(Topic ID: 252737)

Oct 11: Paypal begins to screw Customers


By Zitt

45 days ago



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  • 32 posts
  • 17 Pinsiders participating
  • Latest reply 20 days ago by barakandl
  • Topic is favorited by 2 Pinsiders

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10
#1 45 days ago

On Oct 11th; Paypal will begin to pocket all fees related to a refund:
https://www.theverge.com/2019/9/20/20876570/paypal-refund-fee-policy-change-sellers-controversy

This means that as a seller when I issue a refund; the fees Paypal originally collected will not be refunded to the customer. This means of the domestic USA market; 2.9%+.30 will be effectively stolen from the customer. IE if the customer paid $35 to me... the refund back to the customer will only be 33.98.

Personally; I find the whole thing borderline criminal... but there aren't any other options for a small company like mine.

I imagine Paypal's thinking is that the sellers will eat the 2.9%+.30cents on a relatively small number of transactions; but that isn't the case. At least once or twice a month; I have to refund duplicate orders because of Paypal API errors and people resubmit an order. Now this means that those orders won't get 100% of their money back. I also regularly refund overages due to shipping costs - especially overseas. Now I'll have to think twice; or at least remove the 2.9% fees from the refund. Just silly.

#2 45 days ago

Been heavily considering adding stripe as my primary CC payment processor instead of Paypal. Of course, Stripe now pockets the difference as well. Stripe just seems to be a little less crooked than Paypal.

I use Paypal "Advanced" for payment processing (lower monthly fees than Paypal Pro). Paypal doesn't even show Advanced as an option anylonger and are trying to get people to drop Advanced and move over to Paypal Pro instead. Fortunately, I'm grandfathered into Paypal Advanced.
The thing about Paypal Advanced that I despise -- they have a bug with their payment processing. They know about the bug and have no plans to fix it: If a foreign customer uses accented characters then the payment gets rejected every time.

#3 45 days ago

Yeah; I'm tired of PP's BS myself. Stripe doesn't look any better.
Unfortunately; I feel like I've got little choice but to raise prices and/or not offer refunds.
The only people who are being hurt is everyone in the paypal system.

#4 45 days ago

I’ve been much happier using cashapp

#5 45 days ago

I know you feel like this is a new thing that they are doing, but the vast majority of credit card processors keep this money during a refund.

It's called an interchange fee and you can even negotiate it if you do enough volume.

PayPal is just joining the rest of the world on this.

#6 45 days ago

How about a 5% restocking fee for returns, John?

I have always been pissed to pay CC fees for State sales tax....Why should CC companies profit off of tax collection?
(I know the answer...it still bothers me, like a Monthly fee NOT to list my phone!)

#7 45 days ago
Quoted from OLDPINGUY:

How about a 5% restocking fee for returns, John?
I have always been pissed to pay CC fees for State sales tax....Why should CC companies profit off of tax collection?
(I know the answer...it still bothers me, like a Monthly fee NOT to list my phone!)

Depends on the situation, but I don't have a problem with that especially if I made a mistake like clicking twice.

If the company sent me incorrect things or broken items, I would expect to be able to return them and the business would eat that cost as part of doing business.

Perhaps a flat increase in prices is a less complicated way of dealing with it, giving the product enough margin to absorb failures and returns at some calculated percentage.

Art has the benefit and wisdom of having run many successful businesses.

#8 45 days ago
Quoted from Wolfmarsh:

Depends on the situation, but I don't have a problem with that especially if I made a mistake like clicking twice.
If the company sent me incorrect things or broken items, I would expect to be able to return them and the business would eat that cost as part of doing business.
Perhaps a flat increase in prices is a less complicated way of dealing with it, giving the product enough margin to absorb failures and returns at some calculated percentage.
Art has the benefit and wisdom of having run many successful businesses.

Indeed, if the business model can absorb slight increases over restocking, consumers complain less.
Thanks for the compliment, John.
Just an old retired guy.

#9 45 days ago
Quoted from Wolfmarsh:

Depends on the situation, but I don't have a problem with that especially if I made a mistake like clicking twice.
If the company sent me incorrect things or broken items, I would expect to be able to return them and the business would eat that cost as part of doing business.
Perhaps a flat increase in prices is a less complicated way of dealing with it, giving the product enough margin to absorb failures and returns at some calculated percentage.
Art has the benefit and wisdom of having run many successful businesses.

It seems like either way you look at it, the customer loses, either through restocking fees or increased price. Businesses generally don't want to "eat the cost", and with a smaller business, it's difficult to do that in the first place.

I get that for low value items, it's not that big of a hit. But when you start getting into the hundreds or thousands of dollars, it's a pretty significant sum.

What if you're selling a NIB game, and you get an accidental duplicate order? Whoops, that's at least a $150 loss or more. You can't really pass that along to the customer as a restocking fee. Plus, if you raise your prices to cover that, now you have higher prices than your competitors, which could lead to a decrease in sales.

#10 45 days ago

Anything that's an obvious duplicate order shouldn't fall under this 'rule'. They are literally asking sellers to pay for a customers' mistake. If anyone should pay it should be the customer that got click happy, but 'the customer is always right' in paypal's eyes.

#11 45 days ago
Quoted from slochar:

Anything that's an obvious duplicate order shouldn't fall under this 'rule'. They are literally asking sellers to pay for a customers' mistake. If anyone should pay it should be the customer that got click happy, but 'the customer is always right' in paypal's eyes.

If it is a payapl duplicate order you would not accept the paypal amount and that order transaction would not be charged.

#12 45 days ago
Quoted from ForceFlow:

It seems like either way you look at it, the customer loses, either through restocking fees or increased price. Businesses generally don't want to "eat the cost", and with a smaller business, it's difficult to do that in the first place.
I get that for low value items, it's not that big of a hit. But when you start getting into the hundreds or thousands of dollars, it's a pretty significant sum.
What if you're selling a NIB game, and you get an accidental duplicate order? Whoops, that's at least a $150 loss or more. You can't really pass that along to the customer as a restocking fee. Plus, if you raise your prices to cover that, now you have higher prices than your competitors, which could lead to a decrease in sales.

According to PayPal duplicate orders and disputes are except.

I’m just curious if you refund in ‘full’ does the fee reimbursement count as a transaction to the customer and you have to send that also to make the consumer whole?

Mike V

#13 45 days ago
Quoted from tdunbar:

If it is a payapl duplicate order you would not accept the paypal amount and that order transaction would not be charged.

Didn't know that and hopefully any automated software involved on the seller's end doesn't automatically accept these.... I suspect people will be changing any that does!

What percentage of products get returned to pintailers I wonder? I've never even considered sending anything back except a defective mpu board..... but I only buy things I think I need....

#14 44 days ago
Quoted from ForceFlow:

It seems like either way you look at it, the customer loses, either through restocking fees or increased price. Businesses generally don't want to "eat the cost", and with a smaller business, it's difficult to do that in the first place.
I get that for low value items, it's not that big of a hit. But when you start getting into the hundreds or thousands of dollars, it's a pretty significant sum.
What if you're selling a NIB game, and you get an accidental duplicate order? Whoops, that's at least a $150 loss or more. You can't really pass that along to the customer as a restocking fee. Plus, if you raise your prices to cover that, now you have higher prices than your competitors, which could lead to a decrease in sales.

Definitely not an easy situation for a business owner to be in, but I don't think it's fair to expect the payment processors to do things for free either. There are tangible costs associated with processing payments.

Sounds like Zitt is OK paying the fee on a single transaction when he gets money, but in a refund situation he expects the payment processor to give up their processing cost on what has now become two (or more) transactions they have to deal with.

One of my big projects at work this year was taking a product and making it PCI compliant. There's a lot of ongoing feeding and care that has to be funded to keep things secure for clients and provide things like 100% uptime for payment processing, etc...

#15 44 days ago
Quoted from slochar:

Didn't know that and hopefully any automated software involved on the seller's end doesn't automatically accept these.... I suspect people will be changing any that does!
What percentage of products get returned to pintailers I wonder? I've never even considered sending anything back except a defective mpu board..... but I only buy things I think I need....

I get almost zero people wanting to return an item for a refund. If there is a problem people want the item fixed or replaced. Return for refund request has happened on eBay once a or twice that I can remember. I do have situations where someone accidentally buys two items but only wanted one and other things like that which will generate a paypal refund transaction. To get dinged with fees when that happens because of customer accident would kind of suck.

For my situation I don't think I have a better option to use PayPal unless the website is completely redone and implement a different credit card processor. Every time I looked at that I decided to keep with the simple paypal cart method and a free website host. Then I just pay per transaction fee to paypal.

#17 44 days ago
Quoted from Zitt:

but there aren't any other options for a small company like mine.

Square? Stripe? I knownothing about them, but I see them used often, especially at small art and sci-fi conventions and such.

#18 44 days ago
Quoted from RacingPin:

According to PayPal duplicate orders and disputes are except.

EXCEPT that as of this date; Paypal has NO WAY to flag duplicate orders. It's a single "Issue Refund" link and that link doesn't allow you to select a reason. This means - at least as I know it now; I can't flag a duplicate order and get the transaction fees returned to the customer.

<< I do have situations where someone accidentally buys two items but only wanted one and other things like that which will generate a paypal refund transaction. To get dinged with fees when that happens because of customer accident would kind of suck. >>

That's my point. If this was a once a year problem; I'd be ok with it.
BUT this happens once a month. I'm probably going to have to look into preventing dup orders... something very draconian. Like preventing orders from entering the system at all for the same account until it's marked shipped or something.

The REAL problem I have is I know... KNOW there is going to be a duplicate order or a refund expectation and the customer is going to file a dispute over the couple of dollars for the fee. And I know... just know; that paypal is going to side on the buyer and TAKE the refunded fees out of MY account... even when I have a restocking fee. Because that's the way they roll.

#19 44 days ago
Quoted from OLDPINGUY:

How about a 5% restocking fee for returns, John?
I have always been pissed to pay CC fees for State sales tax....Why should CC companies profit off of tax collection?
(I know the answer...it still bothers me, like a Monthly fee NOT to list my phone!)

Why? Because they are essentially "lending" you that money for the sales tax. Makes sense to me.

#20 44 days ago
Quoted from Rager170:

Why? Because they are essentially "lending" you that money for the sales tax. Makes sense to me.

They are lending the money to the customer, not to me. I am doing the state a service to collect, report and send sales tax.
They give me a discount/$$$ for doing this.

#21 44 days ago
Quoted from Zitt:

EXCEPT that as of this date; Paypal has NO WAY to flag duplicate orders. It's a single "Issue Refund" link and that link doesn't allow you to select a reason. This means - at least as I know it now; I can't flag a duplicate order and get the transaction fees returned to the customer.
&lt;&lt; I do have situations where someone accidentally buys two items but only wanted one and other things like that which will generate a paypal refund transaction. To get dinged with fees when that happens because of customer accident would kind of suck. &gt;&gt;
That's my point. If this was a once a year problem; I'd be ok with it.
BUT this happens once a month. I'm probably going to have to look into preventing dup orders... something very draconian. Like preventing orders from entering the system at all for the same account until it's marked shipped or something.
The REAL problem I have is I know... KNOW there is going to be a duplicate order or a refund expectation and the customer is going to file a dispute over the couple of dollars for the fee. And I know... just know; that paypal is going to side on the buyer and TAKE the refunded fees out of MY account... even when I have a restocking fee. Because that's the way they roll.

Can't you implement the duplicate invoice number functionality that PayPal offers? https://www.paypal.com/us/smarthelp/article/how-do-i-avoid-duplicate-transactions-ts1097

Also it looks like Paypal was very clear that this rule change would not apply to the types of transactions you are concerned about: "This policy will not apply to duplicate transactions, voids and most disputed transactions." (source: https://www.ecommercebytes.com/2019/09/19/paypal-clarifies-new-refund-policy-when-it-comes-to-voids/)

#22 44 days ago
Quoted from Wolfmarsh:

Can't you implement the duplicate invoice number functionality that PayPal offers? https://www.paypal.com/us/smarthelp/article/how-do-i-avoid-duplicate-transactions-ts1097
Also it looks like Paypal was very clear that this rule change would not apply to the types of transactions you are concerned about: "This policy will not apply to duplicate transactions, voids and most disputed transactions." (source: https://www.ecommercebytes.com/2019/09/19/paypal-clarifies-new-refund-policy-when-it-comes-to-voids/)

That wont stop a customer from putting two of the same item in the cart, checking out, then emailing asking for a refund.

I guess if that is normal thing for retailers to have to eat with credit cards its just is what it is. Cost of doing business. Doesn't mean I have to like it.

#23 43 days ago

Would probably be better if there was either a flat fee or a percentage fee with a maximum. Couldn't really complain if they're only covering costs with maybe a little bit extra.

#24 43 days ago

Ebay fees, paypal fees, it is all a racket... My opinion is that Ebay is now taking advantage of how entrenched they are. This is exactly the type of thing that made me stop trying to sell anything on Ebay. Once Paypal and Ebay were like one company, this type of thing got going and it was probably the plan from the start. I predict that this is not the last step that is taken to take advantage of sellers and buyers. The more people depend on Ebay, the easier it will be for them to charge extra fees, that largely go unnoticed unless someone points them out... Like the OP said, it should be illegal, but who is going to stop them and make them change back to fair practices?

#25 43 days ago

As suggested by Art; our website now reflects a 5% restocking fee.
There is also a new checkbox in the ordering system that makes the customer acknowledge there is a restocking fee now.

Obviously; I'm going to be fair in this... it the problem is our system - I eat the restocking fee.
If the problem is user error; I'll likely expect the customer to pay the PP fees wither it's 2.9% or 4.x%(international).

Quoted from Wolfmarsh:

Can't you implement the duplicate invoice number functionality that PayPal offers? https://www.paypal.com/us/smarthelp/article/how-do-i-avoid-duplicate-transactions-ts1097

Already implemented. In every case; the system and paypal see a new invoice number for duplicated orders - can't avoid that with the current system of checks and balances.

Quoted from Wolfmarsh:

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

That's just it. With the current system - Paypal makes no effort to flag refunds for an reason. As the seller; I cannot flag a refund as a duplicate order... if they did or will... and then will refund the fees; then great - I'm happy. But as it stands now... with the system as I see it now; There is no way to avoid those fees on duplicate orders.

#26 43 days ago
Quoted from Zitt:

That's just it. With the current system - Paypal makes no effort to flag refunds for an reason. As the seller; I cannot flag a refund as a duplicate order... if they did or will... and then will refund the fees; then great - I'm happy. But as it stands now... with the system as I see it now; There is no way to avoid those fees on duplicate orders.

Are you saying you are completely blocked because they didn't put a button for it?

You might just have to pick up the phone or email them when it happens to get it fixed.

There's probably a conscious decision to not automate that.

#27 43 days ago

Iv started using Stripe over paypal recently and have nothing bad to say about the company in fact there fees are half of paypal the only difference is they hold onto your payments for 7 days but seriously who cares?? If you need the cash that quick your doing something wrong. Iv found 80% of customers choose stripe as its just far easier for them and gives a more professional feel when taking card payments. Id really give it a go if you can.

-1
#28 43 days ago

Cash on glass. No fees yet.....

#29 42 days ago

The *only* downside to stripe is they don't have an archiving function like Paypal does. If you don't take a lot of orders then this would be a non-issue.

When you have 50 or more credits showing up on your account - with paypal, you archive them as you print out the appropriate invoice. To me, this flags the payment as done and you don't have that one still showing on the screen. When I get the known invoices/orders taken care of - I can then quickly determine if I have a payment that wasn't taken care of (e.g. - no matching quote, order or invoice). I use this function all the time and has prevented me from skipping over somebody thinking I had already taken care of it.

2 weeks later
-1
#30 26 days ago

Welp… this just happened to a customer despite these checkboxes on my shopping cart:
PaypalError (resized).png

The APIs malfunctioned and the customer must have clicked thru the boxes without reading them.
He was refunded minus the Paypal Fees... and ofcourse; Paypal has done NOTHING to allow me to flag the order as a duplicate order so that it can be "exempt".

I honestly feel bad for the customer; as PayPal shouldn't be eligible to collect the fees on that transaction. Sadly; my hands are tied.

#31 26 days ago

I see I'm not the only one plagued with Paypal problems that they admit to having and have also said they have no intention of fixing. That's my number one reason for considering switching to Stripe.

#32 20 days ago

I just had this happen to me. Someone purchased an item and thirty minutes later I got an email asking for a refund. I processed the refund and lost the fee. If I did something that makes the need to do a refund I don't have a problem losing the fee amount. As a customer would you be annoyed if I made you eat the fee instead of me in a situation like that?

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