When it comes to dropshipping stores, Paypal seems to have some reservations. Despite being one of those global payment gateways that make money transfer across the countries possible, Shopify store owners along with many other dropshippers seem to face payout issues. 

It can happen that after a buyer purchases a product through Paypal from your shop, and the payment service might take 21 days before the money shows up in your account in certain cases. You only get access to the fund when there is confirmation from the buyer’s side that the item has been delivered in the condition it was promised. While that is certainly the case, it doesn’t mean you can’t accelerate the process through certain methods. 

What Is Causing Paypal To Withhold Your Money? 

There could be a number of reasons for it. Let’s take a look at some of them. 

1 . Disputes

Paypal has a heightened interest in your customer service and the quality of the product they are helping you sell. Unfortunately, it is impossible to avoid disputes in the dropshipping business. A dropshipper has no say on the product quality, shipping time, or the inventory for that matter. Your customers could raise disputes such as the product is broken, quality is bad, that it never reached them or that product doesn’t match the description and image. 

You will have to be diligent with customer care in this case. Otherwise, a dispute will be raised by the customer in hopes of getting a refund. For Paypal, they allow about 2 percent of disputes to be made to an account. Any more and they will either limit the functions of the account, put it on hold, or permanently disable it unless the issue gets resolved. 

Offers and incentives are some of the ways the disputes raised to your account can be reduced. Make use of those facilities. Otherwise, heighten your customer service skills. Be ready with a plan every time an issue is raised by a customer. 

2. New Business

This is a cautionary measure from Paypal’s side. If you are a new dropshipping store owner using Paypal, the payment gateway might feel you can’t be trusted yet. As a result, they will put your payment account on hold. You will first have to build up a good reputation amongst your customers and show that your store can be trusted to deliver good quality items on time. Once your store builds credibility, Paypal will be more inclined to change your payment status.

3. Lack of Transaction

You might be in possession of a Shopify or other similar dropshipping account for some time, but you haven’t been paying attention to your store and have made no attempt to sell anything. Thus, Paypal has no records of successful transactions or of old ones. As a result, they aren’t sure of your commitment to your trade and feel it is better to hold your payment until you prove yourself trustworthy. 

4. Risky Products

Sometimes, Payal just assumes the product you are selling has more chances of reaching in damaged condition than not. In that case, they feel it is better to wait for confirmation that the product has reached its buyer in good condition, and only then will they release the money back into your account. 

By risky products, we mean electronic items, tickets, musical instruments like Guitars, which can be damaged at the slightest wrong handling. 

How To Build Your Paypal Credit To Avoid Withholding Of Money? 

There are three important steps you can take to make sure your money doesn’t stay in Paypal reserve for days. These steps will make your credit in Paypal stronger. 

1 . Confirming Order

This is the method that can take days at first. However, if your buyers keep on confirming that they are receiving their products in good condition, Paypal will see no reason to withhold your payments anymore. 

Basically, you ask your customers to send a confirmation immediately after receiving the item. As Paypal keeps on getting prompt approvals, they realize your dropshipping store can be trusted. 

2. A Shipping Label

For this method, you will have to make use of Paypal’s own shipping label. If you print a  USPS or UPS label from them, the delivery confirmation along with the tracking number will be received by Paypal on its own. If no accidents occur while the package is delivered, it will take up to 3 days before the fund gets reflected on your account. 

3. Tracking Details

Say, you use other platforms to print the shipping label. Instead of using Paypal, you are using a shipping label of your own. Well, in that case, update your tracking information to Paypal. This will allow Paypal to verify the time of shipping of the package along with when the delivery is finally made. If you are using Shopify for dropshipping, there is the Super Paypal plugin. This plugin installs the orders and tracking ID on its own without any intervention from you. 

Final Thoughts

Well, we hope your confusion as to why Paypal is holding out on your payment is finally resolved. Now that you know, it shouldn’t take long to make the necessary changes so that your store manages to earn Paypal’s trust. Remember, these kinds of issues can’t be solved in a day. This is the kind of work that needs your dedication to the store and fair trade practices on your side. 

On that note, if you are a Shopify store owner and need someone to help build your store, Jag&Wolf can act as the perfect guide for that. The company will take care of the smallest details so you don’t have to deal with issues such as payment withholding in the first place. On the chance you do, you will always have a guide who will help you out in dealing with these problems. 

If you need help building and scaling your online store, we reccomend Pathway, which will keep you on track, give you monthly goals, dashboards, tips and the ability to spy on your competitors. Pathway will also serve as your educational and operational dashboard.

Click the link below if you use Shopify https://apps.shopify.com/pathway

Click the following link for any other e-commerce solution including Amazon. https://pathwaycommerce.com