First step, create a thank you page for successful PayPal transactions and set that URL within PayPal so visitors are returned to your site.
The problem is that when the visitor returns to your site after payment has been received (or cancelled) PayPal gets the credit for the conversion and not the original way the visitor found your site.
Steps For Tracking PayPal With Google Analytics:
1. Log into PayPal.
2. Under the 'My Account' tab click on the 'Profile' link.
3. Click on 'Website Payment Preferences' (under 'Selling Preferences' in the right column).
4. Turn 'Auto Return' on and enter the URL of your PayPal thank you page.
Then add ?utm_nooverride=1 to the end of your URL (highlighted in blue below), this will ensure that transactions (i.e. conversions) are credited to the original traffic source, rather than PayPal.
For example, if a visitor came from a Google search for 'gardening book' the conversion will be credited to Google, organic, gardening book (and not PayPal, referral).
At this point if you simply want to track the conversions using goals you can setup a new goal for the thank you page within Google Analytics. However, if you want to also get Google Analytics ecommerce tracking up and running you will need to get a little more technical.
PayPal's payment data transfer allows you to receive transaction details once a visitor is back on your site (visit the PayPal technical overview article for details).
Getting Advanced With Ecommerce Tracking:
6. Turn 'Payment Data Transfer' on.
Please note that once you turn on 'Payment Data Transfer' it will be applied to all Auto Return payments unless otherwise specified within the button or link for that Website Payment.
7. You will now either have to create your 'Buy Now' buttons or modify your existing buttons.
If you are creating new 'Buy Now' buttons leave the return URL blank (or if you specify a different URL ensure it has ?utm_nooverride=1 at the end).
If you already have buttons on your site you will need to look for the following code:
<form action="https://www.paypal.com/cgi-bin/webscr" method="post">
And add the following before the </form> element (with your correct thank you page URL):
<input name="return" type="hidden" value="http://www.site.com/paypal-thanks.php?utm_nooverride=1" />
8. Finally you will need to modify your thank you page to grab the PayPal data being transfered using either the POST of GET methods (you will have to talk to your web developer or IT person if you are not familiar with the coding of your site).
Basically, you will need the Google Analytics ecommerce tracking code to automatically (or dynamically) grab the correct values and place them in the code. You will be able to get total price, tax, shipping, transaction id, item name, quantity, etc.
Example Google Analytics Ecommerce Tracking Code:
For Google AdWords conversion tracking you simply need to grab the total value and pass that into the conversion script as the value.
Example Google AdWords Conversion Tracking Code:
Read about Google Analytics ecommerce tracking
Read about Google AdWords conversion tracking
Finally, we strongly recommend that you test everything out using the PayPal Sandbox.
If you have any questions please feel free to contact us directly and if you are located in Australia check out our Google Seminars for Success for the best Google Analytics training available!
Thanks to ROI Revolution for inspiring this post who originally discussed Google Analytics and PayPal back in 2007.