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November 30, 2021

How Long Does Paypal Hold Money? 5 Common Causes For Holds And How To Get Your Money Faster

PayPal is an online payment service that makes sending and receiving money secure and easy. If you’re a small business owner or sell goods online, PayPal is an invaluable tool.  However, many PayPal users face a common problem: payment holds. 

Waiting for money to clear in your PayPal account can be nerve-wracking. You may be worried about how long it will take to get your money (and whether you'll receive it at all!)

Luckily, with our step-by-step guide, there's no need to stress. Read on to learn everything you need to know about preventing a payment hold on your account and getting your money faster with PayPal if you’ve experienced a payment hold.

How Long Can PayPal Hold Money?

If your PayPal balance is marked as pending or on hold, you’ll be able to see how much money is in the account, but you won't be able to withdraw it. 

PayPal can put holds on accounts to ensure that sellers have enough money in their PayPal account if an issue comes up with the order (like if a customer requests a refund, for example). 

According to PayPal, holds can last up to 21 days, permitting there are no additional issues with the transaction.

However, there are ways to release the funds sooner. If you want to access your money quicker than the 21 days, it’s important to understand why PayPal may be putting your account on hold. 

Why Does PayPal Put Payments On Hold?

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Payment holds can be frustrating—especially if you’re unsure why your money is pending in the first place. Below are 5 common reasons why your account may be put on hold.

You're A First Time PayPal Seller.

If you’re a new seller on Paypal or it’s your first PayPal transaction, your funds may be placed on hold so that PayPal can verify your identity and that your business is legitimate.

To build up your reputation, you should ensure that buyers receive the goods they ordered on time and in good condition. Once you develop a history of positive buyer-seller relations, this shouldn't be an issue—as long as your customers are happy with the product, PayPal will eventually update your status as an established seller.

Your PayPal Account Has Been Inactive.

Having a dormant account can also result in a payment hold. If you've been inactive on PayPal for a while, your status reverts back to that of a first-time seller. 

You'll have to rebuild your history of positive transactions if you want your funds released quicker.

You've Had Multiple Customer Complaints.

Dissatisfied customers and negative feedback can also result in a hold on your PayPal account. If multiple customers have left negative feedback, it could temporarily put your account in jeopardy. 

Here are some common buyer-seller issues that may affect your reputation with PayPal:

  • A customer files for a refund (the buyer requests a refund from their bank).
  • A customer files a chargeback (the buyer requests a refund from their card issuer).
  • A customer files a dispute (the seller and buyer must dissolve the issue).

Buyers can file these claims when:

  • The product is not received on time or at all. 
  • The product is not as described.
  • The transaction was unauthorized.

To avoid customers filing for refunds, disputes, and chargebacks, make sure your products are delivered on time and that they have accurate descriptions.

You're Selling Higher-Risk Items.

According to PayPal, higher-risk items are qualified as gift cards, travel packages, tickets, computers, and consumer electronics.

These items are considered risky because it is harder to verify whether they are legitimate— this means that there is a higher chance that they may be fake or counterfeit.

You Have an Unusual Selling Pattern.

If PayPal detects changes in your selling pattern, they may hold your funds. 

PayPal may flag the following practices as unusual:

  • A significant spike in selling price.
  • An increase in overall sales.
  • An unusual change in the product you are selling.

How Do I Access My Payment And Get My Money Faster?

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There’s nothing worse than seeing money in your account but not being able to access it or send it to your bank account. 

Fortunately, there are a few things you can do to expedite the release of your funds and prevent holds from happening in the future. 

Pay Attention To Notifications From PayPal.

Image credit: PayPal-Community.com

PayPal will contact you if your account is on hold so keep a lookout to see if PayPal has sent you any important messages regarding your account or shipment. This may be a notification on your account page or an email. 

If you're marked for any of the problems listed above, you'll have to provide additional information about your business for PayPal to release the hold. 

The faster you respond, the faster you should be able to access your funds. 

However, there are also preventive measures you can take to avoid a payment hold and expedite the release of your money before the 21 days. 

Add Tracking Information To Your Packages.

Image credit:RazorPay.com

To add tracking information to your packages, all you have to do is print a USPS or UPS shipping label and PayPal will provide you with a tracking number. 

Tracking information includes the order status and delivery confirmation so that you can easily keep track of when your buyer receives your goods.

Once you have tracking information set-up, PayPal should release your money within 3 days of delivering your package.

Have Good Customer Service Practices.

Image credit: ProductManagementFestival.com

Make sure you respond to customers quickly and that your product is accurately described. These policies will prevent refund disputes and improve the buyer-seller relationship. 

The last thing you want is a customer filing a dispute or chargeback after receiving your product. Any buyer dispute can negatively impact your business. 

Here are some practices that PayPal recommends for keeping customers happy:

  • Post accurate photos and detailed descriptions so customers know exactly what product they are getting.
  • Be transparent with customers about shipping costs and provide an accurate timeline for when they should receive their goods (tracking is helpful for this!)
  • State your return policy upfront to prevent refunds disputes.
  • If you have an emergency that may delay the shipment, set up a customer service message on your page to keep your customers up-to-date.

Types Of Gated Categories

Is PayPal money available immediately?

If no issues arise with your order, your PayPal balance should take 3-5 business days to transfer to your bank account. 

However, if your account is on hold or pending, it can take 21 days for the hold to be released, granted there aren’t any additional issues with your PayPal transaction.

Why is my PayPal money on hold?

Here are five common reasons your PayPal money may be on hold:

  • You’re a first time PayPal seller.
  • Your PayPal account has been inactive.
  • You've had multiple customer complaints.
  • You’re selling higher-risk items.
  • You have an unusual selling pattern.

If any of these apply to you, look at our guide above for more detailed information on what the problem may be with your account.

How do I get PayPal to release my money?

Paypal should release your funds within 21 days. But if you want to expedite the process, make sure that you pay attention to any alerts on your account overview page or emails from PayPal. If there is an issue with your transaction, they will need you to provide additional information to lift the PayPal hold.

PayPal also recommends adding tracking to your package using one of their approved couriers. They can provide you with a USPS or UPS shipping label so that you can track your goods.

Conclusion

Image credit: BusinessInsider.com

If you’re a small business owner, whether on eBay, Etsy, or other e-commerce platforms, PayPal is a valuable tool for sending and receiving money. You can securely send money worldwide and build your business online, all for small or no fees. 

And, better yet, you can even use PayPal to make money!  

Whether you’re an established seller or just getting started with your e-commerce business, it's important to pay attention to PayPal’s guidelines. That’s why we’ve provided our tips and tricks above—so you don’t have to deal with the headache of a PayPal payment hold. 

So use our guide to fix your payment hold and get your funds quickly from PayPal today! 

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Mike Vestil

About the Author

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

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