to File a PayPal Buyer Protection Claim

If you get an item that doesn’t match the description—or you didn’t order it at all—you can file a claim within 180 days of when you purchased the item to get a refund. This also applies to damaged or malfunctioning items, and their condition was misrepresented in the listing.

You should first try to contact the seller and resolve the problem that way first. If not, then you can file a claim with PayPal protection.

Documenting the details that confirm the item’s inauthenticity can help your claim go smoother.

What you’ll need:

  • A screenshot of the original product listing clearly showing how the item is not as advertised.
  • Pictures of the item you received, showing any damage and inconsistencies with the listing.
  • Screenshots of conversations with the seller, whether through email, text, or within PayPal’s system.
  • Tracking information of items.
  • Any other information that will help you prove you qualify for reimbursement.

Keep Communication Within PayPal

It’s best to communicate with sellers through PayPal’s online messaging system to make it easier for PayPal to verify discrepancies in item descriptions.

To file a dispute with PayPal Buyer Protection, follow these steps:

  • Log in to your PayPal account. 
  • Click on "Activity" to find the relevant transaction. 
  • Click on the transaction to see the information. 
  • Click on "Report a problem."
  • Follow the instructions to file your report.

PayPal Seller Protection Program

PayPal’s Seller Protection program protects the online sales of anyone who sells using PayPal and minimizes how often they get chargebacks (when the seller has to refund a buyer’s money). Seller Protection also prevents fraudulent merchants from taking advantage of PayPal’s system, making the marketplace safer for legitimate businesses.

What’s Covered by PayPal Protection?

  • Physical goods sold and shipped with proof of delivery from the U.S.
  • Most digital items and services (must meet PayPal’s requirements).
  • Items marked “eligible” or “partially eligible” on the PayPal Transaction Details page.

PayPal’s Seller Protection does not cover in-person transactions. For tangible items, they must be shipped to the customer.

What’s Not Covered by PayPal Protection?

  • Items sold that were significantly different from how it was described.
  • Counterfeit items.
  • Items delivered in person (unless paid for in-person using a PayPal goods and services QR code).
  • Sales processed outside of PayPal.
  • Gift card sales (or other sales for items equivalent to cash).
  • Donations.
  • Financial products or investments.
  • Transactions to friends and family.
  • PayPal Payouts and Mass Pay transactions.
  • Vehicles.
  • Gold sales, including via exchanges.
  • Perishable goods (e.g., food) that were not sent in an acceptable timeframe.

How to File a Claim: PayPal Seller Protection

If you’re selling on PayPal, the Seller Protection program protects you from two types of claims:

  • When a buyer claims they didn’t authorize the payment—an “unauthorized transaction.”
  • When a buyer claims they never received the item—an “item not received.”

While most of the documentation you need to prove your case may already be in PayPal’s system, you should still gather all info you have regarding the transaction, including:

  • The date you sent the item
  • The order details (confirming the buyer did in fact make the order)
  • When the payment was made
  • Tracking information for the item delivery
  • The original post for the item (showing the product description)
  • Evidence of delivery (e.g., delivery receipts signed by both parties)

You should also document conversations you’ve had with the buyer, whether through PayPal’s messaging system or via phone, text, or another messaging platform.

To file a dispute with PayPal Seller Protection, follow these steps:

  • Log in to your PayPal account. 
  • Click on "Activity" to find the relevant transaction. 
  • Click on the transaction to see the information. 
  • Click on "Report a problem."
  • Follow the instructions to file your report.

What If You’re Not Covered by PayPal Protection?

If these programs don’t cover your transaction and you feel you’ve been defrauded or are otherwise due compensation, you still have a few options.

Reach Out to the Other Party

In some cases, even if the transaction isn’t covered by one of these programs, you can reach an agreement with the other party. A polite yet professional email explaining the situation can be the first step in a resolution with a well-meaning buyer or seller. However, if you’re conducting a transaction with a scammer, you’ll be out of luck.

PayPal recommends that you always try to resolve the issue with the other party first before filing a formal dispute. 

Contact PayPal

First, even if you think the transaction isn’t covered, you can reach out to PayPal and present your case. If they can’t help you, they may be able to make suggestions based on the transaction details.

Contact Details


Verified Contact Details

It's important to verify links and contact details to beat imposters.

Contact Your Bank

As a buyer, if you used a credit card, you may be able to get a refund if you can prove to your credit company you were scammed. You should collect all documentation related to your case and present it to the card issuer.

Contact the Delivery Company

Shipping insurance can be another powerful tool. For example, if an item was damaged during shipment, but PayPal refuses to cover it, shipping insurance may be able to take care of it. This can benefit either the buyer or the seller. Shipping insurance may also help if an item was lost while in transit, but PayPal says the transaction isn’t eligible.

Report the Scam to the Authorities

If all else fails, you should arrange your documentation and contact the authorities, including:

  • Your local police
  • The Federal Trade and Commission (FTC)
  • The FBI’s Internet Crime Complaint Center (IC3)

Frequently Asked Questions

Does PayPal have buyer protection?

Yes, PayPal offers protection to buyers for eligible transactions and as long as the dispute is reported within 180 days of the transaction.

Does PayPal protect against fraud?

For the most part, PayPal does offer protection against fraud. There are some limitations to the type of transactions that are protected, and you must report issues with your transactions within 180 days. 

How much is PayPal purchase protection?

PayPal purchase protection is free. As long as your transaction meets PayPal's eligibility requirements and the dispute is found in your favor, you can be reimbursed the total amount you paid for the product or service.

Are all PayPal transactions covered under buyer/seller protection?

No, some transactions aren't covered by PayPal protection. These include (but aren't limited to):

  • Motor vehicles.
  • Real estate.
  • Gift cards and prepaid cards.
  • Items purchased in person. 
  • Transfers between friends and family.

You also need to ensure you submit a dispute report timely, or PayPal protection will not cover it.


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