PayPal's Seller Protection program may protect you from certain buyer claims, chargebacks, and reversals under certain conditions. Transactions that are not eligible for Seller Protection include: items that you deliver in person; items equivalent to cash including gift cards; PayPal Direct payments; items that are prohibited by PayPal's Acceptable Use Policy; items that are delivered or picked up locally; transactions where you don't ship to the address on the Transaction Details page; transactions where you ship to a freight forwarding company.
Sellers who believe they are protected may not realize that their specific transaction type falls outside the Seller Protection eligibility criteria, leaving them financially exposed to fraudulent buyers with no recourse from PayPal.
PayPal's User Agreement significantly affects your financial rights and access to funds — PayPal can place holds on your money for up to 180 days and limit or suspend your account at its discretion. You waive the right to participate in class action lawsuits and must resolve all disputes through individual binding arbitration, which is generally more costly and less accessible for small-dollar claims. You can opt out of the arbitration agreement by sending a written notice to PayPal's Legal Department at 2211 North First Street, San Jose, CA 95131 within 30 days of first accepting the User Agreement.