For a canceled transaction after payment, do you withhold the PayPal fee from the customers refund?

[thearteryfineart]

For a canceled transaction after payment, do you withhold the PayPal fee from the customers refund? Or do you absorb the loss?

[richard1rst]

As much as many of here would love to do that I am not sure it is possible.

If you cancel the sale through eBay they automatically issue a full refund and then credit you back the FVF.

If you issue a partial refund minus the Paypal fees then the order is not really considered cancelled. In that case you will not get your FVF back. So you are giving away 10% FVF in order to recoup 2.9% PP fees. And eventually, since it is not considered cancelled, you will get dinged for late/non shipment.

Unless someone has developed a work around it is not so much voluntarily absorbing the fee as it is being forced to accept it.

[thearteryfineart]

Yesterday I had a $6600 sale. The buyer messaged me asking if I could send the item to his new address. Address change was done after the payment. Ebay and PayPal both recommended I cancel the transaction and have the buyer re-purchase with the new confirmed address so I am covered by Seller's Protection, ignoring the non-refundable $200 PayPal fee.

Also, now that ebay invoices for most state sales tax, PayPal now bases their fee on the higher gross transaction amount. In the above transaction the sales tax was $570, so PayPal fee included that amount, whereas previously it would not. Just an additional cost seller's have to absorb.

[richard1rst]

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@thearteryfineart wrote:

Just an additional cost seller's have to absorb.

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Well not exactly.

There is a premise in business that no business ever actually pays any expense.

Ultimately every expense in built into the selling price and your buyer is the one who actually pays it.

For example, there is now a push to mandate $15.00 per hour salaries. No business will ever actually “pay” that amount. They will simply raise their prices to recoup the extra expense. Or add automation to replace workers. But it will not actually "cost" them anything.

The same principal applies to increased taxes, rents, insurance, etc etc etc

SO

The only safety net that would seem to work is to add an infinitesimal amount to each sale and mark that as an insurance fund against unrecoverable fees.

Everybody has a different return rate and I do not know what yours is. But in the case you supplied you are going to pay Paypal a fee that appears to be about $193.00 (6600.00 x 2.9 plus 57.00 x 2.9)

If you add a specific tiny percentage to each selling price and put that amount aside in a virtual “cookie jar” from each sale then you have created, at no real cost to you, an insurance cushion against the case you have described.

[thearteryfineart]

Thank you You are correct. Can it still be annoying and frustrating? 😉

[fern*wood]

The announcement by paypal about this change stated some circumstances would result in the fees being refunded, but I've not seen a clear explanation of what qualifies.

[mansons2005]

The only thing I have seen regarding those "circumstances" is a quote published by eCommercebytes, which is a reply from PayPal to an inquiry - as follows:

“This policy will not apply to duplicate transactions, voids and most disputed transactions.”


“A “void” occurs when a transaction is canceled before it has a chance to be settled. This might be a transaction made by mistake and quickly canceled or similar situation. Once the transaction is settled, it cannot be voided, only refunded. Because a void makes it like the transaction never happened at all, no fee was collected from the merchant and thus nothing to refund.”

Ain't THAT clear as mud? I have tried to get that statement translated into layman's terms, with maybe an example of an event where this would apply, but I am getting no place fast.........................................