PayPal Gets More Serious About Refunds...

22 replies
According to recent updates to PayPal's TOS; the fixed fee that is charged per transaction will become the liability of the Merchant, starting August 10th, 2010.

Originally Posted by PayPal

Refund

After August 10, 2010, the Fixed Fee portion of the Transaction Fee will be deducted from your Account at the time of the refund, in addition to full payment amount that is refunded to the buyer.

Fixed fee portion of the original Transaction Fee.
(The Fixed Fee will depend on the currency of the payment, so if the payment was made in USD then the refund fee is $0.30.)

Reference URL
This doesn't come as a surprise to me since the recent modifications to Visa/MasterCard International's TOS; (full fledged merchant accounts will be making modifications to their TOS, as well -- so nobody is immune to these changes).

I don't personally see this as a big problem, because you can simply add the fee into your pricing structure.

I had created an Excel spreadsheet that helped me price my products/services factoring in PayPal's transaction fees a while back. Figured I'd make it available to Warriors; however, you'll only be able to access it from inside the WAR Room.

(WAR Room post to come later, today).

Stay informed...
PLP
tecHead
#paypal #refunds #serious
  • Profile picture of the author Mohammad Afaq
    Thanks for the heads up.

    EDIT: But I really think Paypal needs to do something about serial refunders and charge backers.

    I mean 30cents isn't that big of a deal at all but I recently saw a post on the board about paypal's new charge back policy and they will charge 10% to the sellers account or something.
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    • Profile picture of the author tecHead
      Originally Posted by Mohammad Afaq View Post

      Thanks for the heads up.

      EDIT: But I really think Paypal needs to do something about serial refunders and charge backers.

      I mean 30cents isn't that big of a deal at all but I recently saw a post on the board about paypal's new charge back policy and they will charge 10% to the sellers account or something.
      You're welcome, but...

      Not sure what else you propose they do; as with internal PayPal transactions, (the ones they have direct control over), they initiated the Resolution Center. The RC gives the Merchant the ability to resolve disputes between themselves and the disgruntled Customer, directly (without outside intervention unless escalated).

      CC transactions are outside of PayPal's control; as they are governed by the agreements between the banks and CC issuing companies. The bank is the one that initiates CC charge-backs, (and snatches the funds FIRST -- dictating an ultimatum to the Merchant to "prove" they are due the funds in question).
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  • Profile picture of the author Rock Solid
    We recently got our PP account funds into this "21 day holding period" because of a few serial refunders and it really throws a wrench in our spokes in regard to fiscal months and payouts for us and the company. Kind of a pain. I've been getting fed up with PP for quite some time. I understand protecting the buyer and all, but the sellers have rights too, especially merchants doing lots of business through PP.
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    • Profile picture of the author KevL
      Originally Posted by Rock Solid View Post

      We recently got our PP account funds into this "21 day holding period" because of a few serial refunders and it really throws a wrench in our spokes in regard to fiscal months and payouts for us and the company. Kind of a pain. I've been getting fed up with PP for quite some time. I understand protecting the buyer and all, but the sellers have rights too, especially merchants doing lots of business through PP.
      I can't stand paypal!!!

      I've had a few problems with them in the past, they seem to be able to do whatever the heck they want, and seem to forget that it is OUR money they are messing with.

      If the banks took the liberties that paypal take sometimes - there would be a public outcry, so how come we let Paypal get away with it??

      Cheers

      Kev
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  • Profile picture of the author Tim Franklin
    Well, I recently had a discussion with one of the folks over at Paypal and not only is this a problem for them but they are literally in the middle of a huge issue with electronic products, most of click bank a virtual product, so it was either this fee, or stop all digital products, which makes no sense because if you do that you are shooting yourself in the foot.

    Even Stephen King, proved that Digital products are in fact very much in demand by selling thousands of "virtual books" Of course we cant all be as good as Stephen King, but the model proves that digital products are here to stay if paypal decides to stop supporting digital products, someone else will step in and provide the service.

    You never know what they are thinking for sure, look at how badly Ebay is being managed it is like teetering on the edge of financial ruin mostly due to miss management. (allegedly)

    If it were not for paypal, Ebay would be in very bad shape.
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  • Profile picture of the author Michael Oksa
    Here is a thread from a few weeks ago that discusses some of these changes.

    http://www.warriorforum.com/main-int...s-doubled.html

    I'm not trying to highjack this thread, just trying to add to it (without quoting 50+ posts )

    All the best,
    Michael
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    • Profile picture of the author Steven Fullman
      Originally Posted by Michael Oksa View Post

      I'm not trying to highjack this thread, just trying to add to it (without quoting 50+ posts )

      All the best,
      Michael
      I know your game, Mr. O.



      Stimulate a conversation, drop by occasionally, and rack up the "post count" with well-reasoned arguments and good sense.

      How very dare you.

      Steve
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      • Profile picture of the author Michael Oksa
        Originally Posted by Steven Fullman View Post

        I know your game, Mr. O.



        Stimulate a conversation, drop by occasionally, and rack up the "post count" with well-reasoned arguments and good sense.

        How very dare you.

        Steve
        Dang it! Now I have "Dare" by Gorillaz stuck in my head.

        - - - - - - - - - - - - - -

        I appreciate posts about changes at PayPal, or any other sites a lot of us use. It's a good reminder that we are in business and need to be aware of what's going on.

        It's your money, do what you can to keep as much as you can - as long as it's moral, ethical and legal.

        All the best,
        Michael
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        • Profile picture of the author Steven Fullman
          Originally Posted by Michael Oksa View Post

          Dang it! Now I have "Dare" by Gorillaz stuck in my head.

          - - - - - - - - - - - - - -

          All the best,
          Michael
          Phase One: Complete...

          Phase Two: Arcade Fire......
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    • Profile picture of the author tecHead
      Originally Posted by Michael Oksa View Post

      Here is a thread from a few weeks ago that discusses some of these changes.

      http://www.warriorforum.com/main-int...s-doubled.html

      I'm not trying to highjack this thread, just trying to add to it (without quoting 50+ posts )

      All the best,
      Michael
      No worries, Michael..

      I haven't read through that post, yet but I can pretty much bet there's a lot of misinformation and misunderstanding in it.

      The $10 to $20 hike in charge-back fees is a part of the Visa/MasterCard response to the FTC coming down on them about identity theft. Trickle down effect.

      (this doesn't apply to non credit card transactions - it only applies to those who hold merchant accounts with PayPal through their Virtual Terminal and Payment Pro offering)

      Visa/MasterCard isn't investing enough money in protocols to thwart identity theft and the FTC came down on them about it. So, instead of taking some of their trillions and doing the right thing as the leader of the pack, they've decided to instead pass the buck down to the merchant account providers and banks; (who in turn are doing the same).

      ALL ecommerce related merchant account fees will be seeing hikes, if not already. This isn't PayPal's fault. They're being dictated to just like us. Their margins have been as low as they could possibly be since inception; which is why they're as big as they are with full blown merchant accounts their only competitor.

      So, they're in a position where if they don't raise their fees then they could very well be in a place where they're losing money providing the service they've been for the past 10yrs.

      http://www.forbes.com/2009/03/31/vis...rity-visa.html
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      • Profile picture of the author BizmanJoe
        Originally Posted by tecHead View Post

        No worries, Michael..

        I haven't read through that post, yet but I can pretty much bet there's a lot of misinformation and misunderstanding in it.

        The $10 to $20 hike in charge-back fees is a part of the Visa/MasterCard response to the FTC coming down on them about identity theft. Trickle down effect.

        (this doesn't apply to non credit card transactions - it only applies to those who hold merchant accounts with PayPal through their Virtual Terminal and Payment Pro offering)

        Visa/MasterCard isn't investing enough money in protocols to thwart identity theft and the FTC came down on them about it. So, instead of taking some of their trillions and doing the right thing as the leader of the pack, they've decided to instead pass the buck down to the merchant account providers and banks; (who in turn are doing the same).

        ALL ecommerce related merchant account fees will be seeing hikes, if not already. This isn't PayPal's fault. They're being dictated to just like us. Their margins have been as low as they could possibly be since inception; which is why they're as big as they are with full blown merchant accounts their only competitor.

        So, they're in a position where if they don't raise their fees then they could very well be in a place where they're losing money providing the service they've been for the past 10yrs.

        Visa, MasterCard In Security Hot Seat - Forbes.com
        That makes sense. I guess that's why they're dropping the plug-in features, which I liked so very much.
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        • Profile picture of the author tecHead
          Originally Posted by BizmanJoe View Post

          That makes sense. I guess that's why they're dropping the plug-in features, which I liked so very much.
          Not exactly sure why they dropped the plug-in; might have had something to do with security. I know I wouldn't put my PayPal password in my browser... OH HELL NAW!!

          I won't even put my PP password in Roboform; call me paranoid
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  • Profile picture of the author tecHead
    Here's another, (more recent), article showing the progression of this whole trickle down phenomena

    Originally Posted by Forbes

    In the next release of the Payment Card Industry (PCI) standards for data security, look for “a lot of clarifications,” says Bob Russo, general manager of the PCI Security Council. But don’t expect anything new. Missing from the often-cited standards are specific references to many technologies that the security industry has long been pushing card companies to adopt: EMV (Chip and PIN), End-to-End (E2E) encryption, tokenization and virtualization.

    Source Article:
    Payment Card Industry Punts On Key Security Questions - The Firewall - the world of security - Forbes
    New technologies that are being dictated to be put in place "cost"; that cost will effectively be passed down to the Merchant, (IMHO).

    PCI Compliance
    is one of the major factors dictating the cost of us doing business from today forward. Everyone should be paying very close attention.

    HTH
    PLP,
    tecHead
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  • Profile picture of the author Black Hat Cat
    Banned
    Originally Posted by tecHead View Post

    According to recent updates to PayPal's TOS; the fixed fee that is charged per transaction will become the liability of the Merchant, starting August 10th, 2010.



    This doesn't come as a surprise to me since the recent modifications to Visa/MasterCard International's TOS; (full fledged merchant accounts will be making modifications to their TOS, as well -- so nobody is immune to these changes).

    I don't personally see this as a big problem, because you can simply add the fee into your pricing structure.

    I had created an Excel spreadsheet that helped me price my products/services factoring in PayPal's transaction fees a while back. Figured I'd make it available to Warriors; however, you'll only be able to access it from inside the WAR Room.

    (WAR Room post to come later, today).

    Stay informed...
    PLP
    tecHead
    As I stated in another thread, I'm not sure why Paypal refunded this fee anyway. This is a fixed fee for processing the transaction. Just because someone requests a refund doesn't mean the transaction didn't happen. Paypal did their part....they processed the transaction. That's what they get paid to do. Why should Paypal forfeit money for upholding their end of the bargain?

    Visa/MasterCard isn't investing enough money in protocols to thwart identity theft and the FTC came down on them about it.
    Which is a joke. The federal government is the last entity anyone should turn to for advice on spending.
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    • Profile picture of the author tecHead
      Originally Posted by Black Hat Cat View Post

      As I stated in another thread, I'm not sure why Paypal refunded this fee anyway. This is a fixed fee for processing the transaction. Just because someone requests a refund doesn't mean the transaction didn't happen. Paypal did their part....they processed the transaction. That's what they get paid to do. Why should Paypal forfeit money for upholding their end of the bargain?
      If I'm not mistaken; I think it has something to do with Visa/MasterCard Int'l rules and regulations that state something to the extent of...

      "..said card can only be credited back the amount in which it was originally charged.."

      I remember that rule VERY well; as it cost me about $80K; brrrrr... I still shiver.. V/MC just snatched it; right outta my bank account... BIG lesson learned... anyway, I digress...

      Originally Posted by Black Hat Cat View Post

      Which is a joke. The federal government is the last entity anyone should turn to for advice on spending.
      LMAO... that was funny
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  • Profile picture of the author seobro
    Well, thanks for the heads up. It seems every day I like paypal a bit less, and amazon more.
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    • Profile picture of the author tecHead
      Originally Posted by seobro View Post

      Well, thanks for the heads up. It seems every day I like paypal a bit less, and amazon more.
      <shrug> you're welcome but, Amazon's not immune either... perhaps, due to the diversification they have built-in, they may have enough wiggle room to spread the cost out so that its not so apparent... we'll see
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  • Profile picture of the author tjonesga
    A customer of mine requested that I take paypal as payment(this is four years ago) saying that she was afraid of scammers and that if somthing went wrong she could get her money back. Needing the sale i went and set up a paypal account. long story short, she made a compliant about not recieving goods as described(custom made rhinestone designs made to her specs). Paypal ruled in her favor, she refused to return the goods and issued a charge back on her bank. Paypal now four years later wants me to pay them for the money that she charged back. We have no defense.
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  • Profile picture of the author bcmcg2002
    Today, I woke up to an email from Paypal saying they were freezing my account because of an unresolved negative balance on an account from someone with my name. Now this mystery account wasn't mine but they say that they proved to themselves that it was mine. They won't share the information with me as to why they think it is my account because "I might share it with other people".
    SO, Paypal has the right to freeze a $300.00 account because of a negative $25.00 mystery account and here is how it works: I can't get my $300 until I pay this $25 and if I don't agree to pay it then they will just take it in 14 days. I can file a fraud charge saying that it isn't mine but then they will research it and in 15 days get back to me, well they are taking the money in 14 so either way they are taking my money. I just paid them the $25 so I could get the rest of my money but that will take 5-7 days as well so they have really figured out another way to fleece the American public out of their hard earned money. My warning to everyone now is STOP USING PAYPAL.
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  • Profile picture of the author nakmuay7
    Personal experience has taught me to stay clear of paypal.

    they will illegally refund money from your bank account for "alledged" breaches to TOS they dont look at evidence, they dont do whats fair they only do the thing that makes them the most no matter what the moral stand point may be.

    Please be aware they do not operate under the same legal responsibilities as a bank and banks are bad enough for lieing and stealing money.

    Sorry to sound like im ranting but this must be known to all paypal users.
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    • Profile picture of the author tecHead
      Originally Posted by tjonesga View Post

      A customer of mine requested that I take paypal as payment(this is four years ago) saying that she was afraid of scammers and that if somthing went wrong she could get her money back. Needing the sale i went and set up a paypal account. long story short, she made a compliant about not recieving goods as described(custom made rhinestone designs made to her specs). Paypal ruled in her favor, she refused to return the goods and issued a charge back on her bank. Paypal now four years later wants me to pay them for the money that she charged back. We have no defense.
      Your defense is to get on the phone and handle your business.

      Originally Posted by bcmcg2002 View Post

      Today, I woke up to an email from Paypal saying they were freezing my account because of an unresolved negative balance on an account from someone with my name. Now this mystery account wasn't mine but they say that they proved to themselves that it was mine. They won't share the information with me as to why they think it is my account because "I might share it with other people".
      SO, Paypal has the right to freeze a $300.00 account because of a negative $25.00 mystery account and here is how it works: I can't get my $300 until I pay this $25 and if I don't agree to pay it then they will just take it in 14 days. I can file a fraud charge saying that it isn't mine but then they will research it and in 15 days get back to me, well they are taking the money in 14 so either way they are taking my money. I just paid them the $25 so I could get the rest of my money but that will take 5-7 days as well so they have really figured out another way to fleece the American public out of their hard earned money. My warning to everyone now is STOP USING PAYPAL.
      Cry wolf a little louder; I don't think the other 200mil users that are doing just fine with them heard you.

      Originally Posted by nakmuay7 View Post

      Personal experience has taught me to stay clear of paypal.

      they will illegally refund money from your bank account for "alledged" breaches to TOS they dont look at evidence, they dont do whats fair they only do the thing that makes them the most no matter what the moral stand point may be.

      Please be aware they do not operate under the same legal responsibilities as a bank and banks are bad enough for lieing and stealing money.

      Sorry to sound like im ranting but this must be known to all paypal users.
      If you feel they're conducting illegal activity then prove it to your lawyer and sue. You'll make a bigger impact then spreading misinformation on a forum.

      This is crazy. Every time I post something factual about PayPal, here come all the PayPal Haters posting about how much PayPal has screwed them around.. how illegal PayPal is...

      Hopefully, those with at least minimal sense can sift through the noise and see that IF a business was conducting that much ILLEGAL activity it would be virtually impossible for them to have 200mil+ users and growing.
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  • Profile picture of the author clorets01
    Well they go to find new ways to make money, this isn't surprising
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