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

underwatershop
Contributor
Contributor

We will do everything in our power to move any buyer from PayPal to other payment options and inform the public about this unbelievable move. Once ebay offers a new instant payment option other than PayPal (which will happen in 2020) we will move.

 

We have added the following clause in our online-shop T&C - 'If you have payed with PayPal please note that after October 2019 PayPal is no longer refunding the selling fees on refunds so any PayPal orders will have PayPal fees deducted in any requested refunds.'

 

We have also started a case at the Australian Financial Complaints Authority and hope all Australian PayPal processors can do the same or use a similar body in your country - https://www.afca.org.au/

 

It is clear that PayPal is profiteering from this move as for example the fees PayPal pays to credit card companies such as VISA, Mastercard and AMEX for processing these refunds will refund all credit card charges in full for any refunds. So this can not really be a legal move and simply saying you can leave PayPal if you don't like it might simply not be enough legally --> need some help on this front so any legal person who wants to have a go at the PayPal T&Cs in that regards would be my hero!

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PlugGuy
Contributor
Contributor

Good point on national agency.  Not sure in the US but this place might be the first start.  Anyone tried?

 

<removed>

 

 

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Duped10
Contributor
Contributor

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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ColinPSP
New Community Member

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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divtec1
Contributor
Contributor

I just received a policy change letter that was quite amusing as it included statements (plausible arguments) assuring it's sellers that PayPal keeping the transaction fee for every refund demanded by our buyers is fair, because the letter states "We only adjust our policies when we are confident the changes are fair and aligned with the value that our services provide to your business."

 

PayPal thinks they should now profit on our loses... by keeping the fees for our sales that fail through PayPal's REFUND ON DEMAND policy that is promoted to buyers by PayPal. WTF!

 

PayPal is expecting it's sellers should realize that it's a privilege to use PayPal services and we should also realize just how much money PayPal makes for us. Well, Shulman apparently does not realize that without Sellers (which are PayPal's customers)  there would be no PayPal.

 

How arrogant and stupid... and that is not intended to be a derogatory statement, it's a description.

 

Or maybe it's not stupidity... hmm!

 

PayPal obviously is displaying contempt for it's Sellers!

 

It's as if PayPal thinks Seller's are crooks and buyers need to be protected by PayPal. WTF!

 

I'm out of here!

 

 

 

 

 

 

 

 

 

 

 

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nunyabiddleness
New Community Member

This is a terrible policy I agree.

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alt321
Contributor
Contributor

I will definitely be pushing alternative payment methods -- e.g. Square. 
Paypal just got rid of one of the FEW reasons to stay with them.
They'd better reverse this disastrous business decision.  Because this is definitely enough to send customers elsewhere.
Like me.

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id10t
Contributor
Contributor

Is it true Paypal will be still collecting their fee if you refund someone's money for a product? If this is true I will going in another direction away from Paypal.

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sharpiemarker
Esteemed Advisor
Esteemed Advisor

@id10t 

 

Yes, they are keeping the fee on refunds.


Kudos & Solved are greatly appreciated. 🙂
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Parrgolf
Contributor
Contributor

In line with industry practice and according to our updated policy, PayPal will not charge a fee to process refunds, but the fees from the original transaction will not be returned. Isn't this a great change! It must cost one hell of a lot for the nanosecond of computer time to make the refund of the paypal charges. Reference the industry standard but is it a fair policy...I think not. Will be looking for a remedy that does not penalize seller and buyer. Really just a method to increase the bottom line!

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