PayPal Will Now Keep Transaction Fees, Even After Refunding

The new rule will see PayPal retain any fees incurred for payments that are refunded on the platform. This means if you refund a payment on PayPal, you will no longer be credited up to 2.9% + $0.30 transaction fee, leading to a net loss of up to $29 on a $1,000 payment refund.

PayPal Returns Just Got Even Worse

The news has already ruffled the feathers of eBay sellers who have to worry about other overhead costs, including shipping fees, packaging and often return postage fees when accepting returns. The policy change is expected to roll out on October 11, 2019, and will not apply to duplicate transactions, voids, or most disputed payments. PayPal has stated the move is in line with current industry practices, following the lead of one of its major competitors — Stripe. However, some have argued that this policy update is all about the bottom line, attempting to squeeze its customers for as much money as possible, and is not actually industry standard at all.

PayPal reinstates controversial policy of pocketing fees from refunds https://t.co/luXZ6IpFR8 pic.twitter.com/uJfamwzOSz

— The Verge (@verge) September 20, 2019

Not Quite the Industry Standard

PayPal previously announced a similar change back in April but walked back on their plans after facing public backlash, with users threatening to boycott the site, or move to less costly alternatives such as Facebook Marketplace. Regardless, officials behind the online payments processor appear to have settled their nerves and are once again looking to enforce the change. It remains to be seen whether customer outrage will again lead to PayPal canceling the new policy. According to some sources, users affected by the change will receive an email outlining the new policy. It is unclear whether this is change will apply globally. The author of this article did not receive a notification email despite being a long-time PayPal UK user. As it stands, it appears that the policy only applies to customers in the US. PayPal notes that you are free to close your account if you do not agree to or accept the new change. Many users appear to be planning exactly that, with Square cropping up as a common choice for those looking to cut costs. What do you think about PayPal’s new policy change? Is it a step too far? Let us know your thoughts in the comments below!

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