Friday, June 11, 2010

FYI: Paypal Raising Fees for Chargebacks and Refunds

PayPal Raises Merchant Fees for Refunds and Chargebacks
By: Ina Steiner
Fri June 11 2010 11:02:15
Online merchants will pay more in fees to PayPal beginning in August thanks to changes the company is announcing today. Beginning August 10, when a U.S. or Canadian seller issues a refund, PayPal will retain the 30-cent transaction fee it charges, a move sure to be highly controversial.

PayPal charges merchants a 30-cent transaction fee plus a percentage of the amount of the transaction, typically 2.9%. PayPal had always credited merchants for 100 percent of the fees for transactions in which the merchant refunded the buyer, meaning that the new policy is, in effect, a price hike.

The change will have a major impact on eBay sellers since the marketplace is increasingly pressuring sellers to accept refunds due to its Buyer Protection policy. Since sellers often complain of being victimized by abusive buyers who advantage of eBay's protection policy, something CEO John Donahoe has talked a lot about lately, many eBay sellers are likely to feel this new policy change by Paypal is adding insult to injury.

PayPal is also hiking the fees charged to merchants by chargebacks. Beginning August 24, eBay will double chargeback fees from $10 to $20 (U.S. merchants only, eBay merchants enrolled in the PayPal Preferred program are exempt).

And on July 13, PayPal and American Express will enter into a new card processing arrangement that requires merchants to establish a direct contractual relationship with American Express - this only applies to taking American Express credit cards directly.

A PayPal spokesperson told AuctionBytes, "It has been more than a decade since PayPal has made a broad increase. Our focus remains to offer competitive services within a simple fee structure - no hidden fees - (gateway fees, monthly statement fees, web access fees, address verification fees, downgrade fees, etc)."

Link to original article on Auction Bytes:


waterwaif said...

I know so many of you are Etsy sellers and, like I do, offer sales, discounts, and refunds through Paypal. This will now cost us every time.

Gigi's Consignment Closet said...

And this is why I charge a 15% restocking fee. *sigh* I hate PP.

Luster Canyon said...

Yikes! That could add up. Maybe have to send the refund in the package you send to the customer??

waterwaif said...

Yes, or pressure Etsy to start offering a coupon code.

I'm more worried about the times we are forced to refund, though.

And did you see the part about sellers being charged $20 for chargebacks?

daniii♥ said...

That really really sucks.

(visiting from nff)