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Paypal Fees for Refunds

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Contributor

Paypal Fees for Refunds

According to the new Paypal user agreement effective May 7th, paypal will no longer credit you back the fees when a customer gets full refund or even cancels an eBay order before the item is shipped.  

 

Does anyone have any suggestions on how to handle this financially?  I sell for a business and this is going to throw or net deposits off on a regular basis.

 

 

1 ACCEPTED SOLUTION

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Esteemed Advisor

Re: refunds

@lee_2003 

 

Paypal no longer refund the fee.

They keep the fee as payment for processing your buyers payment for you and then processing the refund for you.


Advice is voluntary.
Kudos / Solution appreciated.

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New Community Member

Paypal not refunding original fees on full refunds ... Can destroy businesses

My wife and I are using Paypal in USA for over 10 years. Our combined Paypal accounts earn $400,000+ in sales annually, and we pay monthly for Payflow Pro. This new policy as of May 7th, 2019 where as Paypal will still take all fees (even if we refund an order 100%) - this is setting our business up for great financial losses!

For example, our payflow settings were to "review" and NOT auto accept orders over $500 that were "unusual." Today, Paypal approved order for almost $800 without using the review flag that I had set! My third party fraud filter Subuno flagged it as fraud (as the order was placed in Ohio and being Shipped to New York - over night shipping).

Now, if Paypal still takes fees on this fruad refund, we loose $24+ dollars and we are in the negative for this one order. This fraudulent person can do this over and over everyday until we go bankrupt (knowing that paypal payflow rules won't even work properly) this is very scary, misleading and irritating!

To be honest, I would RATHER Paypal charge us to 4-5% plus $0.30 for a good sale and return all fees on refunds. I would be OKAY with paying extra for processing knowing that I can cancel fraud or customer cancellation requests without having to worry about paying fees for orders that I didn't even keep the money for. If Paypal does implement this, and DOES NOT return transaction fees on refunds, we will have no choice but to take our annual business of $400K to Square.

Perhaps Paypal should allow customers to choose a billing subscription fee type: (i.e. 4-5% with NO fees taken on refunds ... OR a different plan with 2.9% but non-refundable fees on refunds). I hope someone at Paypal forwards this post to a supervisor. Please submit this as both a complaint AND a suggestion. We are very upset and nervous about this new policy as fraudulent competitors can drive each other out of business! 

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Contributor

Re: Paypal not refunding original fees on full refunds ... Can destroy businesses

i agree it is absolutely disguising how paypal do this but its just another case where the sellers get **bleep** and the buyers can just do what ever they want

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Contributor

New PayPal terms & conditions concerning refunds

According to the June 6 2019 update, if a merchant refunds a customer's purchase, PayPal will no longer refund the fees taken for that transaction. This seems rather unreasonable but just in case I have misunderstood the situation, I would like to suggest a test case:

A customer places an order for an item but has inadvertently selected the wrong item. He still wishes to make a purchase but the item he wants costs less than the item he ordered in error. In order to avoid raising credits and issuing a partial refund, the simplest method is to refund his original purchase and let him place an order for the correct item. Am I to understand that if I do that, I will now be penalized by PayPal by having to absorb transaction fees for a sum never physically received?

I'm sorry if I worded that a little harshly but those fees will only add to the burden of an ever-lower bottom line.

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Re: New PayPal terms & conditions concerning refunds

I think it's ridiculous that we, as the people who essentially keep company's like Paypal (etal) running, have to spend countless and frustrating hours TRYING to get help from the 'Institutes' when we have been scammed or duped out of our money!  Especially when online shopping is becoming the preferred way of shopping and we have NO CHOICE but to PREPAY for an order and, TRUST the seller to be HONORABLE...!

Then, adding to THAT gamble … we feel it necessary to APOLOGIZE for any "harsh language" we express when expressing our CONCERNS and COMPLAINTS! PayPal is indeed, in need of an upgrade to be PROTECTIVE of their Company AND their Customers …!  Get on a Pride Parade, PayPal!

I applaud you SOEKS1 and hope you actually got a satisfactory resolve? 

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Contributor

NOT REFUNDING 2.9% FEE IN THE EVENT OF A RETURN IS A DISGRACE

We have done a ton of business through PayPal since 2007, often paying $1000 USD per month in seller fees, in addition to using PayPal to purchase the majority of our inventory.

 

Unfortunately I will not stand for this new fee structure. No other payment provider does this. It's terrible for the sellers and buyers who have supported your service. This is 2019, online returns and cancellations are expected. Disgusted with you and ready to move on. 

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New Community Member

Re: NOT REFUNDING 2.9% FEE IN THE EVENT OF A RETURN IS A DISGRACE

I agree. I came here to confirm if this is true. I regularly take security deposits as part of a bigger transaction. Trust me, PayPal gets paid well. When I refund the portion that is a security deposit, I will now have to eat a $10 charge. No way. PayPal has lost my business until this is reversed. 

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Rip Off Notice!! PayPal to no longer refund the 2.9% merchant fee on refund

Paypal sent out a notice of policy change today.  It said that if you get paid by paypal and your customer returns the goods and asks for a refund that any fees paid to paypal will not be refunded to the seller.  I was dumbfounded by this.  I use Paypal Here with a credit card reader at my shop where I sell $3000 bicycles.  I thought I must be reading this wrong.  So if my customer asks for a refund, Paypal is keeping the 2.9% from the transaction?  Here is what I emailed support and their reply:  CRIMINAL.

 

My message:   'I just received a Notice of Policy Update. One of the updates states - 
>"We’re changing how we treat refunds. If you refund (partially or fully) a transaction to a buyer or a donation to a donor, there are no fees to make the refund, but the fees you originally paid as the seller will not be returned to you."
>
>Does this mean that if a customer purchases a $3,000 item and then returns it for a refund that I will not recover the 2.9% merchant account fee paid to paypal? Please advise.

 

Paypals response:  " Thank you for contacting PayPal Customer Support. My name is Brittany and I am happy to assist you. That is correct. If an item is returned it would no longer cancel out the fee from the original transaction. This change goes into effect May 7th. Have a great day."

I am outta here.  F paypal!
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Esteemed Advisor

Re: Rip Off Notice!! PayPal to no longer refund the 2.9% merchant fee on refund

@NewPolicy 

 

Bye then.


Advice is voluntary.
Kudos / Solution appreciated.
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Contributor

Re: Rip Off Notice!! PayPal to no longer refund the 2.9% merchant fee on refund

Can an Admin / Moderator confirm if this policy applies to UK accounts as well please?

 

If so, can they also confirm that giving customers the "middle finger" by saying that we're free to close our accounts, will also not force us to stop trading on the eBay platform, that still seems to require payment through PayPal?