PayPal Returns

leopard37

PayPal changed it's terms (saw posting on the other site). It now will not refund the fees on refunds to the customer. Has this change occurred? I thought the date was Jun. 1, but it may have been Jul. 1.

I have not seen this occur with my refunds as of yet this month. The terms seemed to be USA and Europe, I as a Canadian never got notified with my PayPal account.

On the same topic, how are you going to handle this customer wise? To me if the customer was willing to pay than they should accept a charge if they change their mind (restocking), but I'm interest in all opinions.

Thanks,

Tyson.

minithingsforlife

If a customer cancels an order, there is always a cost. Sometimes that cost is in time, ie having to put away all the items again, sometimes it is money, as in losing fees to a payment provider. As a business, I take these as cost of doing business. It happens that rarely, that I try not to get annoyed at it. In a way it is similar to parcels going missing. You cannot blame the customer, yet if you chose as a business not to insure against loss, you will lose the order amount. It is a cost of business, but one which I feel.

pippyblocks

I posted about this before, as an example I have a few colleagues that sell high value items over on eBay, it's not unheard of a customer to spend a £1000 and then just cancel because they changed their mind. They can do this. Now look at the hit on the seller, it changes everything.

White Horse Bricks

@leopard37 The restocking fee would be illegal in Europe.

Doesn't seem fair to incur costs due to someone changing their mind, but it's their right. It would be even more if they bought the goods, then chose to return them. Again, this would be their right and they would still be entitled to a full refund.

tons_of_bricks

Kinda have to disagree with you there @White Horse Bricks . I don't think it's fair for the seller to lose money because someone was fickle and changed their mind. It's one thing if the incorrect item was sent or if it was defected, etc. But if the buyer changed their mind just because, I don't think the seller should get hurt for that.

Anyway, on topic, I rarely have to give refunds, so I don't see it as too big of a deal and would just probably overlook the small cost.

Calibrick

Clearly I'm smaller then many sellers here and I haven't run into this yet (in the US) as it just (or is about to) kick in, I will certainly accept it as the cost of doing business and build anticipation of this into my part pricing. It just is what it is (and I only sell using PayPal).

From a PayPal POV, I don't find this unfair... even Amazon charges restocking fees on certain items under certain conditions, i.e., you simply changed your mind after receipt. They're incurring server processing, labor, etc., whether the transaction completes or not, so from a business perspective, I do get it. Not that PayPal is poor or anything, but just looking at it objectively.

My two cents, which sounds similar to @minifigforlife :-)

Hoddie

Fair or not, it is a consumer's right to change their mind. In the EU this usually means they're entitled to a full refund (including the cost of basic shipping), and in some instances even the cost of return shipping. Many non-EU countries don't have such comprehensive consumer laws and re-stocking fees are still commonplace.

Regards the refund policy, I don't believe the changes apply to PayPal customers in the EU.

leopard37

It seems clarified on the other site (probably my thread here prompted that one) that the change in return fees wasn't even a change. They will still refund the percentage payment, just not the original processing flat fee, which was always the case and which I do count as a price of doing business.

@White Horse Bricks Illegal?! That's drastic, really don't I have a right to operate my business in Canada according to Canadian law. Europeans can buy off of me if they choose to, with my terms? Or are you stating that if I resided in Europe it would be illegal. The worst perpetrators of charging PayPal fees seem to be from my experience buying are from Eastern Europe.

This is something I've been struggling with, according to the UK if I sell anything there I owe them VAT, has any American or Canadian done this yet and has anyone been contacted.

The trend of individual states losing sales tax to online sales is starting to change laws, however enforcement of these laws still remains to be seen. I can see a point where no one even bothers with selling how we sell just based on the paperwork alone.

Hoddie

You are technically bound by EU law when selling to EU-based customers. Enforcement would be difficult but not impossible (parcels could be seized, funds in PayPal seized, etc.). You need to deal with UK VAT only if your sales to UK-based customers exceed a certain threshold (£100k or something like that).

leopard37

I think the point is mute because PayPal didn't really change their terms, just their wording.

I usually stay on the side of the customer as that is how I started out, but staying competitive and honest in this business is very close to not making money worth the effort.

If PayPal does change to not refunding their fee, I will eat the profits in the future (what's left of them).

Gaston.La.Brick

@leopard37 : To my understanding, PayPal did change their terms.
It has to do with the way how the PayPal fee is calculated. You probably know it's a fixed part (about 0,50 euro) and a part based on the order value (about 5% of the value).
E.g. on an order of 100 euro, the fee would be approx. 0,50 euro flat + 5 euro (5% of 100 euro) = 5,50 euro.
* Previously: PayPal refunded the fee except for the fixed/flat rate part (0,50 euro), which they kept.
* Now: PayPal keeps the whole fee of 5,50 euro.

So I think it's a big difference.

leopard37

Nope, evidence show the opposite, they are still returning the calculated part and keeping the flat rate, that's what I was talking about originally.

Tyson.

abel's bricks

I can confirm that paypal are returning the fee minus the flat fee (20p), they did change their TOC`s but they placed the change on hold due to large seller back-lash. if you want to know a little more and in a much better way than I can explain then watch as this explains it better also his follow up video on the reverse of the change.