Refund Currency problem?

[loadcell]

We have a customer that purchased some items off our web site and paid for them with a personal credit card via PayPal. He canceled the order the following day and we issued a refund using the refund button on PayPal. The customer is in Holland (EUR) and we sell in GBP. The customer contacted us after receiving the refund to say that he did not get a full refund. He originally paid EUR3,046.50 but only had EUR3,026.26 refunded. My questions are why has this happened? and how do we correct this discrepancy? Thanks.

[PayPal_barry]

Thanks for your query. When PayPal refund back to a customer, we refund back exactly what was taken from the funding source. To give an example, if you today were to make a payment of £100GBP to a US company that take payment is USD.  Tomorrow that payment gets refunded in full. Regardless of currency conversions we return £100GBP to your account. That is for all transactions that get refunded. The amount taken from the original funding source is returned in full when refunded by the seller.

If the buyer has had issues with their bank or card issuer in processing that refund back, then they must deal directly with that financial institution. Please have them review the “History” in their PayPal accounts for your refund, to confirm the amount returned by you.

[evamar]

Hi there, similar problem here. Spain is our main market, although we are based in the UK, so most payments are received in euros and we use UK providers paid in GBP. For book-keeping ease, we convert all payments into GB Pounds, and of course paypal takes a bite off the converted total. Then, if anything happens and we have to do a refund, we have to convert into euros, and then issue a refund. Problem is that our client gets his payment minus the fee, which comes back to us still in euros.

So, we have to decide to either convert more into euros and send an independent payment for which our clients will be charged (so we have to send enough to cover the paypal fees), or simply say we are sorry for the conversion fee and then convert the reversal fee back to pounds... another bite for paypal and the remaining for us when it's such a small amount that it doesn't worth this mess, so at the end we are just the same: loss here and gain there.

This doesn't look serious nor fair. Why is paypal not refunding the whole amount to the buyer? I am talking of payments via paypal accounts, not necessarily through banks/cards using paypal.

[PayPal_david]

Hi there evamar,

It sounds to me that you are refunding this payment back to your buyer by pressing the Send Money tab on your PayPal account. If you do this, your buyer will be charged a fee when the payment is received to their PayPal account.

I understand that you transfer all of your PayPal balance to GBP but you could consider leaving some funds in your Euro balance on your account in the event of a payment needing to be refunded. If you do this, you wouldn't then have to pay two currency conversions on the transactions.

I hope this helps,

David. 

[evamar]

Hi David, many thanks for your reply. No, I don't send money, I use the refund option and I refund the total amount of the transaction paid in euros, BUT the client gets the money minus the paypal fee, that comes back to us separately and in euros.

As per keeping some funds in euros, I don't do that because then all the payments in euros would go there and this makes accounting quite complicated as we have to report in pounds.

So, as things are, we are constantly paying for currency conversion, twice when refunding as we have to convert the retuning fee again.

Any tip you could give us about this?

Many thanks and kind regards, Eva

[sskoda]

"I understand that you transfer all of your PayPal balance to GBP but you could consider leaving some funds in your Euro balance on your account in the event of a payment needing to be refunded. If you do this, you wouldn't then have to pay two currency conversions on the transactions.

I hope this helps,

David. "

OR, paypal could set in place a better, more efficient, and fairer, service for their customers. 

Did you know that if a buyer claims back in a currency that you have already converted, even if you have another currency well able to cover the value, your account is placed in negative equity and essentially locked until you convert some money back over? Even if you then "win" the dispute, you have had to pay the conversion fees once again, AND then you have to pay them again as you return the currency into what you wanted it to be in the first place. So three times you convert, instead of one.

That is a STUPID system. If I came up with an operation that worked like that for a client, I'd be fired.  

[evamar]

I agree, it's not a particularly fair system for paypal customers. I cannot understand why you can pay for items in any currency without having to keep funds in that particular currency, but you cannot send a refund in euros from your pound balance and are forced to convert funds instead.  And then to convert the returning fee too...there should be some way of linking the original payment to your funds, whatever the currency they are so that you can refund for the total and in one click.

David, could you please explain the reason behind such a complicated system for refunds in different currencies?

Many thanks

[PayPal_barry]

Hey there, as we get a licence to operate from the individual countries we operate in we are then obliged to work within a lot of the rules and regulations overseeing currency exchange in those countries. Here’s how we set our exchange rate:

• We receive a wholesale rate quote from our bank twice a day and add 2.5% to determine the retail foreign exchange rate to apply to transactions that involve a currency conversion.

• Our currency exchange rates are competitive with conversion rates used by banks and by currency exchanges. (Please keep in mind that some of the rates quoted in the newspapers or online are the inter-bank rates that are available only to the largest international banks purchasing currencies in large quantities. A more applicable comparison for consumers is the exchange rates quoted at airports or other consumer currency exchange shops.)

Your issuing bank typically adds between 1% and 3% to provide a currency exchange. The total cost through PayPal is usually less than many international multi-currency bank transfers. Hope that helps.

[Allomera]

I was sent a refund in USD by a seller but they sent it the wrong way and paypal has taken money off me from the currency conversion. I am roughly £190 short of my complete refund that i should have. The seller said they had no choice but to send my refund back to me the way they have. Will paypal give me the rest of my refund that now paypal owes me? The refund should have gone straight back to my credit card but hasnt and i will be communicating with my cc provider because paypal now owe me money.

[kernowlass]

Paypal do not owe you anything.

It is up to the seller to refund you correctly and if they had you would have received a full refund.