Cancel an order - What with the PayPal fee?

A customer placed on order on Saturday and requested to cancel on Sunday. The order was already paid using PayPal.
When a refund is given to a customer, PayPal always keeps the fee.

When I cancel an order (as a seller) because of my error (item not in inventory, damaged, ...) I do a full refund and pay the fee out of my own pocket. After all, it's my fault the order couldn't be fulfilled.

Is it acceptabel that in case the customer want to cancels, the paid PayPal fee is not refunded - since it's non-recoverable?
What's your take on this, as sellers? It's a very small amount (and I probably will refund in full anyway), but I wonder what the other sellers their take is on non-recoverable costs when customer wants to cancel.

Note 1: I have nothing mentioned on this topic in my terms and condition pages.
Note 2: A few months ago, a buyer (via eBay), supplied me a wrong address, so the parcel got returned to me. Buyer wanted to cancel the order after that, and was OK that all non-recoverable costs were deducted from the refund. I checked with eBay, that confirmed this is a valid approach.


  • 3 Comments sorted by Votes Date Added
  • PayPal fees are payments for a service, and the service is provided to you, the seller. It would not be right, in my opinion, to ask your buyers to cover the cost, even if they cancel. PayPal has provided the service - to you.

    I'm not even sure it would be legal to do so in the EU as it may be considered a restocking fee which are definitely illegal. Unless, as in your Ebay case, the buyer volunteers, and even then it may be legal only insofar as there's nobody challenging it.

    Ultimately though, the buyer doesn't get to choose what payment processor you use.

    For what it's worth, I ditched PayPal over a year ago and did not see a noticeable reduction in orders. Stripe also keeps the fees but they're so much more reasonable (0.35 for Bancontact, no %), that it doesn't hurt quite as much.
  • Thanks for the feedback @Hoddie .
    I have been thinking for ditching PayPal too. Maybe it's a good moment to test it out :-)
  • I agree with Hoddie. It's frustrating as a seller that you don't get the fee refunded, but I don't believe that you should pass this on to the customer in any way. You banking fees are just part of doing business.

    In your second example where the customer didn't supply the correct information. I agree you are totally right not to refund the costs involved in sending the order. I would give the buyer the option to pay postage again and resend, or to cancel and refund less costs.
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