Identified Scam:

How to Avoid PayPal Shipping Label Scams: Top Tips

PayPal is a convenient way to pay for online purchases and has a reputation for safety and security. But scammers still find a way to use PayPal to help them steal products.


Verified.org
Updated 25 May 2021
How to Avoid PayPal Shipping Label Scams: Top Tips
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Identified Scam:

Key Finding

Scammers buy items for sale via PayPal then offer to provide the shipping label for their product, only to reroute the delivery then claim they never received it.


Key Risk

The scammer will request a refund via PayPal, putting you out both your money and your item.

Sections on this page
  1. What is the PayPal Shipping Label Scam?
  2. How to Beat and Avoid a PayPal Shipping Label Scam
  3. Examples of PayPal Shipping Label Scams
  4. What to Do If You Fall for a PayPal Shipping Label Scam
  5. Frequently Asked Questions

PayPal shipping label scams can be beaten by simply buying your own shipping labels for items. Even if someone offers to pay for shipping, you should never accept a shipping label for them as this gives them the power to reroute the package then claim they never received it.

What is the PayPal Shipping Label Scam?

A scammer will try to get a product for free in this type of scam by taking advantage of a seller through shipping services and Paypal’s Seller Protection Policy. Let’s look at how the PayPal shipping label scam works.

A Buyer Purchases Your Item and Asks You to Use their Prepaid Shipping Label

Most buyers want what you have for sale and don’t mind paying for it. Other buyers, well, let’s call them thieves, never intend to pay. But everything will seem normal—they may even get to the checkout or win your eBay auction—until the next step.

The buyer could give you many reasons for using their shipping label. For example, they may claim that they get better shipping rates, so they would rather use their service. They may even offer you more than you are asking for the hassle. Once you agree, the buyer will complete the purchase using PayPal.

Example Message from Scammer

Please can I provide you with a shipping label for the item I purchased? I have great rates through my company so can save on postage if you use it. I can email it to you and all you need to do is attach it to the box and send it.

The Buyer Reroutes the Package to a New Location

Once the buyer uses their own shipping label, they control the shipment since they are technically the "sender." They may route it to a non-existent shipping address. The shipping company will not be able to deliver it. They will then call to correct the address. They may not use the shipping address that is on the PayPal receipt. Either of these tricks results in the same thing.

The Buyer Gets Their Money Refunded—You Lose Your Money and Item

All the buyer has to do to get their money back is file a complaint with PayPal—they simply have to say they never received the item. If the product was not shipped to the address on the PayPal receipt, then the buyer will win their claim.

If the scammer reroutes the shipment, you, as the seller, can’t prove that the buyer received it. PayPal’s policy will refund the purchase price to the buyer even though the buyer also has the item.

You also won’t be covered by PayPal’s Seller Protection Policy because it requires that purchases must be shipped to the address on the Transaction Details page.

How to Beat and Avoid a PayPal Shipping Label Scam

The best way to avoid this scam is never to allow buyers to provide their shipping label if they purchased something from you using PayPal. Instead, refuse to use their shipping label, and if they are adamant, cancel the transaction altogether.

To avoid falling victim to this PayPal shipping label scam, always follow these best practices:

  • If a buyer asks to use their own prepaid shipping label, don't. Even if they claim you'll save on shipping costs, don't buy into it.
  • Only ship products to the address shown on PayPal’s transaction detail page.
  • Insist on a signature confirmation on delivery of high-value items.
  • Conduct transactions through a PayPal merchant account to be covered under PayPal’s Seller Protection policy.
  • Block customers that make fraudulent claims or who file disputes. They will only try again.

Ship with PayPal

Take advantage of PayPal's integrated shipping system, which automates the process for you. Your shipping labels will be pre-populated so you can be sure there are no errors, and your tracking information will be automatically stored.

Red Flags of PayPal Shipping Label Scams

When selling items online, it’s important to remain cautious as scammers are everywhere. There are a few red flags to look out for when completing transactions using PayPal, including:

  • A buyer who insists on providing you with a prepaid shipping label to use. While this may seem helpful, it’s a major red flag of someone trying to scam you out of your item and money.
  • A buyer’s profile with very few details or hardly any ratings/feedback.
  • A relatively new buyer’s profile.
  • A persistent and pushy buyer—they will use a sense of urgency, even offering more money for your item.

Examples of PayPal Shipping Label Scams

The core indicator of this scam is that a buyer will ask to use their own shipping label or service, but scammers will use various techniques to trick you into doing it. They may send you a message like this  to get on your good side:

Hi, I love all the items you have for sale. I noticed one in particular that I would really like to buy, but I only have enough for the purchase price. I am a seller myself, have my own shipping account, and could use the credit I have there. So if I could send you the shipping label, I would buy it from you today!

They might try another tactic, giving you reasons why their PayPal account address may not match the shipping address or name:

Hi, my PayPal account still has my Mom and Dad's address on it, and I live halfway across the country from them. Could you ship it to my address? I can send you the label.

Other scammers may try to offer you extra money to convince you to use their shipping label:

I noticed you have a Blue Widget for sale. I will pay you double the shipping price if I can use my own shipping label.

What to Do If You Fall for a PayPal Shipping Label Scam

Unfortunately, if you’ve fallen for this scam, there’s very little chance you’ll get your item back. Additionally, PayPal’s policies will protect the buyer (i.e., the scammer) since the records show that you didn’t send the item to the correct address.

The only fortunate thing is that you will only be out the cost of the product purchased (i.e., stolen) by the buyer. Although it’s still unfortunate, at least the scammer doesn’t have access to your credit card details or can scam you out of more money.

There are a few things you should do after falling for this scam:

  • Contact the authorities with all the information you can get from the PayPal transaction and the site where the scammer made the purchase offer.
  • Report the scam to PayPal via the Resolution Center—although PayPal’s Seller Protection may not cover the transaction, it’s still worth reporting.
  • If you are selling products at an online marketplace or auction, contact the website's support staff to see what you can do about the scammer.
  • If the website has community forums, write about your experience there, so other sellers know what to look for.
  • If you have a way of commenting on a user or giving feedback, explain your experience on the buyer's profile.

Frequently Asked Questions

How does the PayPal shipping label scam work?

Scammers will buy your items via PayPal then ask you to use their shipping label. Once you ship the item, they will reroute the package then claim they never received your item. PayPal will grant a refund since the tracking will show that the package wasn't sent to the correct address. 

How do I beat the PayPal shipping label scam?

The number one rule when selling items online is always to use your own shipping labels. If you use a shipping label provided to you by a buyer, you are opening yourself up to this scam.

Can I make shipping labels through PayPal?

Yes. This is best practice when it comes to shipping items via PayPal. PayPal's system will pre-populate shipping addresses based on your orders then save the tracking information. 

Are there other PayPal shipping scams?

Yes, there are other shipping scams that target PayPal users. Some involve buyers asking you to wire money to their shipping company of choice, while others may order items through a hacked PayPal account.

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