Tomorrow PayPal keeps return fee. Can we Deduct from “Buyer” Refund?

[jewelbiz]

As return handling charge or called something else...

Just last week had return with reason, “changed mind”

Why do I have to pay anything 💰 for that?

What are your plans going forward about this new change?

[papermoneyforme]

And as always, every time postage goes up just increases all the fees even more.

[m60driver]

First, you can not deduct that fee from a refund.  That fee has nothing to do with the buyer.  Second, this has been standard practice in electronic retail processing for decades, long before Paypal or even the Internet.  Retailers were never given back the original credit card processing fees for such transactions on returns.  Third, you should be cost averaging these fees out across all sales.  For many of us this comes out to a very small number per transaction.  If you get enough returns where this begins to add up to a significant amount then you would need to readjust your pricing to compensate, at which point, if you are a low volume seller, you may no longer be competitive.  It is the way of capitalism.

[collectorkp]

Terrible and no excuse for it. It's not standard & they are liars. They take your % fee even if the return has no credit card involved.

[kias]

Well there's not much you can realistically do about any of this - if you stay - except keep track of your expenses and deduct them from your gross profits. At the end of the year if you look at your numbers and decide it's getting ridiculous and other people - USPO - eBay - Paypal made more money than you could - well I'd rethink the internet thing altogether.

[toooldtorock]

"I loved PP, but totally disagreed with the fee grappling this big wealthy successful company is

doing to people with these fees. I do not believe managed payments does this, at least not YET."

Disappointing people like you want to take food out of the mouths of PayPal executives.

PayPal is now a money harvesting operation. They were small business friendly at one point

but it appears they are just another company now. I have been dealing with them for years

but I can no longer tell anyone why PayPal is your better choice when they offer nothing you

can't get elsewhere, sometimes at less cost.

One of the basis of Silicon Valley was they could offer to do more cheaper. Now they are

just operating on all the market will bear.

[klickonline]

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@m60driver wrote:

First, you can not deduct that fee from a refund.  That fee has nothing to do with the buyer.  Second, this has been standard practice in electronic retail processing for decades, long before Paypal or even the Internet.  Retailers were never given back the original credit card processing fees for such transactions on returns.  Third, you should be cost averaging these fees out across all sales.  For many of us this comes out to a very small number per transaction.  If you get enough returns where this begins to add up to a significant amount then you would need to readjust your pricing to compensate, at which point, if you are a low volume seller, you may no longer be competitive.  It is the way of capitalism.

---

You are 100% wrong on the fees.  Retailers WERE and ARE given back a majority percentage of the processing fees on refunds.  Processing (ie merchant) fees are broken down into a few different parts, and the largest part is refunded to retailers on refunds/returns.   The only exception to this is American Express, which is why you always see that some merchants don't take AmEx.     The way Paypal was doing it, with keeping a 30 cent per transaction charge, was more in-line with current merchant processing.   This transition is now 100% in line with American Express, the only credit card merchant that doesn't return the fees.

[chrispycritter007]

Agree with this. I checked with my jeweler who has a brick and mortar store and sells on eBay. He gets credit card fees refunded in the store when there is a return.

I just keep shifting items to other sites where my wallet is less at risk. Look at all the ways sellers can pay extra here: fee penalties when you don't meet nebulous metrics, shipping both ways on a return, items being damaged or something completely different when you get them back, and now this forced money grab by PreyPal.

I consider all these factors BEFORE I choose where to list.

[twnpopcards]

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@jewelbiz wrote:

As return handling charge or called something else...

Just last week had return with reason, “changed mind”

Why do I have to pay anything 💰 for that?

What are your plans going forward about this new change?

---

I am not surprised that this policy was finally instituted as returns from its largest customer seem to continue to increase year over year and it is costing them a lot of money.  The sellers on here are constantly complaining about the increase in returns and how Ebay even seems to encourage it many times.  So we as sellers have to adjust our prices accordingly to allow for the cost of all of these returns and that is all that Paypal is doing.

Ebay has encouraged buyers more and more to feel free to return items, even after they have used them and Sellers have to eat the return costs.  But we are not the only casualty of this policy, so is Paypal through no fault of their own.  So they needed to make a decision as to whether to raise their discount rates across the board to all Sellers, or increase the costs to Sellers who have returns without punishing those who do not.  I am not happy about this change, but I do understand it and understand that it is another ramification of Ebay forcing the Sellers to accept items back for any reason within 30 days.  I do not have much in returns, if anything, so this change does not impact me at all, but for those that have a large number of returns it will be another hit to their bottom line.  I doubt that we would have seen this increase come about if returns were not increasing year over year and the platform does nothing to try to reduce them as the more returns that happen, once again Ebay will wind up making more money as the Seller is then hit with the 5% FVF increase.

The change to return policies is another reason why so many other sellers have diversified where they sell their products and this change will be another reason for more of the same, at least from my perspective.

[kensgiftshop]

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@collectorkp wrote:

Terrible and no excuse for it. It's not standard & they are liars. They take your % fee even if the return has no credit card involved.

---

When you get a payment and Pay Pal processes the payment for you, shouldn't they get paid for it?

Is it Pay Pal's fault the buyer ask for a refund?

Why shouldn't Pay Pal be able to keep the fee they earned by processing the buyers payment for you?

[buyselljack2016]

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@kensgiftshop wrote:

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@collectorkp wrote:

Terrible and no excuse for it. It's not standard & they are liars. They take your % fee even if the return has no credit card involved.

---

When you get a payment and Pay Pal processes the payment for you, shouldn't they get paid for it?

Is it Pay Pal's fault the buyer ask for a refund?

Why shouldn't Pay Pal be able to keep the fee they earned by processing the buyers payment for you?

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One theory is that a big part of that "processing fee" is to cover the transaction, as in protecting the seller in situations where someone claims they did not get the item, and if delivery is shown to the address provided, PP covers us.

Now if the transaction is cancelled, or the item is returned/refunded that protection is not going to need to be provided.

Keeping the fees in those situations make the fee just a non-refundable insurance premium.

[geobra-5125]

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@klickonline wrote:

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@m60driver wrote:

First, you can not deduct that fee from a refund.  That fee has nothing to do with the buyer.  Second, this has been standard practice in electronic retail processing for decades, long before Paypal or even the Internet.  Retailers were never given back the original credit card processing fees for such transactions on returns.  Third, you should be cost averaging these fees out across all sales.  For many of us this comes out to a very small number per transaction.  If you get enough returns where this begins to add up to a significant amount then you would need to readjust your pricing to compensate, at which point, if you are a low volume seller, you may no longer be competitive.  It is the way of capitalism.

---

You are 100% wrong on the fees.  Retailers WERE and ARE given back a majority percentage of the processing fees on refunds.  Processing (ie merchant) fees are broken down into a few different parts, and the largest part is refunded to retailers on refunds/returns.   The only exception to this is American Express, which is why you always see that some merchants don't take AmEx.     The way Paypal was doing it, with keeping a 30 cent per transaction charge, was more in-line with current merchant processing.   This transition is now 100% in line with American Express, the only credit card merchant that doesn't return the fees.

---

Not all merchant banks return fees

[parkersparrow]

I just processed a return today 10/12 and got my transaction fee back. The original sale was from 10/1. Is it supposed to be that they are not refunding the fees on sales made on & after 10/11 now going forward?

[grapplingmonkey]

I totally understand eating costs on returns but if the item is never shipped thats a whole other thing. if its total buyer error then the fee should be deducted from the buyer. its a 2 way street, it  has to be good for me and good for ebay. I just ended a 4k listing on here because im not gonna pay paypal 120.00 bucks if some buyer say oh I didn't know it was local pick up only or some other excuse like can you ship your iPhone to non confirmed address . 

[klickonline]

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@grapplingmonkey wrote:

I just ended a 4k listing on here because im not gonna pay paypal 120.00 bucks if some buyer say oh I didn't know it was local pick up only or some other excuse like can you ship your iPhone to non confirmed address . 

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FYI unconfirmed addresses have been completely meaningless for some time.    Years ago Paypal would only offer seller protection to confirmed addresses, but again, that ended a long time ago.    Whether it's confirmed or unconfirmed, makes absolutely no difference.

[klickonline]

Just an FYI - so far Paypal is not withholding the fees.    No one at Paypal has a clue - called them on the effective date of October 11th, and they said they are having a soft transition that day and the go live will be October 12th, and he actually provided the talking points Paypal gave to them when talking to customers about the change (ie you should raise prices to compensate, etc).    Well, as of today, they aren't keeping the fees (yet?).   Called Paypal to try and get a straight answer, spoke to 3 different people, none had a clue.   One rep tried to say Paypal only charges 30 cents and never keeps any more (completely unaware of the new policy), and the others had no idea why it hasn't changed.   

No idea how a financial institution can operate like this.