Paypal no longer refunding transaction fees on returned/canceled orders, let's hope Amazon doesn't follow!
Starting in May, Paypal announced they are no longer refunding transaction fees for refunded transactions. That means if someone buys something from you via Paypal on another marketplace, and they message you 10 seconds later saying that the shipping address is wrong and they want to cancel and re-order, Paypal is going to keep everything. Not a big deal with the small stuff - but on larger purchases - such as expensive electronics, computers, etc - this is a game changer. Hoping that Amazon doesn’t follow suit - it’s such a negative, greedy policy towards both buyers and sellers. Especially since Paypal itself actually gets refunded a majority of their fees from the credit card providers (ie they aren’t eating the costs themselves, and never have).
Seller_UJmgY6muShUdF
Amazon keeps big part of the fees already.
Seller_zDXVpmGz86diF
So you’re saying that under the new policy in May, if I sell something for $500 and PayPal takes its roughly 3% fee of $15, if I need to refund the buyer for any reason (order cancel, lost in mail, return), PayPal will keep all of that $15? Yikes.
Seller_doIGv47F6liyv
They are probably doing this because Ebay is getting rid of Paypal.
Seller_M04MjNuWAA1Xz
We accept PayPal on our website and in our policies have an order cancellation fee. Some customers feel blind sided by the lack of a full refund, but they are the ones that initiated the expenses. We’ve had some customers get real nasty, and we refused to fulfill their future orders and sent them to one of our distributors where they ultimately paid more for the same items. Regardless, we are in business to make money and are quick to fire customer that cost us money…
Seller_KeMaGRGlvQk5M
That is so lame. I can’t believe the act highway robbery on our money. If an order is cancelled. eBay is going to fully integrate their own payment processor and Google Pay. I talked with eBay and they may even expand to other merchant processors/payment processors. They might even still offer PayPal. I will shut PayPal down once eBay has everyone fully on board. At least it will give buyers a transparent shopping experience without having to log into another 3rd party payment gateway. It’s all about the user experience. PayPal is getting extremely greedy. Many of their policy changes are in favor of making more money. 3% my A$$.
Seller_YZqZQFMixqA3B
When did you get this announcement? I have yet to receive it.
Seller_EVIhpms5t4bMV
Where did you see this information ?
Seller_49pAMBSPEe6HX
Wonder what motivated them to do this. With sales tax bite too it’s getting harder than ever to survive
Seller_8Wfpcf6cHQaPy
PayPal is making several changes, in addition to the abbreviated update below, which includes your subject line:
AMENDMENTS TO THE PAYPAL ACCOUNT USER AGREEMENT
We are updating the PayPal Account User Agreement for U.S. customers. These changes will go into effect on May 7, 2019. If you agree to these changes, you don’t have to do anything.
If you don’t agree with these changes, you may close your account. If you close your account before May 7, 2019, the changes will not apply to you.
Amendments to the PayPal Account User Agreement
We’re removing the flat rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States and introducing a new variable fee of 5% based on the amount you send with a minimum of $0.99 and a maximum of $4.99 per transaction. We’re also removing any variation depending on the recipient’s country.
We are changing the currency conversion spread to 3.25% over a base exchange rate in situations where you are a sender of money in a PayPal transaction.
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.
Frankly, no one is going to like this change, but if all things are on an even scale, a refund requires more work (even if it’s all automated), than a straight sale.
Sellers are paying for “labor”, the same as some of Amazon’s fees, that are not reimbursed, after a return.
However, PayPal does have an offer, that refunds Return Shipping charges, for up to 12 orders a year. Check your account for this little perk:
Exclusions apply. This is an exclusive offer offered to eligible PayPal account owners. With this service you are eligible to receive up to 12 refunds per calendar year (between January 1st and December 31st), and may receive refunds of up to $30 USD per claim. PayPal reserves the right to cancel or modify part of or this entire Offer at any time without notice, for any reason in their sole discretion. See full terms and conditions.
Seller_N3QYgnbSWcfE5
If you sell your own products, or aren’t in direct competition with other sellers, this is pretty easy to account for. Simply take the % fee of the category you’re in and multiply it by your return rate. Then increase your product pricing by that amount to maintain your current profitability.
If you’re in direct competition with other sellers, it gets much more complicated. Hopefully more sellers start to value adequate profit margins instead of squabbling over pennies.
