Tom-Chris Emewulu
Chargeflow's Digital Evangelist
Table of contents
Getting banned from PayPal is the worst nightmare for e-Commerce business owners.

The internet is replete with saddening stories of merchants banned from PayPal due to excessive disputes.

Here’s one case study we culled from the PayPal Community platform: 

“PayPal has banned my account permanently and holds $1900 for 180 days before I can get it back. I sold memorabilia to somebody in person a couple of months ago. The client asked if they could pay me with PayPal, and I said yes. Two days later, [the client] purchased something else under the same conditions. One day, weeks later, I received a message that he opened a case with PayPal saying I never shipped his goods. I explained to PayPal that this was an in-person transaction.
He also reported to his card company. I’ve been using paying for years and have done hundreds of transactions, so I assumed they would treat me well. You cannot reach anyone on the phone because of the pandemic, but they started calling me to collect my negative balance every day. I needed to do an outgoing transaction on PayPal, so I transferred the money into the account that was in the negative and $1900 for my transaction; after getting off the phone with PayPal collections and them assuring me I would have access to my money.
They held the money for three days before permanently banning me and telling me I can’t get my money for 180 days. Now I am out of memorabilia, the money I was paid for it, and an extra $1900 is on hold for 180 days.”

The above is not an exceptional case of someone that was banned from PayPal due to excessive dispute. There are very many other similar instances.

But as you would’ve also guessed, there's always another side to every story. In this post, we shall examine why you can be banned from PayPal and how to deal with it. 

Sample message of account limitation from PayPal
Sample message of account limitation from PayPal

Things that can get you banned from PayPal

PayPal has outlined various actions or business practices that could land you in trouble on their platform. Below are is a quick listicle of things that could get you banned.

1 - Your PayPal account has excessive disputes and chargebacks

The first and the most apparent reason you can be banned from PayPal is when your account has excessive PayPal disputes and chargebacks. In this case, PayPal will temporarily freeze your account to investigate the dispute, preventing you from withdrawing, sending, or receiving money. 

According to the company, having limitations in your account does not necessarily mean that you’ve done anything wrong. But it's a way to help protect both the buyer and the seller. However, this can result in a permanent ban if they deem it fit. And yes, they can do that according to their User Agreement, which states thus:

“PayPal, in its sole discretion, reserves the right to terminate this Agreement, access to its website, or access to the PayPal Services for any reason and at any time upon notice to you and payment to you of any unrestricted funds held in your Balance.”

Here’s another story from the streets:

“I’ve had a VIP account for 12 years but suddenly got banned for life without warning. I spoke to lots of (quite helpful) people at PayPal who seemed as baffled as me. Finally spoke to someone in the US who said I’d received a payment from a client ten months ago who was under investigation for something they couldn’t tell me, and therefore I was banned for life to ‘shut down the chain.’”

2 - You violated PayPal’s Acceptable Use Policy

Apart from excessive chargebacks and PayPal disputes, other serious issues can result in your being banned from PayPal.

These reasons include activities that:

  • Violate any law, statute, ordinance, or regulation.
  • Relate to transactions involving (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety, (b) drug paraphernalia, (c) cigarettes, (d) items that encourage, promote, facilitate or instruct others to engage in illegal activity, (e) stolen goods including digital and virtual goods, (f) the promotion of hate, violence, racial or other forms of intolerance that are discriminatory or the financial exploitation of a crime, (g) items that are considered obscene, (h) items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction, (i) certain sexually oriented materials or services, (j) ammunition, firearms, or certain firearm parts or accessories, or (k) certain weapons or knives regulated under applicable law.
  • Relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or Ponzi schemes, matrix programs, other “get rich quick” schemes, or certain multi-level marketing programs, (c) are associated with purchases of annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card, (d) are for the sale of certain items before the seller has control or possession of the item, (e) are by payment processors to collect payments on behalf of merchants, (f) are associated with the sale of traveler’s checks or money orders, (h)involve currency exchanges or check cashing businesses, (i) involve certain credit repair, debt settlement services, credit transactions or insurance activities, or (k) include offering or receiving payments for bribery or corruption.
  • Involve the sales of products or services identified by government agencies to have a high likelihood of being fraudulent.

How can you avoid getting banned from PayPal?

Looking at the case studies above, it's wise to do everything you can to avoid getting banned from PayPal.

First, make sure that you read PayPal’s privacy policy and stick with it. Also, make efforts to protect yourself from PayPal disputes ahead of time. For example, if you find that you are getting up to 10 chargebacks and PayPal disputes per month, you should get a PayPal Dispute Automation Service. And Chargeflow has developed the world’s smartest dispute resolution tool to help you boss your way through every PayPal dispute.

Our software leverages artificial intelligence and machine learning to recognize when a dispute on a payment occurs, and fight those PayPal disputes and chargebacks as you’d wish. We help e-commerce businesses win more Disputes and Chargebacks without lifting a finger.

Chargeflow makes it easier for you to run and scale your business without worrying about PayPal chargebacks and disputes weighing you down. We do all of the work; you get all of the wins. Don’t take our word for it. Take the word of clients for whom we’ve recovered over $10.5M in disputes.

The Chargeflow Difference

With Chargeflow, you could recover a lot more money and save hundreds of hours each month.

But there’s more. Every customer gets a 9x ROI, a guaranteed Industry-Leading Win-Rate, and 100% Automated Dispute Management; no intervention needed. Don't delay. Sign up with our freemium packages and you’d be glad you did! Start here >>


Average Dispute Amount
Average Dispute Amount
# Disputes Per Month
# Disputes Per Month
Time Spent Per Dispute
Time Spent Per Dispute
You could recover
$500,000 and save
1,000 hours every month with Chargeflow!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Want to learn how Chargeflow can recover more money for you? Sign up and get a free dispute analysis

Related Articles

What's Chargeflow?

Try it for free

Full Dispute Automation

No more manual work, Chargeflow fully-automates your dispute process from A to Z.

Simple Integrations

We use official and secure API's from our approved partners. We also made it extremely easy to connect.


You get charged only when we help settle a dispute in your favor.


ChargeResponse® uses smart algorithms to generate the most comprehensive evidence response, with industry-leading recovery rates.


ChargeScore® uses proprietary algorithms to determine the chance of recovering each dispute.

Actionable Analytics

In-depth disputes statistics at your fingertips.

Built for eCommerce

Made by DTC Entrepreneurs, for DTC Entrepreneurs.


OAuth 2.0, 128 Bit SSL, secure data encryption, official, secure API's. We have them all, and more.

Get Started with Chargeflow

Chargeflow helps you focus on your business without the burden of disputes, chargebacks and fraud holding you back.

With a fully-featured, automated dispute management solution that offers flexible workflows and unique features such as ChargeScore®, ChargeResponse®, along with our ROI guarantee and actionable analytics, all of your dispute needs are met in one simple platform.