PayPal Request for Additional Information Due to Increase in Payment Volume

A spike in sales is a good scenario for many online entrepreneurs.  When sales are up it means there are more clients returning to place new orders and there are new clients placing their first order in your business.  It represents that your clients trust your website more compared to your competitors. While this can be good for you, an increase in sales volume can also have a negative effect in your business especially if you use PayPal for your payment solutions.  When your sales volume increase, PayPal is alerted and it starts asking questions.  Unless these questions are answers, PayPal may place your funds on hold which may affect your cash flow.

In line with its policy, PayPal may place the funds of its clients on hold because of what it perceives as risks.  Because of increase in our sales volume, our PayPal account was put on hold and we were asked to respond to certain questions.  Below is the email we received from PayPal.

As part of PayPal’s commitment to providing the best possible experience for buyers and sellers, we perform routine reviews of merchant accounts. In a review of your account, we noticed an increase in your payment volume. To complete our review and better understand your business, we need your assistance in collecting the following information:

1. Provide an explanation of the recent increase in volume processed within your PayPal account and your expected monthly volume going forward.

2. Provide an explanation of the recent increase in refunds within your PayPal account and the steps that you are taking to reduce your disputes and/or chargebacks going forward.

3. Provide a written statement detailing your refund policy.

4. Describe the duration of time needed to complete providing your service after you are paid by buyers.

5. Provide a written statement detailing your customer service policy.

Please send us an explanation if you’re unable to supply any of the requested information. Please log into your account and visit the Resolution Center. Please respond by 29/12/2016 to avoid any service interruption. If you have any questions, please feel free to contact us.’

Upon receiving these questions, we immediately sent our response.   Fortunately, PayPal was satisfied with our explanation.  Within 3 days from sending our email, we received an email below and our account was placed on regular standing.

Our review is complete and we have returned your account to regular standing.
We appreciate your patience and thank you for your help in making PayPal the safest and most trusted online payment solution.

If you are a new entrepreneur and you regularly experience increase in sales on certain months of the year there are several things you can do so PayPal will not freeze your account:

1. Contact PayPal Customer Service in advance and let them know in advance that there will be an increase in sales volume in the coming months.

2. Maintain more than 1 PayPal business accounts and make sure you use these accounts alternately during the peak season to control the increase in payment volume for all your business accounts