The Obscure Limits of Paypal Digital Gifts

We often blog about purchasing gift cards on eBay, usually due to deals that come up offering various gift cards at a discount. Many of these deals are for physical gift cards sold by Giftcardmall, SVM, or Cardency. Others are for electronic gift cards sold by Paypal Digital Gifts (PPDG).

The most common problem we’ll hear in the comments of such posts is that Paypal is not allowing the payment to go through.

on a bad day you’ll see one of these

on a good day you’ll see one of these

For long, I assumed that Paypal has a complicated algorithm which decides whether or not to allow any given purchase. A few weeks ago, Chasingthepoints laid out a groundbreaking idea that there’s actually a hard $1,000 limit on the amount of e-gift cards that PPDG will sell you. He left it up in the air as to when that limit resets.

Since that time, I’ve spent many hours poring over my own PPDG limits and the limits of others in my quest of finding a method to the madness.

The conclusion? It’s not simple.

Contents

1 Here are the basics
2 Other things to keep in mind
3 PPDG – Advanced Edition
4 Notes about Testing
5 Final Thoughts

Here are the basics

The $1,000 limit is real.
The reset is based on a rolling 30-days.
Aside from the $1000 ‘hard’ limit, there appears to be a ‘soft’ limit of $250 in a single checkout which Paypal sometimes imposes. It’s important to note that this does not limit you in volume at all; it just requires you to make multiple purchases of $250 or less in separate transactions. (This is terrible when you have a one-time coupon to use.) What’s extremely odd is that this ‘soft’ limit can vary literally within minutes; you’ll see the system willing to allow you to do $500 worth of gift cards and then you’ll try again a few minutes later and the system will show the $250 limit. [Note: Most people seem to have a $250 soft limit, but I did once come across a slightly lower soft limit.]
Only after you verify your bank account will Paypal allow you to make PPDG purchases. Paypal has various levels of verification they ask you to do. The most basic is just adding a credit card; at that point you still won’t be able to make PPDG purchases. You need to add a bank account and verify it before they’ll allow PPDG purchases. There are other verifications which will allow you to purchase from PPDG as well, such as giving in your SSN (e.g. to apply for a Paypal debit/credit card).

Other things to keep in mind

The above-mentioned limits are all per Paypal account. It won’t help you to use two separate eBay accounts. Conversely, if you use two separate Paypal accounts with the one eBay account, you’ll double your limit.
When purchasing discounted gift cards, the important number is the paid amount, not the face value; if you buy a $100 gift card for $90, count $90 toward the $1,000 limit. (This is also true with regards to the ‘buy-two-get-$15-off’ deals. The important number is the amount actually paid.)
Paying with eBay gift cards doesn’t help. Although you apply the eBay gift card in the eBay checkout screen before you get to Paypal, that still counts toward the limit. The same should be true with regards to promo codes and coupons which register in the eBay checkout in the same manner as gift cards.
There’s no difference which denomination cards you purchase; if your allowed amount is currently $300, it won’t matter whether you purchase three $100 cards or twelve $25 cards.
eBay e-gift cards have the same limits as all other e-gift cards; if you purchased yesterday $800 in Gap cards, for example, you won’t be able to purchase $300 eBay cards today.
Sometimes the system will error out on you after you hit the ‘confirm and pay’ button. That issue is entirely separate and is unrelated to these limits. That issue could stem, for example, from the fact that you’re using your Paypal account from an IP address different than you normally use.
Direct purchases on Paypal Digital Gifts, not purchased through eBay, do not count as part of the $1000 limit.

PPDG – Advanced Edition

But…it’s far from simple. There were a number of cases where I saw people who were able to go over the $1000 limit. Slightly.

Here are some possible explanations.

There appears to be a certain amount of leeway for smaller purchases, in amounts under $150. For now, I’m going to guess that the way it works is that if you haven’t made any PPDG purchases over a given amount of time (perhaps 7-days) then the system will allow you to do ~$125 in purchases, despite the fact that this will put you over $1000. (Note: These purchases will still count against your limit for the future.)
I have found one person who apparently does not have this $1,000 limit at all. All others I’ve reviewed do seem to have the $1000 limit.
I had conflicting experiences as to exactly what time the reset happens. In one instance, it appeared to reset at the beginning of the day. In another instance, it appeared to need a full 24-hour 30-day time period to lapse before resetting.
It’s possible that the system will allow you to go over in small amounts, under $25. For example, if you have $85 left to your limit, the system may allow you make a $95 e-gift card purchase. (Note: In my own account, I see the $1000 limit to be exact, but in other accounts I saw some small, unexplained leeway which is why I suggest this idea.)
It’s possible that eBay gift cards do not count toward your future limit. To be very clear: eBay gift cards are restricted if you went over your limit, but they may not count toward your future limit. To illustrate: if you purchased $1,000 in Gap gift cards, you won’t be able to purchase eBay gift cards for another 30-days. But if purchase $1,000 in eBay gift cards it’s possible that these don’t count against your limit for future purchases.

Notes about Testing

If you want to test your own PPDG limits, you don’t need to actually purchase the gift cards. Just go through the checkout until you get to the ‘confirm and pay’ button and you’ll see what your limits are. If the system is not allowing you to get to the ‘confirm and pay’ button then you’re past your limits – either the hard limit or the soft limit. If the system does allow you to see that button then you know you’re within your limits.
PPDG sells a $5 eBay e-gift card which is useful for testing exact amounts.

Final Thoughts

No doubt this is all confusing and it’s also likely that some of this info isn’t accurate. Still, the basic $1,000 per 30-day reset seems to be the general rule-of-thumb, with all its imperfections.

The stated limit really changes the strategy for purchasing from PPDG. Until now, we just purchased whenever they allowed us to do so; now, we need to purchase strategically so as to keep room for a future purchase. It may be worth holding off on e-gift card purchases which don’t have a higher margin, such as when there is a bonus Bucks deal going on.

(Big thanks to Orensmoneysaver, Esther, Chasingthepoints, and Mileswhip for allowing me to drive them crazy over the past few weeks!)

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