I checked my system logs and it is showing email loop detected.
What does it mean?
Do I need to worry?
Is there something that I can do about it?

It means that if it sent the email that the ticket wanted, it would send an email to a email that is either collected or used by the system. Which would result in osTicket picking up the email, making/updating a ticket, which would in turn send an email, repeat infinitely.

You would need to identify what email the system wants to send to, and find out why the loop is happening. It could be that the system is using an email that is a mailing list, etc.

See we are using only one email for outside contact. Do you think it is happening because we are creating a new ticket on behalf of the client?

Would updating the ticket send an email to the email that you are using to send the response... thus resulting in the ticket system getting said email and adding it to the ticket? If so then that is your loop.

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