Showing results for 
Search instead for 
Did you mean: 

Paypal Fees for Refunds

New Community Member

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.



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! 


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.