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Less than 48 hours left to process PayPal refunds for free

By Chris Dawson March 4, 2020 - 11:00 am

You will want to be extra assiduous this week in processing all your PayPal refunds before Thursday. As of Thursday the 5th of March 2020 PayPal will start to retain all fees from transactions that you refund.

Since 2011 PayPal amended their terms and decided to keep the 20p fixed charge if a refund took place. Now, PayPal have decided that if you have to refund a buyer in a ‘Commercial transaction’, they will keep all of the fees you originally paid. With the PayPal refunds fee change taking place on Thursday it makes sense to process as many refunds as you can prior to that date, especially for higher value items where the fees will be larger.

Ideally you’ll be processing refunds on a daily basis anyway, but we know businesses are busy, especially at the start of the working week, and it’s easy to let refunds slide and do them after the last post on a Thursday. That’s bad business as an unhappy buyer doesn’t want to hang around waiting for their refund – delays just make what in their eyes is already a bad experience worse – but this week if you hang around until Thursday to process PayPal refunds it’ll simply end up costing you more anyway.

With PayPal keeping fees from refunded transactions from Thursday – for many it will be 2.7% of the transaction plus the fixed fee, you’ll want to assess your returns rates and decide if your prices need to increase for all customers in order for those buyers who keep their purchases cover the fees for those that return them. This seems unfair, but it’s no different to your other business expenses – buyers that return goods already don’t contribute towards warehouse and staffing costs, only buyers that keep their purchases pay the bills and PayPal fees will be no different.

From Thursday, returns will be just that little bit more painful. We don’t know how eBay Payments will handle fees on returns yet, but if you want to find out you can express interest for early migration here. (Expressing interest doesn’t mean you’ll be forced to migrate but it does give you the option of moving sooner rather than later if it suits your business to do so).

  • Barry S.
    3 months ago

    You mean less than 24 hours…

    The 5th March is Thursday – tomorrow!

    • 3 months ago

      What am I needed to do

    • Melissa
      3 months ago

      Does anyone know why we pay a cash advance fee??? Idk about you but I have never taken a cash advance, so why does EVERY ONE of my bills have a fee for cash advance I didn’t take. They’ll make it look like they refunded you for a return but the money never is returned to your available credit. There really needs to be a call made to the attorney general and a class action lawsuit .

  • DaveP
    3 months ago

    Bloomin heck, I assumed that it would only apply to new sales transactions dated from the 5th, not backdated sale refunds!

    We sell lots of A/V tech, plenty in the £500-£1000 region. Time for a rethink.

  • 3 months ago

    “Kerr-ching!” said a boffin at Paypal, blissfully ignorant of the impending customer revolt, ditching them in favour of other providers.

  • SAM
    3 months ago

    Just Pure Greed from PayPal, we are. bumping them from the website anyway

  • NorthCrystal
    3 months ago

    Increasing prices (to accommodate the PP fee) on wonderful eBay?! Haha. Must be joke of the year.
    In our category it’s decreasing prices for past 14 months.

  • William hogg
    3 months ago

    I have been in dispute with PayPal for almost three months over goods not as described. I returned goods to China via royal mail tracked and insured. They have denied my claim and so I have lost approx £60 Inc return postage. So PayPal still support fraudulent traders.

  • 3 months ago

    PayPal are an absolute joke. I cancelled my account after they tried to refund a customer despite them already being issued a manual refund by eBay (& proof provided). That would have seen me £1000 out of pocket. Don’t get me wrong, I got it sorted in the end but it took weeks!! Hours spent trying to speak to someone on the phone, being told different info each time! The threat of court action and in the end…. Twitter! Funny how they only responded and jumped into action after I put it out there on Twitter! Unfortunately though, they have a monopoly. I’m sure that will change in time… But how long do we have to wait for it and at what expense in the meantime?

  • Stevie
    3 months ago

    I sell digital goods online and I have had multiple people scam me stating that they haven’t received their goods. PayPal instantly refund them and now it will actually cost me money to do that! I am definitely going to look for a different option where PayPal is not included. If people want my products they will find a way to purchase them without PayPal.

    • Liam
      3 months ago

      if buyers pay through friends and family instead of goods and services they can’t charge the money back 🙂

  • 3 months ago

    Let’s see how pay pal can you help me

  • 3 months ago

    I think it’s quite bad when a charge will be made when you are due a refund people will stop using PayPal and closing accounts with them, PayPal should reconsider this Urgently.

    • 3 months ago

      Buyers will not be charged to receive a refund.

      Sellers will face higher costs.

      Sellers may need to pass on the higher costs, by raising their prices slightly.

  • 3 months ago

    I think it’s quite bad for having to pay a charge for receiving a refund, people will stop using PayPal and closing accounts with them, PayPal should reconsider this Urgently.

    • 3 months ago

      Too late already done. We use Paypal for ebay at the moment and when ebay payments comes in they will be gone. We had them on our two websites and liked them but as soon as they took on the ebay mentality of short term gain over long term then we got shut. They are well over priced and there are a lot of excellent payment processors out there what do a better job at a cheaper price. There greed will be there downfall!

  • 3 months ago

    Ridiculous. Being charged because you received the wrong item or a broken item from a seller is unthinkable. The only person that should be paying any fees should be the seller. After sometimes waiting a month for your item and I’m being charged because something’s wrong with it it is preposterous. Time to stop using eBay and PayPal.

    • 3 months ago

      As a buyer, you won’t be charged for receiving a refund.

      As for your broken items, wrong items and extremely late items, it should only happen to you once in a blue moon if you buy from a good seller who is located and registered in the same country as you. If it’s happening often, then it’s time to start choosing who you buy from more carefully.

    • Cil
      3 months ago

      These fees ARE for the seller.

  • Heatherly Grayson
    3 months ago

    Paypal just sucks..they rip people off..hold funds for no reason..they are the real scammers

    • Toni , Michelle,Null
      3 months ago

      I lost money ordering merchandise from eBay a few years and never got a response from eBay about some tiny phones *(posh jellypro)and a set of sheets that were for a gift I ordered how could I get a copy of my purchases so I can get some answers about the money that was taken in lieu of thier promise. please help me I’m sure if it is at all possible you will investigate to restore correct respect and faith in your company.thank you

  • Gary
    3 months ago

    PayPal fees are already extortionate and to charge more again be goodbye not for me anymore rip off merchants

  • Wanda G Yancy
    3 months ago

    I want a refund please!

  • Patricia Gloyd
    3 months ago

    I order online because it’s saves me from running around . Paypal realises that most people do not return incorrect orders. I have received broken or used items that I don’t have the time to repackage and mail. When the seller receives their defected item they sell it again. Purchasing unusable items is big business. Most purchasers pay and do not return. On several occassions out of many I call a report the product defect but I don’t have time to return so I keep the unusable item. Now I’m sure that they rebill me. Bad businesses are built around selling defected materials, sending incorrect sizes, products that do not look like their pictures. I now only reorder certain brands. I eat the rest. This policy will weed out those types of sellers. The good sellers send coupons so that u can order directly from them.

  • 3 months ago

    I have been fighting with PayPal since Sept. 2019. Sent me five wigs that were not the ones I ordered. And would not send me address so I could send them back. Never got a receipt for what I did order .Finally got the address and sent them back. I never got my refund back, Am still fighting with PayPal. So as of now I am out the wigs and postage.
    Thank you, Sharon

    • Gordon
      3 months ago

      Your comments are so unfounded and not being truthful. Any reason like not receiving or wrong item you get a refund. It’s outrageous your saying something so ignorant. Buyers always win there case when they file a claim. This is why I hate e-bay and PayPal. Please don’t make up stories like this Sharon.

    • 3 months ago

      Sharon, you are just one among THOUSANDS who are somehow missing a very important thing! It is too late now I would think? But if you receive Counterfeit, fake, other than described items anything. Simply contact your bank and ask for a CHARGEBACK. This is a quite legal and proper way to get your payment back.
      As your card issuer your Bank is actually responsible for reuniting your money with yourself if you can show you have been relieved of your money because of a fraudulent transaction. Suggest looking at or contacting your Banks Customer Service team?
      Of course, the only thing is with all of this! You do need to have paid with a Credit or Debit card! And the best thing!! It even works for PayPal Friends and Family payments!! Do some research.

  • 3 months ago

    Pay Pal are a BUSINESS!! Which is JUST like some of the respondents in this conversation. But refunds for buyers don’t really figure?? And Pay Pal is a stand alone company (Even MORE SO in the very near future!) and as a Company I am pretty sure they have done the homework and run the figures and the logarithms!! 😊. And this is there COMPANY DESCISION? Yes??
    And when ALL the multi million pound companies that Pay Pal provides their services for whatever?? Now if ANY of those companies ditch Pay Pal? THEN it will prove most of the above right!?! 😊.
    Anyone taking bets??

  • 3 months ago

    It’s just like PayPal expects everybody to pay for it we got packages sent to us that wasn’t even supposed to be with us and we got charged from PayPal it’s not it’s not right now it’s my phone PayPal should get their things straight instead of accusing people paying for something they didn’t pay for

  • Ema
    3 months ago

    Its disgusting what PayPal are doing its hard enough for people to get refunds but PayPal to keep it SHAME ON YOU better rethink you will be losing loads of customers and you have brought it in yourselves

  • 3 months ago

    Some of these replies are like readers letters to Viz, or can be read in the style of Vicki Pollard. Either some good trolling or some people who are very bad at understanding how online shopping works.

    • Barry S.
      3 months ago

      Indeed… perhaps the way to go is a mandatory IQ test before connecting to the internet. That would also cut down a lot of returns (and indeed, sellers who can’t grade their items properly)

      Now if the layperson is reading this news and PERCEIVING that fees are being passed to the buyer, not the seller, then will have a serious problem..

    • 3 months ago

      What a sensible and WELL thought out post Sir!! 😊.
      Only wish there were more like this? 😂.

  • 3 months ago

    I have been screwed over myself they took my money and didnt give it back i will never trust them again

  • 3 months ago

    eBay fees, PayPal fees, plus sales tax on all eBay sales in my state. Not even worth it anymore. Greed mongers.

  • 3 months ago

    The very last statement says that only a layperson would think that all fees are borne by the buyer and not the seller. That’s the wrong statement as the buy utimately pays all the fees, directly or indirectly. Without the buyer, the seller has no way to get money for his products.

  • Jonah
    3 months ago

    A perfect crapstorm for PayPal. Sellers furious that fees are being withheld for returns, some buyers all up in arms because they aren’t aware of the full picture. No buyer will be out of pocket- it’s just the sellers who suffer but then again who am I to preach the truth and bang the drum for PayPal?
    The sooner we are out of PayPal the better- we are working on this now by removing them from our websites. As soon as is possible we will go to eBay managed payments

    • 3 months ago

      Jonah, perhaps when that DOES happen you could re-visit this forum and tell us just how it is now going (SO RIGHT) for you?? 😂.

  • 3 months ago

    I’ve never had a problem knock on wood,however I do wish sellers would include receipts I’ve never gotten a receipt with any order

    • 3 months ago

      Like so many of the replies, this is nothing to do with Paypal, but got me thinking.

      Most receipts/invoices from an online purchase would be on a piece of A4 printer paper. A typical A4 piece of paper weighs about 5g.

      For the fiscal year 2019, Royal Mail delivered 1.2 billion parcels in the UK. If each of those parcels had an A4 size receipt/invoice, those pieces of paper alone would weigh a combined 6 million kg. And that’s just those parcels sent with Royal Mail, never mind all the other couriers!

      And what do most people do with the piece of paper inside a parcel, that tells them what that thing they just ordered is and how much it cost? They put it straight in the bin!

      So just imagine a fleet of hundreds of trucks, with 6 million kg of paper on board between them, driving for miles and miles around the country, using loads of diesel in the process, then taking it all to to recycling, or landfill.

      Adds up, doesn’t it? That’s why my business doesn’t send any paperwork unless it’s totally necessary. All the info anyone needs for an online purchase is available on the site they bought from, or through email confirmation, so just print one off if you really need to.

  • Pete
    3 months ago

    I need to check the clarification for this, however does it only apply to sales that customers have refunded or item not received cases. If it doesn’t apply to item not received cases then surely sellers will be stating item shipped on their larger items and letting the customers claim back the long way?

  • 3 months ago

    We removed PayPal from our websites months ago and we also don’t accept PayPal on eBay.

    It’s been hard going on eBay but it has given us time to refocus our stock on that channel whilst looking forward to their managed payments.

    • 3 months ago

      Erm?? David my friend! To REFUSE PayPal payments on eBay is against POLICY!! (YOU REBEL with a cause you!! 😊)

  • Pat
    3 months ago

    PayPal keeping fees for returns, looks like either a desperate move from a failing business or a monopoly abusing its position.

  • Dav
    3 months ago

    Stripe will be doing the same starting April 1st. It’s also virtually a guarantee eBay will soon do it with Managed Payments. Because why wouldn’t they? It’s not called GreedBay for no reason. All of these ecom and payment processing companies have almost no restrictions on the ways they literally steal money from customers. They’re allowed to do it and will continue to do so. That’s why they’re always coming up with more schemes. There needs to be government intervention and consumer protection laws to stop this. Doubtful that will ever happen though. Too much corporate greed and the government is on it too. It’s all about the money, they don’t care where it comes from. Crooks all of them.

    • 3 months ago

      It would only take one to not follow suit. They’d clean up.

      And if they don’t, time to start a new business up as a payment processor 🙂

    • NorthCrystal
      3 months ago

      Stripe is doing so already as that’s what I found on their website:
      “You can issue either partial or full refunds. There are no fees to refund a charge, but the fees from the original charge are not returned.”

    • Dav
      3 months ago

      Maybe it’s not in effect yet, or they jumped the gun early to get in on the action. Since PayPal started this they’re all gonna do it. Corporate crooks only see bad buyers as an opportunity to take more money without regard to sellers/retailers getting screwed over. Bad ecom buyers are an epidemic. Senseless order cancellations, returns, claims of not as described or not received, wanting some or all of their money back, many of these buyers being fraudulent. But the corporate crooks don’t care, they need more revenue money trying to satisfy their Wall Street masters. This is a completely crooked game. Ecommerce has become a disease.

    • 3 months ago

      Mmm, oh dear Dav. Ever looked into the DISTANCE SELLING regulations? Sort of Tells pay pal and in fact ALL sellers in the UK what laws/rules they have to follow?? 👍🤔😉

    • NorthCrystal
      3 months ago

      @dav
      Get a little rest perhaps. You seem tired of this all. Or change the profession. Or why don’t you become one of those non caring corporate crooks that make millions…. Nothing stopping you.

    • Dav
      3 months ago

      @chrisgodd21 Policies are often available well before they actually go into effect. What are you even saying?

      @NorthCrystal That’s pretty much my point wasn’t it? These platforms are doing nothing but drive customers away. When they’re all copying each other doing the same things it leaves nowhere else to go.

      Anyway both of you sound like shills defending these practices and everyone must follow what they do because it’s their playground. Blah blah blah… If you enjoy being shafted by these companies that’s your problem. Everyone doesn’t need to fall in line.

  • Al
    3 months ago

    Who (big or small) would offer paypal as a payment gateway now?

    I hope they rot

  • Paul
    3 months ago

    I use Paypal for business on ebay and my own website. And I’ve been exclusively using them on my website for nearly 10 years. As of today I will be ditching them on the website, and as soon as I can change to ebay managed payments, I will do so.

    Bad move Paypal.

  • Chris Allen
    3 months ago

    Government should step in to defend small business’s in this and make it illegal. Either that or we should be allowed to pass the charge back to the consumer (unless it’s faulty, not as described).

    And while the government are doing that they should make it illegal for marketplaces to choose an exclusive payment provider. It’s stopping competition. It’s like going to the Trafford Centre and you only being able to pay with Barclaycard or something. It’s ridiculous.

  • Pete
    2 months ago

    I have heard that given the current circumstances paypal are waiving fees on refunds till 30th April … has anyone else seen this?

    I think the overall practice is a complete disgrace, surely distance selling dictates that all refunds are refunded including to the payment processor – NB are Paypal not regulated by the financial ombudsman? If so these firms are charged a fee (quite large) for each case brought against them, even if they win or loose hence everytime they hold their fees back on a refund if we all brought a case up withthe ombudsman it could be very very expensive for them – worth a thought

    • Lee Pearce
      2 months ago

      @Pete

      Unfortunately the law refers to Business to Customer

      We, as a business must refund 100% of the purchase price to the customer for a simple return.

      Any costs the the seller has to pay, fees, shipping, packaging etc are borne by the seller.

      This paypal stance has been in the US for a while now, however in the US, you can charge a restock fee.

  • 2 months ago

    @pete.
    Pete,fully agree with your niew my friend! Have my own personal problem with both eBay and PayPal over returning Counterfeit items to China. And at MY EXPENSE??!! 😊. But the DSR’s only applies to UK transactions and as I now realise a lot of people on here are NOT in the UK I fear??
    But your premise is of course 10%correct!! And I for one do support any action that helps these US companies to appreciate that US rules are NOT applicable to the UK 🇬🇧. 😂🤣😂.

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