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The problem I am having is that first order is processed and then when the funds are captured from PayPal,the order status is again changed to processing.But the order is already processed.

Any suggestions?

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In order for a sales order to be complete it needs to be invoiced and also shipped. Once you have captured an order, it is invoiced, but still needs to shipped. If you have a downloadable product this shouldn't be a the case.

Magento made a little flowchart for this:

magento flow chart

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