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

kernowlass
Esteemed Advisor
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@vferdman 

 

The whole point of paypal is to keep c.c. and bank account info confidential and to save the buyer keep entering it in every time that they pay.

Also a lot of sellers are not business sellers and so can't accept direct card payments.


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Scratcher
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Contributor

I disagree with your observation about confidentiality.  There are a lot of reasons to use PayPal, just as there are reasons to use cc or bank accounts.  If buyers have to pay a premium to use PP, or there are discounts for paying with other methods, lots will take advantage of lower prices.

 

I think the direction sellers will go is to offer incentives for more reasonable forms of payment.  There are lots of creative ways to do that.  Until now, PP was the most convenient way for me to take payments, especially for international and/or big ticket items.  Now they are giving me incentives to go somewhere else.  That's just business.

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kernowlass
Esteemed Advisor
Esteemed Advisor

@Scratcher 

 

Fair enough, you have to go with what will work for you really.

I am just pointing out the fact that heck of a lot of buyers use paypal as its convenient and gives them buyer protection.

So not offering it may be cutting off your nose etc etc.


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tonim522
Contributor
Contributor

Yes. I just experienced this first hand with a rather large purchase that was cancelled before i shipped. They deposited the amount minus the fees but then withdrew the entire amount to be refunded to the buyer. I lost 168.55 as a result with no sale. I too, will be closing my paypal account. Shocking policy but confirmed that it was not a mistake with their resolution center. *smh*

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Elfent
Contributor
Contributor
Yup! True! Here we are in 2021 and PayPal has scammed me!! They are holding on to fees for a transaction that did NOT go through due to bunch of ERROR MESSAGES on their part!!
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NewPolicy
Contributor
Contributor

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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kernowlass
Esteemed Advisor
Esteemed Advisor

@NewPolicy 

 

Bye then.


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RetroClinic
Contributor
Contributor

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?

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jumpshowhigh
Contributor
Contributor

I agree...this is a complete ripoff and absolutely predatory.  The "In line with industry practice" is especially precious.  Because other companies **bleep** you, it's acceptable for us to **bleep** you.  F.  Paypal.  I know Stripe has the same B.S. practice, so who's everybody using for credit card processing that doesn't have a "**bleep** our customer" policy?

 

SLS

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ChrisVH
New Community Member

Yes, this is complete, utter nonsense. Standard industry practice is complete B.S. I've operated a small business for nearly 17 years, and have accepted PayPal the entire time. I will now inform ALL 10,000 of my customer base (mostly recurring customers) that I will either need to A) Stop accepting PayPal (most have credit cards anyway) or B) They will NOT be refunded the PayPal fee if they make a make mistake or the order needs to be returned. This will result in less business for PayPal if A) I don't even offer as an option any more B) Customers laugh at the notion of any product return getting whacked between 2.9% to 4.5% by PayPal. Yes, about 4.5% is what the fee is for my International customers, which is about 40% of my overall business.

 

PayPal might think small businesses like mine should be able to absorb and and not pass along the butt reaming to their customers? NO way. Bad for business, and certainly not tenable for a small business that is already forced to compete with the likes of Amazon free returns and free shipping.

 

An NO, PayPal... this ISN'T industry norm. I also accept Visa, MC, Discover, and Amex as Payment options, and none of them charge these fees beyond the per transaction fee that is a whopping .05.

 

Whoever the genius is at PayPal that decided to institute this policy needs to have their head checked. 

 

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