Configure PayPal

Log in to your PayPal account.

Instant Payment Notifications

Go to Profile -> My Selling Tools -> Instant Payment Notifications

To enable IPN, click on this radio button: Receive IPN messages (Enabled)
You have to enter a Notification URL. It can have this form:
http://www.YOUR_DOMAIN.com/index.php?option=com_mymuse&task=notify

Auto Return for Website Payments

Go to Profile -> My Selling Tools -> Update Website Preferences

Set Auto Return to On.
You can enter a return URL below but it is also sent from your shop.
http://www.YOUR_DOMAIN.com/index.php?option=com_mymuse&task=thankyou

Related Help Screen.