Paypal Fees for Refunds

Hobi1202
Contributor
Contributor

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.

 

 

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104 REPLIES 104

tracyb21147
Contributor
Contributor

It is really time that anyone that has this happen call paypal. They will see the cost to answer the numerous calls will be huge.

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karryzhang
New Community Member

Anybody think it`s fair that Paypal doesn`t refund fees for refund anymore  

 

As a small vendor, we need to provide free shipping, free return, now we need to suffer the fees. 

 

 

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SOEKS1
Contributor
Contributor

@karryzhang wrote:

Anybody think it`s fair that Paypal doesn`t refund fees for refund anymore  


PayPal obviously thinks it's fair. I imagine the conversation might go something like this: 😜

PayPal: We have decided to keep our fees whenever you refund a customer, no matter the motive for the refund.
Seller: But if I refund the customer, as the law obliges me to more often than not, there was no sale and I made no money.
PayPal: That's right. However, unlike you, we are NOT in the business of not making money.
Seller: Let me get this straight. Not only do I not make any money but I have to pay you for the privilege of having lost the sale?
PayPal: Yep! That's about the sum of it. If you don't like it, please don't forget to close the door on your way out...
Seller: And you think that is fair and reasonable?
PayPal: Nope, but what you gonna do? You can't make an omelette without breaking a few eggs! 🤣

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Hobi1202
Contributor
Contributor

I know...this is crazy.  I also work for a small business and some of my paypal fees can be pretty high.  Especially if I have a customer that has buyers remorse.  I am now responsible for eating the fees?  I don't think so.  Its just not right.  

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jegas
Contributor
Contributor

I sold a jacket on ebay and a half hour later the buyer realized that it he ordered the wrong size and canceled the order.  The buyer was refunded the full amount but I lose out by not getting the Paypal fee returned to me.  How is this fair?  This is just plain wrong!  And I don't even want to hear that B.S. about that being the "Industry Standard", which it is not!  Something definitely needs to be done about this and looked in to.  

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sharpiemarker
Esteemed Advisor
Esteemed Advisor

@jegas 

 

Do a web search on "do cc merchants refund fees".


Kudos & Solved are greatly appreciated. 🙂
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PlugGuy
Contributor
Contributor

We're still  investigating options.  Looks like Amazon Pay might at least refund the % fees, but has anyone else found a reasonable option that will refund a fee for cancelled orders?

 

We're getting killed like everyone else - with security deposits that are refunded upon return of core parts, and with orders cancelled the first day or two before we ship.  PP should AT LEAST consider a waiver for 48 hours for things like this.  Totally sucks.

 

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abhn
Contributor
Contributor

this is a nightmare, there is no day passing without few refunds, this is another Bigfoot on the top of small business owners...as soon ebay's new payment system arrives i will stop using payPal....the fatter they get the greedier they become

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4macpro
Contributor
Contributor

I'm trying wrap my head around the absurdity of paypal's new refund policy and the bold face lie paypal is spreading by stating this fee stealing is industry practice

 

I've never come across another merchant processing company that keeps the percentage transaction fee on refunds.  I'm taken aback.  I've had my problems with paypal before, but for the most part they have always been fair and reputable in their dealings.  Well, besides paypal at one point holding $10,000 indefinitely due to "risk assessment" and in the same breath sending me endless communications about how they can offer me a business loan. 

 

Just had an eBay buyer purchase a $1269.00 item and within 1 business days ask to cancel the transaction.  "Change of Mind" not what he wanted.  Now, I'm responsible for a $56.14 fee to paypal to refund the buyer. 

 

This is beyond absurd.  I'm sure it's been all over the forums, but I'd like to open a discussion about this bogus financial move by an otherwise "meh" company (paypal). 

 

Who here is in the banking industry?  Does paypal receive the fee percentage back from credit cards / financial institution on refunds?  Can anyone explain this move by paypal?

 

PayPal has said publicly that anyone who disagrees with any of their new terms is free to close their account.  What could this company possibly be thinking?  Are they purposely trying to lose customers? 

 

As an eBay seller what are the other (if any) payment options?  I tried to opt-in to eBay managed payments and received no reply. 

 

I have no issue with companies raising prices or increasing fees if they need to to stay profitable, but paypal has been doubling revenue year over year for the past 5 years.  Why the sudden death squeeze? 

 

Based on my 2018 paypal numbers I had $3,000 in refunded fees.  If those fees were not refunded my increased cost for using paypal would be 13.64% higher with no measurable change in service. 

 

Or in other words paypal is telling me as a customer of 18 years that they want $3,000 more dollars this year for the same service they provided last year...or I'm free to leave

 

Thoughts...🤔

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sharpiemarker
Esteemed Advisor
Esteemed Advisor

@4macpro 

 

Do a web search on "do cc merchant accounts refund fees". Someone is lying. Don't know who. The bloggers/financial/industry sites, PayPal or the cc merchant account processors or we believe what we want to believe. PayPal has been the only one refunding fees forever as far as I can tell and recently said fudge it.

 

Just deduct the amount from refund. Let the buyer dispute it back but I read one instance through the grapevine that PayPal will enforce it if the buyer canceled, meaning the buyer will lose the dispute. Don't know how true that is but something to keep in mind. Or just don't sell expensive stuff.


Kudos & Solved are greatly appreciated. 🙂
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