For most online stores, PayPal is the main method of accepting payments, so having your account frozen could be a disaster.
If you can’t accept payments, you might as well give up. You are unable to profit. To add insult to injury, PayPal’s user agreement forbids you from creating a new account while your old one is inactive due to a suspension.
Reader demand prompted me to write this comprehensive analysis of the various scenarios in which PayPal might terminate your business account and associated email.
We’ll also go over the fundamental procedures that will help you avoid having your PayPal merchant account suspended. What to do if PayPal has already suspended your account is covered as well.
Explained: why PayPal might freeze your account
Firstly, it’s safe to assume that PayPal would rarely freeze merchant accounts and its actual email address.
While the statement above may be true in theory, it seems to run counter to the experiences of a number of PayPal customers when you read through merchant complaints posted on the PayPal community, Reddit, and Quora. Here’s an illustration:
My PayPal account was unexpectedly locked out of nowhere recently. This Steam account was made so that I could purchase hosting for my ARG, as well as SSL certificates, and other related items.
As soon as I activated my PayPal account, I received numerous donations all at once. Gbor (Hungary): “It gives me a hard time because I will shortly be unable to pay the bills for my site because the PayPal “Support” Team has refused to tell me the reason why they blocked my account.”
But if that’s not the norm, then why would PayPal do something like suspend your account?
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Several factors contribute to this.
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Okay, let’s use Gbor’s problem as an example. If a new or existing account receives a suspiciously large sum of money or a fraudulent transaction, PayPal reserves the right to suspend the account in question.
In terms of regulatory security, it raises some red flags. According to the company’s representative, this helps PayPal reduce fraud and guarantee that the service lives up to the standards of its various constituencies.
As a result of the unusually large influx of funds and the suspicion surrounding the transaction, Gbor’s PayPal account was frozen.
However, there are other scenarios in which PayPal could terminate a business’s account. There could be a number of reasons for this, including a high volume of chargebacks, the use of a suspicious email for registration, a high volume of customer disputes, a low credit score, and/or customer complaints lodged with PayPal about your business.
Furthermore, if you receive lottery winnings on a credit card, sell drugs, or engage in other illegal activities using your PayPal account, PayPal may suspend your account.
Furthermore, if your PayPal account is not fully verified, has details that are inconsistent with a scam email, you or someone else logged in from an unusual location, or there is some fraudulent activity going on in your account, PayPal will suspend your account.
A free PayPal account shouldn’t be frozen without a good reason.
In some cases, the exact reason PayPal has suspended an account is unclear. In the past, product launches were often met with account freezes due to a sudden influx of purchases (especially from overseas).
With the passage of time, PayPal has improved its ability to identify fraudulent transactions. However, if an account is deemed “high risk,” usually due to an excessive number of refunds or customer disputes, it will be temporarily closed.
Many customers still find PayPal to be the most convenient payment method, so if at all possible, you should accept payments through that service.
Just make sure it’s not your only defence against chargebacks and that you’re taking other measures in the meantime (and disputing them when they do happen).