PayPal October Policy Changes - Now They Keep All The Fees When You Issue a Refund

King Tightarse on 18/09/2019 - 09:38
Last edited 18/09/2019 - 10:08 by 1 other user

Well, in line with eBay and PayPal's policy of ever expanding worse deals for people, I just got an email from PayPal (we all did) that states:

"We want to let you know that the policy change is going into effect beginning on 11 October 2019.
In line with industry practice, and according to our updated policy, we will not charge a fee to process refunds, but the fees from the original transaction will not be returned"

As far as I can tell, that means when you are a seller and there is any reason to issue a refund, they intend to keep all the fees PayPal currently charge 2.9% so if you sell a $1000 computer and the buyer cancels, you pay $29 + 30c for the pleasure of NOT doing the deal!

Outrageous!

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Comments

  • wannagrababargain on 18/09/2019 - 09:59
    +11

    Wow Paypal basically in a monopoly position now and can get away with this. Not sure that I buy the "in line with industry practice"? What industry are they referring to? They aren't a bank, they are a payments processor, and by far the biggest one..pretty much Paypal IS the payments processor industry therefore it sets the agenda for industry practice. So saying it's "in line with industry practice" is just a self-referential statement (We made it policy so we're following it!)

    • King Tightarse on 18/09/2019 - 10:06
      +9

      eBay automatically issues a PayPal refund when there is a return. Its fully integrated.
      Paypal are nearly a full monopoly and are basically giving the middle finger to all their customers with this terrible move, much like Photobucket tried to several years ago.
      I hope this is the start of some serious alternatives emerging

      • Bargainbeth on 23/09/2019 - 23:37

        The profanities I want to use for paypal and eBay are endless.

        But eBay are apparently rolling out a new payments system, I think it was called beemo or something? But they told me after its rolled out, paypal won't be a necessary thing for sellers to accept.

  • [Deactivated] on 18/09/2019 - 10:00

    I used to sell few items in eBay, being a casual non-business seller is harsh. I hate the fact that they offer the free listing and make the cutout of Paypal payment. Recently I've been selling the product either in FB marketplace or gumtree (which has an enormous amount of scammers, who tend to contact you via email or SMS).

    • Bargainbeth on 23/09/2019 - 23:39

      I never get scammers from Fb as my email/phone aren't on there. Always from gumtree.

  • Quantumcat on 18/09/2019 - 10:01
    +7

    That's ridiculous, so if someone pays you accidentally now you lose money when giving them their money back. Even if the payment was completely unsolicited.

    • King Tightarse on 18/09/2019 - 10:08
      +2

      I called them just now to check and yes, its just as written.
      Someone buys your $1000 laptop and then decides to cancel: it will cost you will cost you $29.30

      • Some Guy on 18/09/2019 - 16:51
        -1

        Can you return only $970.70 to the buyer to cover it? That way the buyer wears the cost of cancelling.

        • King Tightarse on 18/09/2019 - 16:59
          +2

          Well eBay have it jigged up so that you just hit 'return' and it automatically does the whole process. Any less than the whole amount and they consider it a 'partial refund' or 'adjustment' and don't refund the fees (can be a lot)

      • Bargainbeth on 23/09/2019 - 23:43
        -1

        That's ludicrous, they should hit buyers with that fee instead. Kinda like how when I ask buyers to pay through fnf and they agree. Then send it through g&s "accidentally". I make them pay the same amount with the fee back through fnf with a walk-through.

  • elgrande on 18/09/2019 - 10:11
    +2

    Thanks for letting me know. From now on I will use.. ummmm…erm.. damm, looks like its paypal :/

  • EightImmortals on 18/09/2019 - 10:19

    Gee, if only someone setup a website where people could buy and sell their stuff using an alternative currency that bypassed the sticky fingers of the current establishment, like bitcoin for example.

    Oh, yeah, speaking of examples: https://freeross.org/

  • jimbobaus on 18/09/2019 - 10:34
    +1

    Enough people complain here:
    https://www.afca.org.au/
    maybe (i mean maybe) they might rethink it

  • FireRunner on 18/09/2019 - 10:50
    +6

    It just keeps getting worse for eBay sellers.

  • King Tightarse on 18/09/2019 - 10:51
    +6

    I guess this is really going to clash with eBay plus, which was supposed to be all about easy 'fault-free returns'. No seller is going to want to do any returns now as it will cost them PayPal fees plus postage.

    • Whisper Quiet on 19/09/2019 - 16:14

      I'm not sure about all sellers. Maybe those bigger power sellers on ebay would have immunity to this policy. Or they only lose a fraction of the fee. Can't see any of those companies staying if the have to lose out on so much.

      • bbqwer on 19/09/2019 - 16:18

        Correct. My paypal excluded from this policy. My ebay turnover about $1.4M per annum.

        • King Tightarse on 19/09/2019 - 16:26
          +3

          So PayPal are just screwing over mr and mrs average guy.

        • Zachary on 19/09/2019 - 22:17
          -4

          Well I can probably see it from their point of view; they're trying to get rid of all those scammy sellers. That's the only reason why they enforced this policy on mediocre and those one off sellers since the top sellers aren't affected, naturally, since they don't tend to scam people out of their money….so I guess in a way it's revenge on us for scamming buyers…..

          So all that will eventually be left using their system are genuine sellers who aren't scammers….

  • Hithere on 18/09/2019 - 11:32

    Looks like the few items I occasionally currently sell on eBay will now be listed on either Gumtree or Facebook and for cash pickups only.

    • lucas001 on 18/09/2019 - 16:19
      +2

      facebook sels much easier than ebay these days anyway… I've made the switch a while ago.. Ebay is last resort and you should price the item higher to compensate for the fees.

  • Typical16-bitEnjoyer on 18/09/2019 - 11:40
    +1

    What an absolute joke.

    I have a bunch of things I'm listing on eBay. I'm not even going to risk selling them now. Even if I sell before 11 October I daresay they'll retrospectively apply it.

  • skinner on 18/09/2019 - 11:42
    +3

    PayPal have been increasing a lot of their fees in the last 12 months (eg. removing thresholds for sellers to get discounted fees). I have been assuming it is in response to eBay bringing in their own new payment system. Hopefully eBay gets on with it and phases out PayPal altogether ASAP.

    • HighAndDry on 18/09/2019 - 12:14

      Aren't they owned by the same company…?

      • Baysew on 18/09/2019 - 12:25
        +1

        Separated in 2015.

        On Jan 31, 2018 eBay announced that, "After the existing eBay-PayPal agreement ends in 2020, PayPal will remain a payment option for shoppers on eBay, but it won’t be prominently featured ahead of debit and credit card options as it is today. PayPal will cease to process card payments for eBay at that time

        • B-Man02 on 22/09/2019 - 22:43

          anyone know how this will affect the ebay digital giftcards that come from paypal?

      • FireRunner on 18/09/2019 - 12:25

        I think they separated at some stage

    • FireRunner on 18/09/2019 - 12:25

      eBay is bringing in a new payment system?

      • singingwolf on 18/09/2019 - 19:34
        +1

        Yes, they announced some time ago they are moving to Adyen soon.

        • King Tightarse on 18/09/2019 - 19:36

          …which makes it very strange that PayPal are making themselves less attractive

          • singingwolf on 18/09/2019 - 19:39

            @King Tightarse: Maybe looking to milk it while they can

            • King Tightarse on 18/09/2019 - 19:51

              @singingwolf: Looks like eBay will have Adyen rolled out by 2020 and transitioned most people by 2021, so not long now. Very strange timing IMHO

              • singingwolf on 18/09/2019 - 19:56

                @King Tightarse: All on the eBay site. I suspend they will get a bigger cut. I wonder if our costs will come down

                • King Tightarse on 18/09/2019 - 19:58
                  +2

                  @singingwolf: Perhaps a little at first to sweeten it, but you know eBay: fees and bastardly conditions only head in the one direction

                • DeafMutePretender on 11/10/2019 - 04:21

                  @singingwolf:

                  I suspend they will get a bigger cut. I wonder if our costs will come down

                  This is what's going to happen: eBay will force Ayden on everyone and to "entice" them, it will have a tiny discount compared to PayPal (1% difference at max). After this honeymoon period (6, 12, or 18 months), eBay will raise fees to the point that PayPal looks attractive again. Too late to change though, Ayden will now be the new monopoly and too entrenched in the system and everyone gets screwed over again.

                  To anyone reading this in 2021, I told you so.

    • DeafMutePretender on 11/10/2019 - 04:16

      Hopefully eBay gets on with it and phases out PayPal altogether ASAP.

      You assume that what eBay replaces PayPal with will be better…

  • T-man on 18/09/2019 - 11:58

    It’s still better than Afterpay, they charge 5.5% merchant fee and keep the fees if returned or refunded for years and now PayPal does the same thing. I hate PayPal and Buy now pay later merchants, credit cards are good enough for e-commerce.

  • whooah1979 on 18/09/2019 - 12:16

    They are basically recovering years of free refunds.

  • profar on 18/09/2019 - 12:24

    Wonder if merchants have the right to state due to PP new policy refunds will cost 3% to customers returning goods ?

    I'd be betting not .

    Probably biz has to calculate returns % and adjust accordingly .

    • T-man on 18/09/2019 - 21:05

      Why not, but then the customer won’t make the purchase and your conversion rate goes down.

  • [Deactivated] on 18/09/2019 - 14:13

    That will nickel and dime combined shipping refunds, too.

  • xinyi on 18/09/2019 - 19:58
    +2

    Problem is Buyers sometimes won't pay if Paypal isn't available as an option

    • AlexF on 06/10/2019 - 09:15

      (Purely as a buyer) PP gives me confidence and a recourse. No PP, no buy.

  • foxmulder on 18/09/2019 - 21:17

    This practice of not refunding fees is bad for company image as if those fees are important for them to keep. Most marketplace will always refund sellers in the case of refund to buyers, heck even Aldi, refund customers those payment surcharges.

  • Linkwick on 19/09/2019 - 07:25
    +1

    They used to keep the transaction charge ($0.30) anyway when refunding, only refunding the % of sale charge.

    Cr card merchants operate the same - you get most of the fees refunded to seller, but not all.

    If Paypal are going all-out greedy, that's a really shady move. Really need a decent alternative to crop up.

  • TheRealDeal1 on 19/09/2019 - 10:08
    +3

    We received notice that this would apply to online merchants from 7th May 2019.
    I actually mentioned this in comment sometime in May.

    Anyway we completely removed Paypal as a payment method from our site as we do a few refunds and with Paypal keeping their fees even on a refund would eat into our margins.
    It definitely did have an impact on business initially, as some buyers only feel comfortable paying with Paypal.
    It took a while, but thankfully business is back to normal now.

    See the article (dated 7th April 2019) I linked to in the previous comment here: https://www.techspot.com/news/79545-paypal-new-refund-policy…

    Talk about arrogance - see the last line of the article: "PayPal has said that anyone who disagrees with any of their new terms is free to close their account."

  • MrBillions on 10/10/2019 - 23:29

    Sold all my shares in PayPal in protest

  • DeafMutePretender on 11/10/2019 - 04:13

    Wow, add this to the endless list of price rises in Australia.
    https://www.ozbargain.com.au/comment/7814317/redir
    "Low level of inflation" my butt, Reserve Bank of Australia.

    This is ridiculous. If they're going to add this fee, it should be paid by the person responsible. If seller makes a mistake, they pay the fee. If buyer makes the mistake, they pay the fee.

    Buyer: Buys $50 PS4 game
    Buyer: Sorry, my son stole my phone and bought this item by mistake. Plz refund.
    Seller: loses $1.5

    Buyer: Buys $200 2TB hard drive
    Buyer: Oops, I misread. I thought it said 3TB. Plz refund.
    Seller: loses $6

    Buyer: Buys $1000 iPhone
    Buyer: Buyer's remorse, mate. Refund plz.
    Seller: loses $30

  • King Tightarse on 11/10/2019 - 07:54

    @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

    This is live today folks!

    You might want to think carefully before selling on eBay with PayPal because from today you fully exposed to full PayPal fees for any and all refunds.

    @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

    • singingwolf on 11/10/2019 - 19:17

      Yeah I'm worried. Have an item that seller says is not working $200. So on top of loosing the item and postage, another $6 on top.

  • dlakers3peat on 11/11/2019 - 16:01
    Merged from Beware PayPal new policy regarding refunds and how they process refunds

    Yesterday a person bought a watch through ebay and paid via PayPal. Long story short he decided he didn't want it anymore so I promptly refunded him. All this was done in the space of 15 mins. The ebay sale was $1665 and I got 1621 in my PayPal account.

    When I refunded the ebay sale, PayPal took the money out of my savings account which is linked instead of the funds that where available from the sale in my PayPal account.

    When I rang to complain, i was told PayPal do not refund the fees for sale even though it was refunded within 15 minutes of receiving the funds(new policy apparently)

    So then I had to transfer the funds in my PayPal account into my savings account to cover the refund.

    So basically I was overdrawn because PayPal took the money out of my savings account to cover the refund instead of the funds available in the PayPal account from the sale.

    After an expletive laden converation with PayPal they acknowledge that this made no sense and apologised.

    They refunded me the PayPal fee from the sale(about $41) and a nominal overdrawn fee that my bank will charge me.

    If I could I would cancel my PayPal account but need it for items I sell on eBay.

    • [Deactivated] on 11/11/2019 - 16:10

      Sorry but the non refund of fees was announced and came into force on the 11th October. The source of funds with Paypal has been a crapshoot for a long while.

    • Bruno28 on 11/11/2019 - 16:13

      Yeah that's their new policy. Refunds don't include fees. And that's how they will kill their business.

  • SlavOz on 11/11/2019 - 19:41

    Wow, this is as scummy as it gets. I'll admit there are way too many dodgy sellers on eBay and this will likely weed some of them out, but it's also going to weed out everyone except those major stores or chains who can afford to lose money. Your average part-time seller or the occasional person looking to get rid of a personal item will not survive this. It's basically becoming a game for only the mega rich.

    Kind of sad given that part-time sellers or just the average everyday guy looking to sell unwanted stuff are the people who made eBay what it is. They're screwing over their most loyal early adopters for the sake of helping big retailers, who used to be their enemy number 1.

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