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Is anyone else shocked at Paypal's new refund policy?

Contributor

Is anyone else shocked at Paypal's new refund policy?

I give a money back guarantee on everything I sell - which is so necessary in this age of scams and con artists.  And in my email inbox this morning is an announcement from paypal that they are KEEPING MY ORIGINAL TRANSACTION FEES FOR REFUNDS - when forever, they have refunded that too.  I am shocked and dismayed at this gratuitous money grab. Methinks it's time to do that extra work with the bank and dump Paypal altogether.

10 REPLIES 10
Esteemed Advisor

Re: Is anyone else shocked at Paypal's new refund policy?

@Jennype 

 

I guess they are finally rolling this policy out internationally. The USA got it on 5/7/2019 but supposedly they postponed it due to the controversy it caused in the US but I'm seeing a few reports in the forums that they're keeping the fees. In the US Help FAQs, it still says the variable rate is still being refunded. But I guess they're going to really enforce it this time come October.

 

If the refund is not due to your fault then deduct the fee when refunding. There are certain situations where they aren't taking the whole fee. Read the policy for more details.


Kudos & Solved are greatly appreciated. 🙂
Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

Thanks for the reply kudos... Do you mean deduct the fee from my customer?  Because that would violate my "love this program or get your money back"  guarantee.  I can just imagine it.  Me saying "I'll give your money back MINUS Paypal's $50 transaction cost for this product"  I'm sure that would FILL  a customer with confidence!  NOT!  I didn't know they'd done it in the states.  That's very unfortunate because it sounds like they're unlikely to change their mind even if we kick up enough stink.  More fool them. We're not a captive audience, I'll be looking around for alternatives. 

New Community Member

Re: Is anyone else shocked at Paypal's new refund policy?

I am truly disappointed in this policy. I have a couple of hobbies - comics and telescopes. When someone isn't happy, I almost always gladly refund their money.

 

Now - if I refund their money, I have to pay them the fees out of my pocket, and PayPal keeps the fee?  And - basically - for doing nothing?

 

Well - hope you read the forums PayPal and receive this feedback - I have pushed tens of thousands of dollars through my PayPal account over the years.  

 

You were my preferred means of performing online transactions.  Because of this policy change, you shouldn't expect many transactions from me moving forward.  I don't plan to close out my account, but I don't plan to use it any more either.

 

Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

Reading the email, they are claiming this is industry practice, since when is it industry's practice to rob your customers.  One, might be able to take a hit on small sells, but not when you have larger ticket items.  Then you throw in the customer who used the item, then gives some phony complaint to return.  Saw this happen over the holidays, with Christmas Decorations.   There is nothing uniform with this practice, one person can have a small price item returned, and the person with larger priced items will be looking at bankruptcy.   It doesn't cost them more to process a refund, example $50.00 vs $1.00   they needs to reconsider this, I can see a lot of complaints resulting from this practice.   

Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

I complained to paypal and here's the reply.  They say it's not the WHOLE transaction cost that they're keeping, just the 30 cents USD "fixed " part of the cost.  That takes care of my concerns on the big ticket items, but I expect it's still going to be problematic for people who sell mountains of smaller stuff.

When a refund is issued using the "Issue Refund" link, we credit you back all or partial amount of the variable transaction fee (2.9% of the transaction amount) while the fixed portion of the fee ($0.30 USD per transaction) is not refundable.

If a partial refund is processed, then a partial credit of the variable fee is refunded to you. 50% of the transaction is refunded, 50% of the variable fee is returned to you.

For example, the fee for a $10.00USD payment would be $0.31USD (variable) and $0.30USD (fixed) totaling $0.61USD in fees. If the full payment was refunded you would receive the $0.31USD varied fee back, not the fixed $0.30USD back.

To learn more about variable and fixed transaction fees, click Fees at the bottom of any PayPal page.

Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

This isn't how the email read.

How certain are we that Paypal will not be keeping the larger portion of the fees they receive?

E.g....
Let's say a domestic US customer pays a US vendor $100 for a product.  Paypal keeps $0.30 plus $3 (3%) of the money -- $3.30, and sends us $96.70.

Then let's say, with the current policy, the customer requests a refund, we give back $96.70, and paypal gives the customer back $3.30, refunding their $100.  Then neither paypal nor we receive anything, or, are "out" anything.

The email about the new policy I received "feels" or reads as if we would be refunding $100, and paypal would keep $3.30.

Is that an inaccurate reading?  I.e., if the only change is that I'll now be incurring $0.30 even on refunded transactions, then... this really isn't that big a deal.

Which is it?

Thanks, 
alt321

Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

Surely they couldn't be being deliberately deceptive?  Their $10 example is quite clear.  We get 31 cents back, they keep 30 cents.  Why don't you ask them the question with your $100 example and come back and tell us what their answer is?  This is a BIG deal!

Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

Found on this twitter user's account:  https://twitter.com/seanwes/status/1174826338202640385/photo/1

paypal-image.jpg

Contributor

Re: Is anyone else shocked at Paypal's new refund policy?

Yeah but who is "seanwes"?  Do they know what they're talking about?  It would be fabulous for all of us to ask Paypal themselves, for CLEAR answers under all kinds of situations, don't you reckon?  Is your American policy different to our Australian one?  You don't think they're deceptively creeping in increasingly arduous refund policy in do you?  That would be unconscionable...  Are you listening Paypal?  That would be unconscionable.