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Chargeback limit and formula for businesses

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Chargeback limit and formula for businesses

Hi Paypal Community,

 

I'm looking at buying a business that uses Paypal as their merchant account.  The business has a number of chargebacks and refunds that occur every month.  I'd like to know what criteria Paypal uses to determine to place a hold on/freeze the account.  For example, if the business generated $5,000 in sales, and there were 10% or $500 in chargebacks or refunds, would that prompt PayPal to put a hold on the account?  Or is it a dollar value that determines it, for example, if you go over $10,000 in chargebacks or refunds per month does your account get frozen?  If it works differently, please let me know.

 

Thanks,

 

Rory 

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