Question on new Refund Policy going into effect May 7th.

[Crasoum]

So this morning a subreddit on another site pointed to https://www.paypal.com/us/webapps/mpp/ua/upcoming-policies-full highlighting a change that says "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."

In essence, that both the 30 cent fee (or 5 cent if it's a micropayment account), and the 2.9% (or 5% again for micropayments) fee will not be credited back if a refund is processed. So in effect going from a "net" credit card processing system to a "gross" credit card processing system. (Net being you only pay a transaction fee if a refund is processed but not the 2.9% transaction fee, gross being you always pay a transaction fee and processing fee regardless of if a refund is processed or not).

Then checking twitter I see that it's confirmed that is the case ( https://twitter.com/OUCody13/status/1113114049473138688 ), at least via the twitter support. I just wanted to get verification here if possible that how it is reading, is indeed how it is going to be in about a month. 

[sharpiemarker · Accepted solution]

@Crasoum 

Yes. You read right. It means that PayPal does not refund the variable rate either like they already do with the flat rate portion currently when we refund. So we basically fund the entire amount of refund. After May 7, $1000 USD order, $29.30 USD is PayPal fee. On issuing a refund, we pay $970.70 USD AND the $29.30 USD to make up the entire $1000 USD refund amount. Currently, PayPal would refund the $29.00 and we refund $971.00 USD. 

[Crasoum]

That is unfortunate, thanks though for the confirmation. 

[SmallChange]

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@Crasoum wrote:

That is unfortunate, thanks though for the confirmation. 

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I would love to hear the explanation from PayPal on this money grab.

This could be quite an increase in the cost of doing business. Not a great sales point

for using PayPal and could give competitors quite a sales advantage.

[hb7]

Easy fix, start informing the buyers that they shall pay the Paypal fees in refund situation and suggest alternative payment processors.

Online sellers have no protection, no lobby in Washington and the predators are coming for us :  50 state sales taxes ( plus all the Cities with different tax rates) Ebay constantly tightening the screws......you would think online selling is easy.

[slea]

This does not seem to be solved, but I'm new to community forum.  Our policy change on refunds will go into effect 11OCT2019.  This winds up being a deal breaker for how we use Paypal to accept credit cards.  In other words, one of 2 requests for payments per customer will be a deposit based on customer bringing back equipment (we are a rental company).  Our refund is in full, less .30/transaction.  By Paypal implementing this policy, we have no recourse but to accept credit cards in a different way.  So unusual since Paypal has benefitted from the transaction applying to the rental--there has been money made just by accepting the initial credit card transaction.  When we have needed to go into the amount acting as deposit, we have gladly paid the Paypal fee--just doesn't make sense that the fees get held upon refund. I have appreciated not having to handle our customers credit card information.  This does seem to be a bit of a money grab on the part of Paypal to not allow refunds without charge.  I'm interested to see how others are handling this issue.