If you want fast, trustworthy payments on a new dropshipping store, you need to pass PayPal and Stripe reviews and then keep your dispute rate low. That is the difference between smooth cash flow and surprise reserves, frozen payouts, and sleepless nights. This guide gives you an approval checklist tailored to Shopify and WooCommerce, shows the specific risk triggers that get new dropshippers flagged, and packages a practical chargeback-prevention playbook you can put in place this week.

According to PayPal’s own dropshipping guidance, the service is widely used by ecommerce brands and is trusted by more than 400 million account holders globally, making it a high-converting payment option for first-time buyers who recognize the logo immediately (as shared in PayPal’s dropshipping article for sellers). The same goes for Stripe, which powers online card payments and offers fraud tools that many platforms already integrate. Your job is to make both providers comfortable with your model, keep your operations transparent, and get ahead of disputes before they ever happen.

What PayPal and Stripe look for on a new dropshipping store

Payment processors protect buyers and the card networks, so they need confidence that you ship what you sell, when you say you will. The most common early hurdles for new dropshippers are incomplete websites, long shipping times with poor communication, and a spike in disputes before you have a track record. According to PayPal’s overview of reserves, the company may hold a portion of each sale if your industry has higher chargeback risk, you presell items, or you have extended delivery timeframes, with rolling reserves commonly set for 30 to 90 days depending on risk (see the PayPal explanation of rolling, minimum, and jumpstart reserves). Stripe explains that reserves are also used when dispute exposure is high and are usually temporary holds on a percentage of funds to cover potential chargebacks, with typical timeframes in the 30 to 90 day range (see the Stripe support page on reserves).

New stores can get ahead of this with a clear, credible site and documented operations. If you want a shortcut, WooDropship’s done-for-you stores ship with payment gateway setup, essential legal pages, a vetted product catalog, and conversion features for a one-time $49 fee, with delivery in 7 days. You can check the details on the WooDropship prebuilt Shopify stores page.

The approval checklist for PayPal and Stripe

Use this list before you submit your store for review or start selling volume.

1. Business identity and KYC

• Open a dedicated business account and fully complete profile details. PayPal explicitly advises opening a separate Business account and proactively uploading ownership and financial documents so reviews do not stall during growth, as described in PayPal’s dropshipping article.
• Ensure your legal business name, address, and support details match across your website, invoices, and bank account.

2. Website completeness that reviewers expect

• Clear product pages with accurate descriptions, materials, sizes, and realistic photos. PayPal’s Seller Protection page requires proof of delivery or shipment for physical goods, and disputes often hinge on whether your descriptions matched the item.
• A transparent shipping policy with estimated ranges per destination, fulfillment time, and carriers. The FTC’s Mail, Internet, or Telephone Order Merchandise Rule says businesses must ship within the advertised time or, if no time is stated, within 30 days, or else obtain explicit consent to delays or issue prompt refunds, as outlined in the FTC business guide to the Rule.
• A fair returns and refunds policy that is easy to find and written in plain language. If you need help drafting one, the WooDropship post on a dropshipping return policy shows how to set terms that reduce disputes.
• Contact page with a real email, business address, and support hours, plus live chat if possible. The PayPal dropshipping guide emphasizes proactive communication to reduce complaints and chargebacks.
• Legal pages published: Terms of Service and Privacy Policy. You can review the WooDropship legal templates or use our recommended generators in the blog catalog.

3. Product and supplier compliance

• Verify your catalog against the PayPal Acceptable Use Policy. The AUP bans categories like narcotics, weapons, and certain adult content, and it also restricts “the sale of certain items before the seller has control or possession of the item,” which is a common pitfall for presales in dropshipping. See PayPal’s Acceptable Use Policy.
• Avoid counterfeit or IP-infringing goods. That is a fast route to payment holds and account restrictions.
• Vet your AliExpress suppliers for handling time and delivery consistency. WooDropship’s plugin helps you import vetted products and automate fulfillment, which reduces delays. See the WooDropship AliExpress Dropshipping Plugin page and our guide on automating your AliExpress business.

4. Checkout settings and fraud controls

• Enable AVS and CVC checks, and use 3D Secure where applicable to comply with European SCA requirements. Stripe explains that Strong Customer Authentication applies in the EEA and requires two factor authentication for many card payments, and their SCA documentation shows how to enable it.
• Use risk filters or tools. Shopify’s built-in fraud analysis flags risky orders for manual review, and Stripe Radar provides machine learning rules and blocklists to stop card testing and suspicious transactions.

5. Order tracking and evidence collection

• Always provide tracking numbers and send tracking updates. PayPal shows how to add tracking in your account, and those events make dispute responses much stronger. You can also connect your store to sync order tracking with PayPal using the WooDropship guide on syncing order tracking information with PayPal.
• For higher value goods, require signature on delivery. PayPal’s Seller Protection requirements specify signature confirmation above a threshold for full protection.

If you are launching on WooCommerce, you can go live fast with the WooDropship plugin. It imports AliExpress products in one click, uses AI to rewrite titles and descriptions, and fulfills orders through a Chrome extension. The plugin is offered as a lifetime license for $89 with no recurring fees, which is ideal if you prefer WordPress. Learn more on the WooDropship Dropshipping Plugin page and our WordPress startup guide.

Risk triggers that quietly get dropshipping merchants flagged

Payment providers evaluate risk continuously, and certain behavior patterns are red flags.

• Preselling without control of inventory. The PayPal AUP lists selling items before you have possession or control as restricted activity. If you do preorders, clearly label ship dates, capture consent, and follow the FTC delay notice rules to the letter.
• Long, vague shipping timelines and poor updates. Stripe’s dispute prevention tips underscore communicating shipping times up front, notifying customers of delays, and always providing tracking numbers.
• Sudden volume spikes with no history. This often triggers manual reviews or temporary reserves. Ramp ad spend carefully, diversify products, and maintain consistent fulfillment.
• High complaint or dispute rates. PayPal’s reserves article advises monitoring complaint rates and aiming to keep them below 1 percent of sales. Internally, track your unresolved ticket count and average response time, which are two inputs you can improve quickly.
• Card testing and bot traffic. Stripe documents Visa’s new enumeration monitoring, which flags accounts with high card testing attempts and a 20 percent enumeration ratio, part of the Visa Acquirer Monitoring Program changes taking effect in 2025.
• Unclear descriptors or mismatched business names. Stripe’s monitoring programs note that inconsistent statement descriptors can create reporting discrepancies and increase dispute risk because customers do not recognize charges.
• Selling high risk categories without preapproval. PayPal lists items and services that require preapproval, including certain adult content, file sharing, and marketplaces. If your niche touches a regulated category, verify preapproval requirements first.

Understand dispute thresholds to avoid network monitoring programs

Card networks monitor merchant dispute and fraud metrics, and crossing thresholds can lead to fines or lost processing privileges. Stripe’s monitoring programs page details the latest rules, including Visa’s VAMP and Mastercard’s ECP and EFM.

• Visa VAMP. Visa calculates a combined disputes plus fraud ratio and count. Per Stripe’s documentation, Excessive thresholds include a VAMP ratio up to 2.2 percent in many regions during 2025 and 1.5 percent thereafter in others, with counts of 1,500 monthly disputes in most markets or 150 in CEMEA, and special thresholds for enumeration attacks.
• Mastercard Excessive Chargeback Program. Shopify’s help center summarizes that ECM starts at 100 to 299 disputes with a 1.5 to 2.99 percent rate, while HECM begins at 300 or more disputes with a 3 percent rate, with escalating monthly fines.
• Mastercard Excessive Fraud Merchant. Shopify’s page also outlines EFM criteria that include at least 1,000 ecommerce Mastercard payments, over 50,000 dollars in fraud volume, and a fraud chargeback rate above 0.5 percent, coupled with a low 3DS usage percentage.

These programs exist outside your payment provider. The lesson is simple. Prevent disputes as if your account depends on it, because it does.

A practical chargeback prevention playbook for dropshipping

1. Set clear expectations before checkout

Publish shipping windows for each destination and explain that tracking will be shared by email. Stripe’s guidance on preventing disputes for undelivered products specifically recommends communicating shipping times prior to checkout and sending tracking immediately after shipment.

2. Make your product pages accurate and honest

Avoid exaggerated claims and ensure the images match the product you will ship. When buyers feel misled, they often file “not as described” disputes that are not covered by PayPal’s Seller Protection.

3. Tighten your fraud controls without adding friction

• Turn on AVS and CVC checks and enable 3D Secure where required. Stripe’s SCA documentation explains how European regulations require two factor authentication in many cases. Use conditional 3DS for risky orders in non-EEA markets.
• Block obvious fraud patterns with Radar style rules, such as rejecting mismatched country IP plus billing address, capping high velocity attempts, and flagging first time high ticket purchases for review. Stripe’s Radar rules documentation shows how businesses can tailor blocklists and velocity controls.
• On Shopify, review “high risk” orders flagged by Shopify Fraud Analysis before fulfillment.

4. Overcommunicate after purchase

• Send a branded confirmation email that repeats your delivery window and links to your returns policy.
• Share tracking proactively and send expected delivery day reminders. If there is a delay beyond your promise, follow the FTC delay notice steps and give an easy path to a refund or to wait.
• Use live chat and fast email support. PayPal’s dropshipping guidance stresses that responding quickly reduces the chance that buyers go straight to a PayPal claim.

5. Require signatures and keep proof

For orders above your chosen threshold, require signature on delivery. PayPal’s Seller Protection page indicates signature confirmation is needed above a specified amount for physical goods to qualify for full protection. Store the carrier’s PDF and screenshot the delivery scan that shows the complete address.

6. Sync tracking to PayPal and keep records in one place

Add tracking numbers to PayPal as soon as you ship. PayPal’s help center explains how to update order status or add tracking, and doing so also triggers buyer notifications. Automate this with the WooDropship tutorial on syncing tracking information to PayPal.

7. Build a returns flow that is easy and fair

Short, generous, and simple beats long, strict, and confusing. A transparent policy decreases “item not as described” and “not received” escalations. If you need examples, use the WooDropship guide to crafting a dropshipping return policy.

8. Use reliable suppliers and shipping methods

Choose suppliers with stable handling times and consistent shipping scans. If you are building on WordPress, our list of the best WordPress themes for dropshipping can help you pair a fast storefront with optimized product pages, which also reduces buyer confusion and support tickets.

9. Train your team on first party misuse

The Merchant Risk Council’s 2024 Global eCommerce Payments and Fraud Report highlights the rise of first party misuse, where customers dispute legitimate charges. Train agents to verify delivery, reference your policy, and offer fast resolutions to keep disputes from reaching the bank.

How to win more disputes when they happen

You will still get disputes. Your goal is to shrink their number and increase your win rate.

• Structure your evidence like an auditor. Stripe’s evidence best practices recommend organizing proof chronologically with a clear timeline, grouping by type, and keeping files concise and legible.
• Provide proof of authorization. Include AVS and CVC result codes, IP addresses, device fingerprints, and any 3DS authentication records when applicable, as Stripe advises in its best practices.
• Provide proof of delivery with full address. Stripe’s documentation emphasizes that carrier delivery confirmation should show the full address, not just a city and postal code. Add signature confirmation when available and include screenshots that highlight the key details.
• Show your customer accepted your terms. Add a screenshot of your checkout with a checkbox for Terms and Refund Policy and paste only the relevant excerpt of the policy. Stripe warns that card issuers do not read entire policies, so highlight only the section that applies.
• Use Visa CE 3.0 when eligible. Visa’s Compelling Evidence 3.0 allows merchants to use prior non-fraudulent transactions with matching data points to counter friendly fraud. Stripe notes that it flags CE 3.0 eligible disputes and can auto attach prior transactions, which meaningfully raises win odds.

If a dispute is clearly justified, accept it quickly rather than wasting time. Stripe advises that prevention matters more than win or loss statistics, since networks count total disputes, not outcomes, for monitoring programs.

Shopify and WooCommerce specifics that make life easier

• Shopify. If you want the fastest path to launch, start a Shopify free trial and plug in your products. Our prebuilt Shopify stores include 30 vetted products, a premium theme, legal pages, and payment gateway setup so you can test ads within a week. If you need a new Shopify account, sign up through this Shopify link.
• WooCommerce. If you prefer WordPress control and one-time software pricing, install WooCommerce and add the WooDropship plugin to import AliExpress products, rewrite titles with AI, and fulfill orders from a Chrome extension. See WooDropship’s AliExpress dropshipping 101 guide for a beginner friendly overview and our WordPress startup tutorial to get your catalog live quickly.
• Site optimization to reduce refunds. Fast, clear pages cut buyer confusion. If you are on WordPress, our guide to the top WooCommerce themes for dropshipping helps you pick layouts that showcase images, specs, and shipping options clearly. Pair that with our tips to increase conversion and to provide exceptional customer support, and you will see fewer cancellations and fewer disputes.

Reserves, holds, and how to graduate out of them

Even good merchants see initial reserves. PayPal describes common reserve types, like 10 percent held for a 90 day rolling period, and they review reserves every 180 days for possible reduction. Stripe states that reserves are set based on risk and usually last 30 to 90 days, with clear terms provided in advance. The fastest way to exit a reserve is to show low dispute rates, consistent shipping within promised time, and strong tracking discipline.

• Keep your combined dispute rate under 1 percent. PayPal suggests monitoring complaint rates and staying below that mark.
• Improve promise accuracy. The FTC rule requires you to ship within the stated window or 30 days if none is stated, or else get consent for delay or refund. Build process around those steps.
• Add signatures for high value shipments and enable 3DS in Europe. Those two changes alone can dramatically cut fraud related disputes.

Make WooDropship your “set it up right” shortcut

You can assemble everything yourself, or you can launch with a store that bakes in best practices from day one. WooDropship’s prebuilt Shopify stores include legal pages, policy templates, SEO tuning, and conversion features like bundles and bought together to raise average order value. If you are a WordPress person, our WooCommerce plugin gives you one click AliExpress import, AI product optimization, and automated fulfillment, so your shipping data stays clean and your tracking reaches buyers on time. Either way, lean on our tutorials, including how to avoid common dropshipping mistakes and how to automate your AliExpress dropshipping business.

Happy WooDropshipping!