The importance of your PayPal Merchant Reputation and how to fix or improve it

Reginald Ofori
5 mins

With the increased adoption of ecommerce, the popularity of PayPal has also increased. Although it differs from country to country, PayPal is often ranked as one of the top payment methods used in online stores. This means that as a merchant, not offering PayPal as a payment method in your store could significantly damage your conversion rate and order flow.It’s social media!

We’re all social and we want to know what everyone is doing. This blog post will discuss some of the most important social the media tips for business owners. It will talk about how you can make your social media presence more effective by following a few simple steps. I’ll also focus on the importance of authenticity, connection, and new task engagement to help maximize your social media presence.

With over 400 million active users worldwide and over 30 million registered merchants, PayPal has had to implement many different procedures and protocols over the years in order to reduce fraud and abusive practices from both types of users (consumers and merchants). However, it’s important to realise that PayPal is very much a pro-consumer platform (I wrote this blog post explaining this point [link to blog post ‘A common misconception about PayPal’)]).

That means that, by default, PayPal will side with consumers. This means that if a consumer lodges a complaint, it’s mostly on the merchant to prove that they are not at fault. Or as I like to call it, guilty until proven innocent. Quite, right?

It’s important to realise that PayPal is very much a pro-consumer platform

How harshly PayPal treats you in turn depends on one thing: your PayPal merchant reputation. If you try Googling this term, you probably won’t find any hits, and that is because PayPal does not publicise this. But rest assured that the almighty PayPal algorithm, which tends to decide the vast majority of complaints on the platform and account reserves [Link to blog post ‘Three types of account reserves’] exists and is very influential.

Many merchants have contacted PayPal to ask for clarification, only to be told that the decision was made by the algorithm and there is no way of reverting it.

1. Shipping your products on time and uploading order tracking information

Shipping orders to your customers in a timely fashion is one of the single most important steps any merchant can take to improve and maintain a healthy PayPal reputation. In doing so it’s important to:

  1. On your website, clearly list how quickly orders tend to be shipped to customers.
  2. Regardless of the previous, PayPal requires all merchants to ship orders within 5-7 days of securing payment, at all times. The only exception is if it’s clearly stated that order shipping is delayed due to a specific reason (for example, in the case of a pre-sale or when you are accepting backorders). That said, it's important to note that these numbers can change from time to time.

However, shipping the order on time to your customer is not enough. PayPal also wants all their merchants to upload the order tracking information (shipment number and provide the name of the carrier). Not doing so means that they are not able to share that information with the customer, which in turn might trigger complaints (if the customer is wondering why they have not yet received their order).

However, shipping the order on time to your customer is not enough. PayPal also wants all their merchants to upload the order tracking info.

Merchants can upload order tracking information manually (see this article for an explainer [link to blog post ‘How to upload order tracking information to PayPal’]. However, this process is time-consuming and prone to input errors. Instead, merchants can sign up for Solpaid [add link to Solpaid homepage] to automatically sync all order tracking information with PayPal in real time.

2. Reply promptly to customer complaints

Each time a customer lodges a complaint with PayPal, merchants will be notified via email. The quicker you reply to this and offer a solution or provide proof of no wrongdoing, the more favourably PayPal will view your merchant account.

Although PayPal cannot track it, in general, replying super quickly to customer support tickets and comments on social media is an effective strategy. Why? Because customers often include proof of them having reached out to the merchants through other channels but not receiving a response when they decide to escalate things with PayPal. A merchant who always responds quickly to customer enquiries significantly reduces the risk of formal customer complaints being lodged via PayPal.

3. Limit the number of customer complaints

Although it's advisable to always respond in a timely fashion to customer disputes on PayPal, it will not always suffice. This is because PayPal also keeps close track of the dispute rate (calculated as the number of disputes lodged by customers compared to the total number of orders processed in your PayPal account).

Although the exact rate can differ through time and per region, in general, once the dispute rate moves into the 1.5% range, a merchant is likely to be penalised by PayPal. See my article ‘The five ways PayPal can ruin your business’ [add a hyperlink to this blog post] to learn more about this.

4. Request reviews from customers

Finally, simply asking your customers to leave a review after every delivery will help improve your merchant reputation. This also has the added benefit of showcasing the quality of your service and trustworthiness to other potential shoppers.

If you are a bit overwhelmed by the above list, my advice would be to always start with the lowest hanging fruit that will have the biggest impact on maintaining a healthy PayPal merchant reputation. 

Sign up for Solpaid today and start automatically syncing all order tracking information with PayPal in real time. As an added bonus, you will very likely also start to see a decrease in those dreaded ‘Where is my order?’ support tickets. It’s a win-win situation. Get started with Solpaid here.

Reginald Ofori