Understanding refund process / fees

[DaFoot1]

Hello all,

I'm trying to understand the way Paypal has handled refunds to end up at the balance I have.

So background.... I'm handling payments for event registration for a not-for-profit group. Website is setup to register people and take payment via Paypal, which all works.

Unfortunately we had to cancel an event recently, so I went through payments issuing refunds.

So at £20 a time per person there was approx £1200 in the account when I started issuing refunds. In the mean time I'd had a single £20 payment for another event.

So I expected my balance after refunds to be approximately £20 (minus fees). It actually ended up just shy of £10, so apparently £10 down.

Can anyone here help me understand what happened to that £10? In the transaction log it looks like fees are refunded to me as I issued refunds, is that correct?

Do Paypal actually refund all fees when I issue refunds back to customers?

[kernowlass · Accepted solution]

@DaFoot1

When someone pays you, your fee is 3.4% + 20p per transaction (I am presuming you are UK as you are talking in pounds).

So when you issue a refund Paypal credits the 3.4% part of the fee back again for you BUT they do not credit back the 20p as that is kept as a processing charge for doing the initial payment for you and the refund.

So basically for each refund you 'lose' 20p.

[DaFoot1]

Thanks for that.

I spent some time last night picking through transactions and figured I was getting differing fee values refunded.

At least I understand why now so I can explain to accountant!

[Hectorsmum]

I’ve been lead to believe that as from October 11th 2019, PayPal will no longer be refunding the 3.4% fee, if you issue a refund to a buyer.

[kernowlass]

@Hectorsmum 

Thats correct.