AbleToTrain by Willing & Able

PayPal fraud: what merchants should know

What are the most common dangers that PayPal businesses should be aware of, ranging from overpayments to delivery scams?

PayPal is one of the most prominent online payment service providers, with a total payment volume of $247 billion, and is the first choice for well-known brands as well as a plethora of smaller businesses. This behemoth has 28 million traders registered on its platform.

However, when compared to huge brands like Sony or Microsoft, smaller vendors, particularly those that sell things online as a secondary company, can not afford to hire a whole army of cybersecurity professionals to bolster their security. As a result, tiny internet sellers are more vulnerable to fraud and cyber attacks.



Overpayment scams are one of the most common types of fraud that internet vendors will have to deal with. In this case, the scammer, posing as a frequent customer, will pay an amount that exceeds the price stated by the vendor via PayPal. He will then notify the trader in question that an error has occurred and that he has paid a greater price for the product ordered, finally requesting compensation for the discrepancy. Furthermore, the fraudster will call PayPal and register a complaint, alleging numerous reasons, such as that the delivered product will be of poor quality or that the buyer did not buy anything and his account will be compromised. If the scammer becomes qualified for a complete refund in the last mentioned condition, you could lose both the money and the property.

Alternatively, the scammer may have utilized a compromised credit card or a PayPal account. If the account holder discovers that there has been unlawful activity in their accounts, they will report the issue, and you will forfeit both the purchased goods and the amount paid, as well as shipping expenses.

True errors can occur from time to time, but when it comes to extra payments, it is best to be cautious at all times. In most circumstances, an overpayment is a clear indication of fraud, thus canceling the order is the best line of action.


Is it-or not-delivered?

All shipping-related fraudsters use a variety of shipping-related fraud schemes, all with the same goal in mind: to cause wallet harm. For example, a scammer may try to persuade a business to use the scammer’s shipping account in order to gain a discount or a better price than one of the standard delivery providers. However, if the seller agrees, the scammer can easily request that the delivery be redirected to another address, allowing them to later file a complaint and claim that the products were never delivered. The vendor lacks confirmation of delivery, and the process causes him many losses, including the loss of the product.

Another popular fraud technique is package redirection. The scammer supplies an incorrect mailing address on purpose and closely monitors the internet tracking information. The fraudster contacts her with the “right” address and receives the product after the transport firm adds an update stating the shipment could not be delivered. Because there is no evidence of delivery, the same scenario as before unfolds, and the trader is once again harmed.

To avoid falling victim to these types of scams, log in to your shipping account and avoid transferring money to someone you don’t know. In addition, you should always ship the merchandise to the address specified by the buyer on the Transaction Details page. You can also contact the shipping firm and request that the recipient refrain from sending deliveries.


The classic phishing campaigns

Because PayPal is one of the most impersonated brands in phishing scams, a merchant that uses their services is quite likely to become the subject of phishing attempts. In a typical case, the seller will receive an email alerting him that his PayPal account has been suspended, which might cause significant anxiety if the account is one of his primary sources of revenue. This message may be for a variety of reasons, including unusual activity in the account, and the email may appear legitimate in all aspects, being so well constructed that it appears extremely real. To reactivate their account, the seller must follow the instructions in the bogus email, which is frequently a scam to steal sensitive account login information. If the target falls for the trap, the fraudster will have access to the following information: e-mail address.

It’s usually a good idea to thoroughly examine any unsolicited emails you receive, especially ones that appear to contain customer account-level requests and alerts. If you have any doubts, you can always contact the company directly via the official contact forms on their website. Using a current and dependable spam filter and security solution should help protect you from the majority of phishing threats.



While this list does not cover all of the sorts of fraud you may encounter as a seller using PayPal services, it does provide an outline of what to look out for. The most important thing is to remain watchful and suspicious of any unusual scenario. Check any email you receive carefully, whether it’s a special request or an unwelcome communication.