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What's wrong with this Paypal IPN integration file?

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Currently, it checks out perfectly. But when a user clicks "return to merchant", this paypal ipn integration script is not communicating in a way that my script will recognizes the checkout completion, and deliver virtual items accordingly. (think of it as buying instant online game items)

Here is the integration script. Please advise!!!!!

Code:
<?php

/*  PHP Paypal IPN Integration Class Demonstration File
 *  4.16.2005 - Micah Carrick, [email protected]
 *
 *  This file demonstrates the usage of paypal.class.php, a class designed  
 *  to aid in the interfacing between your website, paypal, and the instant
 *  payment notification (IPN) interface.  This single file serves as 4 
 *  virtual pages depending on the "action" varialble passed in the URL. It's
 *  the processing page which processes form data being submitted to paypal, it
 *  is the page paypal returns a user to upon success, it's the page paypal
 *  returns a user to upon canceling an order, and finally, it's the page that
 *  handles the IPN request from Paypal.
 *
 *  I tried to comment this file, aswell as the acutall class file, as well as
 *  I possibly could.  Please email me with questions, comments, and suggestions.
 *  See the header of paypal.class.php for additional resources and information.
*/


include 'admin/settings.php';
include 'header.php';

// Setup class
require_once('paypal.class.php');  // include the class file
$p = new paypal_class;             // initiate an instance of the class
$p->paypal_url = 'https://www.sandbox.paypal.com/cgi-bin/webscr';   // testing paypal url
//$p->paypal_url = 'https://www.paypal.com/cgi-bin/webscr';     // paypal url
            
// setup a variable for this script (ie: 'http://www.micahcarrick.com/paypal.php')
$this_script = 'http://'.$_SERVER['HTTP_HOST'].$_SERVER['PHP_SELF'];

// if there is not action variable, set the default action of 'process'
if (empty($_GET['action'])) $_GET['action'] = 'process';  

switch ($_GET['action']) {
    
   case 'process':      // Process and order...

      // There should be no output at this point.  To process the POST data,
      // the submit_paypal_post() function will output all the HTML tags which
      // contains a FORM which is submited instantaneously using the BODY onload
      // attribute.  In other words, don't echo or printf anything when you're
      // going to be calling the submit_paypal_post() function.
 
      // This is where you would have your form validation  and all that jazz.
      // You would take your POST vars and load them into the class like below,
      // only using the POST values instead of constant string expressions.
 
      // For example, after ensureing all the POST variables from your custom
      // order form are valid, you might have:
      //
      // $p->add_field('first_name', $_POST['first_name']);
      // $p->add_field('last_name', $_POST['last_name']);
      
      $p->add_field('business', $email_address_1);
      $p->add_field('return', $this_script.'?action=success');
      $p->add_field('cancel_return', $this_script.'?action=cancel');
      $p->add_field('notify_url', $this_script.'?action=ipn');
      $p->add_field('item_name', $_POST['name']);
      $p->add_field('amount', $_POST['price']);
	  $p->add_field('item_number', $_POST['id']);
      $p->add_field('custom', $_POST['type'].'_'.$_POST['user_id']);
	  

      $p->submit_paypal_post(); // submit the fields to paypal
      //$p->dump_fields();      // for debugging, output a table of all the fields
      break;
      
   case 'success':      // Order was successful...
   
      // This is where you would probably want to thank the user for their order
      // or what have you.  The order information at this point is in POST 
      // variables.  However, you don't want to "process" the order until you
      // get validation from the IPN.  That's where you would have the code to
      // email an admin, update the database with payment status, activate a
      // membership, etc.  
 
      echo "<html><head><title>Success</title></head><body><h3>Thank you for your order.</h3>";
      foreach ($_POST as $key => $value) { echo "$key: $value<br>"; }
      echo "</body></html>";
      
      // You could also simply re-direct them to another page, or your own 
      // order status page which presents the user with the status of their
      // order based on a database (which can be modified with the IPN code 
      // below).
      
      break;
      
   case 'cancel':       // Order was canceled...

      // The order was canceled before being completed.
 
      echo "<html><head><title>Canceled</title></head><body><h3>The order was canceled.</h3>";
      echo "</body></html>";
      
      break;
      
   case 'ipn':          // Paypal is calling page for IPN validation...
   
      // It's important to remember that paypal calling this script.  There
      // is no output here.  This is where you validate the IPN data and if it's
      // valid, update your database to signify that the user has payed.  If
      // you try and use an echo or printf function here it's not going to do you
      // a bit of good.  This is on the "backend".  That is why, by default, the
      // class logs all IPN data to a text file.
      
      if ($p->validate_ipn()) {
          
         // Payment has been recieved and IPN is verified.  This is where you
         // update your database to activate or process the order, or setup
         // the database with the user's order details, email an administrator,
         // etc.  You can access a slew of information via the ipn_data() array.
  
         // Check the paypal documentation for specifics on what information
         // is available in the IPN POST variables.  Basically, all the POST vars
         // which paypal sends, which we send back for validation, are now stored
         // in the ipn_data() array.
  
         // For this example, we'll just email ourselves ALL the data.
         $subject = 'Instant Payment Notification - Recieved Payment';
         $to = '[email protected]';    //  your email
         $body =  "An instant payment notification was successfully recieved\n";
         $body .= "from ".$p->ipn_data['payer_email']." on ".date('m/d/Y');
         $body .= " at ".date('g:i A')."\n\nDetails:\n";
         
         foreach ($p->ipn_data as $key => $value) { $body .= "\n$key: $value"; }
         mail($to, $subject, $body);
      }
	  else
	  	mail('[email protected]', 'Error', 'Hello');
	  
      break;
 }     

?>
 
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Just to double check you do realise it is using the sandbox server at the moment instead of the live server?
 
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