Refund for large donation and Paypal keeps the service fee??

[LCB123]

We recently had a mistaken donation/payment made to our account in the amount of $2700 when the individual meant to only donate $270.

Paypal immediately took their cut of ~$78, and two days later the donator understandably requested and received a refund for that full $2700. However, our organization is now out $78.

It seems that with enough forethought and such, an unscrupulous individual could potentially make any size payment, request and get the full refund in that grace period and completely ruin our business, and we'd have no way of protecting against it, especially since I see this is stated as a thing at https://www.paypal.com/us/smarthelp/article/is-there-a-fee-for-issuing-a-refund-when-using-paypal-pa.... So is there any way to contest this and try to recoup our losses, as this is a rather large amount?

[sharpiemarker]

@LCB123 

"It seems that with enough forethought and such, an unscrupulous individual could potentially make any size payment, request and get the full refund in that grace period and completely ruin our business, and we'd have no way of protecting against it, especially since I see this is stated as a thing at https://www.paypal.com/us/smarthelp/article/is-there-a-fee-for-issuing-a-refund-when-using-paypal-pa.... So is there any way to contest this and try to recoup our losses, as this is a rather large amount?"

Next time, deduct the fee out the refund amount if refund was no fault of your own or adapt to PayPal policies, otherwise use another payment processor. PayPal is not the only payment processor that doesn't refund fees but the fee vary and may not be as much. PayPal won't refund the fee though. Donations are typically not covered under seller protection either so there's already a risk besides people making errors. If your business tend to get a lot of these kinds of refunds, erect a notice on your site to remind people to be careful of errors when sending money and that a fee will assessed for refunds that are a result of no fault of your own.

[LCB123]

Gotcha.

It's definitely something I'll be bringing up at our board meeting tonight and certainly something they'll be interested in, solely because they were already surprised at the amounts deducted.  Not sure if we can vie for alternatives simply because we've been pushing for Paypal for a number of years. This is the first time we've had this mistake, and yeah, I could set it up those notices and alerts like you're suggesting.

I suppose my other option would be to set up a payment form that doesn't allow for uncontrolled amounts.

Thanks!

[rickdogg82]

If you think that is bad. A company accidentally made a $17K payment to me and received a full refund and I am out almost $800. I had no chance to reply to the dispute and can't speak with anyone about anything. And my account is now locked.

[battyLou]

The paypal policy says they'll keep the fee if I refund a payment received for goods or services.

There's no mention of donations.

I'm from a fully volunteer run not-for-profit association and a generous donor donated twice by mistake so of course I refunded the second one.

Seems like paypal should refund the 2nd fee in this case?