If you are new to PayPal Sandbox then it is probably a good idea to read the following post first to get a good idea of PayPal sandbox before getting your hands dirty:
http://www.tipsandtricks-hq.com/playing-in-paypals-sandbox-2880
This topic is a quick guide to using PayPal Sandbox with eStore. It covers the following items:
1. Obtaining a PayPal Sandbox Account.
2. Creating Buyer & Seller Test Accounts
3. Configuring eStore For Sandbox Transactions
4. Making It Work
5. Caveats & Warnings
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Obtaining a PayPal Sandbox account:
https://developer.paypal.com/
1. Create an account by clicking the “Sign Up Now” button.
2. Complete the sign up & verification process. WARNING: Do not use any of your regular PayPal primary or alternate e-mail addresses. Do not even use the same passwords as your “real” account.
This is to preserve the integrity of your “real” PayPal transactions, and to minimize the possibility of spoofing. In fact, the sandbox e-mail address shouldn't even contain your site's regular domain name. Use a Gmail or Yahoo address instead.
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Creating Buyer & Seller Test Accounts:
https://developer.paypal.com/
1. Log into your sandbox account.
You will need 2 test accounts; one for the seller and one for the buyer.
Sandbox -> Home -> Test Accounts -> Create a preconfigured account.
2. Create 1 account each for the buyer and seller.
Under Sandbox -> Test Accounts you will see your newly created test accounts. The e-mail addresses are suffixed to create unique e-mail addresses.
Selecting an account and then clicking “Enter Sandbox Test Site” give you access to a sandbox version of PayPal, in which each of the test accounts can perform almost any function that can be performed in the real PayPal system.
Under Sandbox -> Test Email you can access the “virtual e-mail accounts” associated with your test accounts.
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Configuring eStore For Sandbox Transactions:
1. WP eStore -> Settings -> General Settings -> Testing and Debugging Settings
a. Check “Enable Debug.”
b. Check “Enable Sandbox Testing.”
c. Save/Update the eStore settings.
2. Click “Reset Debug Log Files.”
3. WP eStore -> Settings -> Payment Gateway Settings -> PayPal Settings
a. Set “Paypal Email Address/Secure Merchant ID” to the e-mail address assigned to your “SELLER” test account, NOT YOUR SANDBOX LOGIN. You may copy/paste this information from the Sandbox -> Test Accounts page.
b. Save/Update the eStore settings.
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Making It Work:
1. Open, and keep open, the following windows in your browser...
a. Window "A" to https://developer.paypal.com/
Log into your Sandbox account. This window must remain open.
b. Window "B" to your eStore site. Make sure you are logged out of your admin account.
2. In the “B” window, make a test purchase. When you are redirected to PayPal for checkout, use the e-mail address and password assigned to your “BUYER” test account.
3. After the transaction is complete, check the “A” window for any Test Emails sent to the buyer or seller test accounts.
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Caveats & Warnings:
A. You must be logged into your sandbox account in order for test transactions to go through.
B. Anyone trying to make “real” purchases while the site is in sandbox mode will be disappointed.
C. Remember to undo the eStore changes after you are done testing.
D. If the “BUYER” account sets up any recurring payments (subscriptions) the sandbox will keep trying to send IPN, etc. to your site; long after you've forgotten about it! You must access the appropriate buyer/seller test accounts and “cancel” the recurring payments.
E. eStore does not differentiate between “real” and “test” transactions. Your accountant will have a fit, if he doesn't know which transactions are real or pretend :)
