Why Do Paypal Hold Funds for 21 Days? How to Get It Faster

sold on ebay cannot access pending paypal money

So you’ve just started drop shipping on Ebay and you just made your first sale… I don’t know about you, but when I made my first sale I was so excited I started knocking over tables and lamps in my house! But then you noticed something, a problem, you can’t access your funds on Paypal.

You received the payment from your Ebay buyer, from the funds are under the “pending” section instead of the “completed.” In your available balance you see a big, fat, zero. You may get even more confused and angry after you learn that they’re going to hold your money in limbo for up to 21 days. So why do paypal hold funds for 21 days, and how do you get it sooner?

They do it to protect you from scammers.

They’re basically trying to prevent scams from happening, your funds are on hold because Paypal doesn’t trust new sellers. Imagine if a scam artist just sells a bunch of things he doesn’t have, then cashout and run as soon as he receives the payments? The paypal hold is in place for this very reason. Rest assured that the money is indeed yours, it’s just not accessible to you yet.

How to Avoid Getting The Paypal Hold?

The short answer is there is no way around it. Everyone has to deal with the hold, aka “paypal jail” at the beginning of their Ebay drop shipping career. But it doesn’t last forever, and your time in paypal jail will end as soon as paypal believes they can trust you as a seller. Once you’re out of paypal jail, you will have full access to your funds immediately after your buyer pays you.

Paypal jail will end once you’ve met ALL 3 of these criteria:

  1. It must have been at least 90 days since your first sale
  2. You must have sold at least 25 items without problems
  3. You must have sold at least $250

How to Access Money Faster While in Paypal Jail

Upload Tracking Information:

The tracking number allows Ebay to know that your item has been successfully delivered to your buyer, and once it does your funds will be available to you 3 days later. So let’s say you made a sale on Sunday, your supplier ships out the item on Monday and it arrives to your buyer by Wednesday, you will have access to your paypal funds by Saturday. That’s only 1 week from the date of your sale!

Marking Items as Shipped

Even if you don’t have a tracking number, just mark the item as shipped once you’ve shipped it. If you do this then Ebay will be able to calculate an estimated shipped date, and 7 days after this estimated date your funds will become available to you.

If you don’t upload any tracking information and you don’t mark the item as shipped, then Ebay cannot calculate your estimated shipping time. In that case the whole 21 days will apply. But if you’re drop shipping on Ebay using a large online retailer like Walmart, Target, or Amazon, chances are you’ll always be supplied with a tracking number within 1-2 days.

I’ve never waited the whole 21 days, not even once. So it’s not really as bad as it seems. 

How To Pay For Item Without Access to Funds??

So since your funds are pending, you cannot use it to buy the item from your supplier. So this is when you need to have some of your own money set aside, and use it to pay for it item up front. When I first started drop shipping I was very hesitant about risking a lot of my own money, so I understand some people may be uncomfortable with this. 

My recommendation is to set aside around $300-$500 in your bank account, or however much you can afford. The paypal hold doesn’t last forever, and you can usually get access to your funds after about 7 days as long as you upload tracking information. You can also try selling cheaper ($10-$25) items when starting out if you’re uncomfortable spending $100+ of your own money up front.

Let me know in the comments below if you have any questions about this and I’ll be glad to get back to you within 24hrs. If you found this post helpful, feel free to like and share it on social media.

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