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Mixed PSA: New PayPal policy regading returns and refunds!

Casinostocks

Casinostocks

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Joined
Mar 20, 2016
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*10/28/2019: I have decided to change the rating from BAD to MIXED because some BF community members seem to think that it will be a good thing as much as bad thing, so let's just roll with this. FWIW, I still think that it is BAD and the reasoning for it, a disingenuous one!

This is going to be PayPal’s new policy to take effect as of this Nov 1st, per an email I had received from PP yesterday:

“snip...
In line with industry practice and according to our updated policy, we will not charge a fee to process refunds, but the fees from the original transaction will not be returned. This policy will not apply to duplicate transactions, voids and most disputed transactions. You can review the PayPal User Agreement for more information on our return policies.”

So basically if you accept refunds via G&S, PayPal will keep your 2.9% + $.30 for payments issued from US accounts. More if you sell to international locations and then get hit by a return scenario! This dumb policy will lead to 2 more issues which will affect PP’s bottom line:

- More F&F transactions
- More difficulties regarding acceptance of returns
 
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From what you quoted: "This policy will not apply to [...] most disputed transactions."

Seems like this isn't the end of the world, and you just need to have the buyer dispute the transaction rather than refunding it yourself.
 
kreole said:
From what you quoted: "This policy will not apply to [...] most disputed transactions."

Seems like this isn't the end of the world, and you just need to have the buyer dispute the transaction rather than refunding it yourself.
Click to expand...

Too many disputed transactions and you will have a negative bearing on your PayPal account which will lead to PP holding onto your funds for longer. The policy is nefarious.
 
They had already been keeping the $0.30 transaction charge...but this one could get expensive. It will be interesting to see if the other options follow suit.
 
The interesting blurb is about this practice being “industry standard”. I’m not aware of any bona fide credit card processor which does this! That one is pulled right outta their you-know-where!
 
I wasn't sure they weren't already doing this. Someone brought this up some time ago(April give or take), but I cant find the thread.
It shouldn't have that great an effect-how many returns do you get? I have only had a couple in hundreds of transactions over 10+ years. All totaled it may have come to $25.
Not to say I like the change
I will still make anyone with a legit claim whole.
 
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Peter,

My OP was meant as an informative post as opposed to a panic button post. I have very little concern about this policy which I definitely describe as a BAD policy and hence the attributed suffix of my thread. During my time buying and selling on here, I have only had two cases when someone was not initially happy, mostly due to some form of remorse or extreme nit-picking despite my super anal way of verbose description + pictures, when at the end given the option to return both parties decided to hang onto their purchases. So agin, I am not concerned much with this policy as a hobbyist who sells at times.

The new policy will affect me as an online seller of automobile parts and accessories because although the rate of return is not super high (2% to 5%) it still amounts to something! This policy is a typical squeeze on the little guy kinda policy where huge entities like PayPal in their infinite wisdom arrive at this kind of squeeze in order to polish up their own bottom line. Some may say, well, cost of doing business and I get that. So you may ask, where and when it will really affect guys like you and me, as knife hobbyists who once in a while decide to sell and let go of our knives?

Putting my real life business challenge aside vis a vis this kinda policy, the knife vendors who we both knives from will be affected by this bad policy and if they start to lose money on already slim margins, they will most likely spread the loss in form of increased pricing back onto their customers and/or will start charging a re-stocking fee. Again none of this is meant as sky-is-falling or end-of-the-world gripe but I still maintain that it is a squeeze which always hurts the little/small guy. It is just bad!
 
Not a good policy change, but it sounds like it wont affect most transactions.

Could be worse.

I've only had to use the dispute option once in the past few years, and thats because the t shirt company i ordered from was taking literal weeks to respond to my emails about a shirt that never shipped. So at that point, i would not care about their 2.9 percent. Sucks to be them.

Edited because i misread the above posts.
 
I believe that the policy doesn't apply to refunds within 24 hours - which is relevant to cases of unwanted currency conversion, incorrect amount sent, etc. Please do correct me if I'm wrong though.
 
IDK. The way I see it there is a cost to the service they provide. They have infrastructure and employees they pay, no matter if the transaction is reversed. They can either pass that cost along by raising their transaction fee across the board or still charge the fee, even on returns or refunds. Pick your poison.
 
Also, another thing for the buyer and seller to argue about or not?

I’m thinking of the time I purchased a refurbished laptop (recommended by a friend) that I never received. It was never “refurbished” well enough to ship.

The seller said he would reverse the deal but keep the fee. That didn’t happen under the old policy. I wasn’t going to fight with him, but it didn’t come to that.

Under new rules, I can see his insisting that he will “restore” it (I just need to wait longer or pay more) or just ship it in unstable condition —leading to more PayPal complaints. (If that’s the case I hope PayPal, is ready for more contention.)
 
Casinostocks said:
Peter,

My OP was meant as an informative post as opposed to a panic button post. I have very little concern about this policy which I definitely describe as a BAD policy and hence the attributed suffix of my thread. During my time buying and selling on here, I have only had two cases when someone was not initially happy, mostly due to some form of remorse or extreme nit-picking despite my super anal way of verbose description + pictures, when at the end given the option to return both parties decided to hang onto their purchases. So agin, I am not concerned much with this policy as a hobbyist who sells at times.

The new policy will affect me as an online seller of automobile parts and accessories because although the rate of return is not super high (2% to 5%) it still amounts to something! This policy is a typical squeeze on the little guy kinda policy where huge entities like PayPal in their infinite wisdom arrive at this kind of squeeze in order to polish up their own bottom line. Some may say, well, cost of doing business and I get that. So you may ask, where and when it will really affect guys like you and me, as knife hobbyists who once in a while decide to sell and let go of our knives?

Putting my real life business challenge aside vis a vis this kinda policy, the knife vendors who we both knives from will be affected by this bad policy and if they start to lose money on already slim margins, they will most likely spread the loss in form of increased pricing back onto their customers and/or will start charging a re-stocking fee. Again none of this is meant as sky-is-falling or end-of-the-world gripe but I still maintain that it is a squeeze which always hurts the little/small guy. It is just bad!
Click to expand...

My comments weren't directed specifically at you, and I agree with all you have said. If the vendors get hit with the fees on returns they will have to pass it on someway. It's hard for them to gladly take back returns if they get hit for 2.9%+ each time. The vendors have some clout , so hopefully they will let PP know their feelings.
I appreciate your bring this to our attention as I do all others that provide us with such info-Thanks
 
Lance Leon said:
I believe that the policy doesn't apply to refunds within 24 hours - which is relevant to cases of unwanted currency conversion, incorrect amount sent, etc. Please do correct me if I'm wrong though.
Click to expand...

I would presume that when the policy goes into effect, there will be some form of an options menu as to the reasons for issuing a refund. One option may very well be for voiding a transaction, for reasons such as item not being in stock or issues with the buyer’s shipping address. Such cases may carry a time limit of 24 hours but I do not really know at this point. But if so, there will be a certain amount of honesty and honest disclosure that PayPal will have to rely on coming from the seller and as to the reasons for issuing a refund.
 
I think it could cut both ways.

One scenario: PayPal was getting a lot of bum sellers who now will think twice about sending “junk” or the wrong product if the fee is at risk?

Other case:

I had a Japanese buyer who gave no usable email or address. I was forced to cancel the sale…or leave it open for him/her to file a complaint against me?

Everybody wants a bigger bite.
 
Casinostocks said:
This is going to be PayPal’s new policy to take effect as of this Nov 1st, per an email I had received from PP yesterday:

“snip...
In line with industry practice and according to our updated policy, we will not charge a fee to process refunds, but the fees from the original transaction will not be returned. This policy will not apply to duplicate transactions, voids and most disputed transactions. You can review the PayPal User Agreement for more information on our return policies.”

So basically if you accept refunds via G&S, PayPal will keep your 2.9% + $.30 for payments issued from US accounts. More if you sell to international locations and then get hit by a return scenario! This dumb policy will lead to 2 more issues which will affect PP’s bottom line:

- More F&F transactions
- More difficulties regarding acceptance of returns

Well done PayPal, yer dumb fudgers :thumbsdown::mad::thumbsdown:
Click to expand...
I don't know, seems like a bit of an overreaction based on your business which is outside of our hobby.

I think it is safe to say that for most things in life, costs are going up. This can be seen as a reflection of that. When spyderco, or BM, or Zt raise prices people lose their minds. What folks forget is that the market is more dynamic than they think. A price increase first quarter may not mean increased profits in the 4th, just getting back to even.

Further, if PayPal or Ebay or whatever isn't working for you based on their policies, you may have to do a cost benefit analysis of continuing to use these institutions, or you could just bitch about it. I'm sure PayPal did a cost benefit and decided this policy based on the results.

As a seller here, I don't like it but it won't stop me from selling, just more careful. If I had a business that used PayPal, I'd look at passing off the cost or using a different service. If PayPal isn't the best game in town, use another service.

annr said:
One scenario: PayPal was getting a lot of bum sellers who now will think twice about sending “junk” or the wrong product if the fee is at risk?
Click to expand...
This is a real thing, and could be an absolute positive in this policy change. Sellers should be held accountable for listening their products incorrectly. Currently, on Ebay, there is a lot of high volume sellers that list a butt ton of stuff to see what things will sell. Much of it is cheap junk. In order to save their feedback they hand out refunds like candy. PayPal gets nearly nothing for handling these transactions. Are they not entitled to something for handling seller mistakes?

Just in the last couple months, I've had 3 sellers on ebay unknowingly misrepresent items, drastically. All admitted fault and gave partial or full refunds. Is the work that PayPal does to protect me as a buyer worth the fees for sellers not doing their do diligence? I think it is and sellers should know that. Think twice as a seller.
 
^ not an over-reaction vis a vis the knife hobby as the rate of returns, particularly in our own Exchange in here happens to be extremely low because of the community based nature of this Site. However the squeeze factor is real and it is weasel-like way of improving the bottom-line as opposed to raising the cost of transaction processing. Why do I deem it as weasel-like? Because this is not industry standard as they claim in their email, a snippet of which I posted.

I do understand, appreciate and have experienced, as a buyer, the malpractice of sh*tty sellers. There are valid points in there not to be trifled with. That said, also there isa factor in there that affects the good and the conscious sellers:

Most people just don't off'ing like to read any more! Most platforms have shifted to mobile devices and most folks look at titles and decide to purchase. Again, the following case does not apply to our hobby here but it is still a case study which is actual and not dramatization:

Email from a potential customer: will this part fit my car which is Model Year XXX, blah blah...

Me: Hi, sorry it will not. Please note the compatibility chart and also the description for fitment. Thank you.

Another email, same guy: OK, I read but are you absolutely sure? The dealer price is 3 x as much as I want to save good $.

Me: No, I am sorry it really will not fit. I am sure of that.

Order rings 10 minutes later with the comment: I think that I can make it fit, please send :confused:

Me: I am sorry, it will not fit. I am offering free shipping and free shipping back. It will not fit and I want to cancel this transaction based on mutual agreement.

Email: Please do not cancel and ship. If doesn't fit, I'll sell it or throw it away. My buddy says it fits!

A week later email from eBay: Item sold not as described! Automatic return approved!

Then you will have to get on the phone to eBay for an actual human to review the presented material to consider for ruling in your favor which is a waste of time but according to eBay when you accept returns, YOU MUST ACCEPT RETURNS. In such case with Paypal's new policy, a seller like me will be out of an additional $15 with no recourse. Of course, you can always refuse the same at the outset risk the potential of receiving a negative feedback and then call eBay again to argue your case to have it removed but then there is that time you spend on the phone.

There are sh*t sellers and there are sh*t buyers. It's a cost of doing business online but it pisses me off when more unnecessary costs are reflected to me. If you ask me as to why I even do business on eBay, the answer is because as FUDGED UP as eBay is and their whole business model is becoming so antiquated, their eBay Motors / Parts & Accessories is still the 800 lb. gorilla that no one else, even Amazon has managed to replicate! eBay & PayPal will eventually decouple in 2021-2022 and as of now, eBay refunds cancelled transactions due to returns, voids, etc... But I have a sneaky suspicion that they will also follow suit.

GB&U is a platform for meltdown and rants too, yes? OK, rant over ;)
 
^ BTW, this is an actual example from someone who was kind enough letting you know to expect problems :D Most dumb-dumbs don't even bother reading anything! They probably only do a price based search and make up their own minds!
 
Yeah, I had a person order the wrong item (I sell one product in 2 versions). It is impossible to select the one she did without doing a dropdown menu. The default it what she wanted.

After receiving what she ordered, she sent me the nastiest email (we are supposedly professional colleagues) berating me and my product, and how could I possibly send her the one she received. (Read your Paypal receipt!)

I cancelled the sale, issued a refund and told her to reorder the correct one. She never did--which was fine as she was obviously not able to handle her own mistake or recognize it and possibly admit it?

But it seems this new policy will affect sellers like me who send the correct item (it was new) and need to reverse the sale to preserve inventory records. (I could have simply swapped out the item--and she returned it damaged to boot--but that is not the way it is done.) Like you say, who wants to argue about all of this? Fortunately, she is the minority. But perhaps there will be a mechanism if the buyer orders the wrong item, and this sounds like it will take extra work to fix on everyone's part if there is an exception.

BTW, one of my colleagues has gotten so fed up with PP that he only does bank transfers and with great success. (Items in the 5-figure range.)
 
^ there are always pros and cons and we can cite actual examples. I still maintain that this kind of policy which is totally false being peddled as "industry standard" is not currently an actual industry standard practice which perhaps PP may be marshaling in that direction. This will also encourage more F&F when more folks find out about it. F&F can not happen on sites like eBay but it is still prohibited on here where it is left to the sellers' and the buyers' own discretions even though such practice seems to turn off over 80% of the denizens of this Site. Full disclosure: I'm firmly anti F&F, no matter what of this policy.
 
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