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AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Mon Aug 23 2010 21:38:00

New PayPal Refund and Chargeback Fees Take Effect

By: Ina Steiner
Sponsored Link
As we reported back in June, PayPal announced new fees for refunds and chargebacks that have now gone into effect this month - according to the June announcement:
  • Refund Prices: Starting August 10, PayPal will retain the transaction fee (typically $.30) when a seller issues a refund (U.S. and Canada merchants).
  • Chargeback Prices: Starting August 24, we'll be increasing chargeback costs from $10 to the typical industry rate of $20 (U.S. merchants only, eBay merchants enrolled in the PayPal Preferred program are exempt).
Some sellers are just becoming aware of the new fees thanks to an email PayPal sent out to users this week with the subject line, "Notice of Policy Updates."

Sellers who learned of the new refund policy in June were not happy with the news that PayPal would not credit the full fees when they had to issue refunds, even when the refund was made in order to allow the buyer to correct his or her mailing address. (Sellers are only protected if they ship to the PayPal address, and once a payment is completed, an address correction made in PayPal does not carry through to an existing payment transaction, as one seller explained in the PayPal blog post announcing the new policy.)




Comments (19) | Permalink
Readers Comments

New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: Patricia This user has validated their user name.
       
Mon Aug 23 21:43:09 2010
If you have any gold fillings - DON'T SMILE around these thieves.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: Troglodyte
       
Mon Aug 23 21:50:33 2010
Suggested new refund policy for sellers:

Charge a $.50 or $1.00 service/administrative charge on all refunds.

As long as it's called a service or administrative charge, it's not against PayPal policy.

Be sure to explain why to customers -- time and labor involved, more buyer friendly than charging a 10% to 20% restocking fee, time and gas to the Post Office, etc.

Don't forget that that the big banks bought and paid for anti consumer federal laws regarding refunds, minimum charges, etc.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: buck efay
       
Mon Aug 23 22:38:50 2010
Just Ebay making more money from buyer fraud. What other company would charge you after some dirtbag buyer (who has NO verifiable information on file) steals from you? Only Ebay. Accelerate the demise there, geniuses!
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
This user has validated their user name. by: silent anarchy
       
Tue Aug 24 00:03:40 2010
There is no way ebay can survive this, $10-$20 fees for thier forced chargebacks?. Vegas has better odds then ebay. If this does not cause a complete exodus of small ebay sellers then nothing will.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: scheme team
       
Tue Aug 24 03:42:42 2010
It will make that paypal 'protection plan' racket look like not such a bad deal once enough people get hit. Imagine the possibilities.


"...we continually strive to exceed our customers’ expectations to provide a safe, secure method to send and receive money online......
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: Marvin
       
Tue Aug 24 04:38:40 2010
Paypal claims they haven't had a broad-based price increases since 2004. Let me tell you why.

1. Only congress can make laws but they all get payola from ebay which owns paypal so what are the chances of any meaningful legislation to protect consumers being passed? They take thousands of dollars from ebay then turn a blind eye to what ebay and paypal does.

A complete list showing how much they took is available on youtube called ebay buys congress: (http://www.youtube.com/watch?v=bU2mMCMyASk)

2. Many states regulate paypal and many also use paypal, an unethical if not illegal conflict of interest which benefits paypal. If you control the purse strings of the agency that regulates you what do you have to fear from those agencies?

3. Why increase prices when you can just cheat users out of their money or steal it?. Why increase prices when you let users commit outright fraud and do nothing about it because you profit from it?

4. Howard Schmidt out of frustration left his post at the White House as Adviser for Cyberspace Security in 2003 and went to work for ebay as their chief information security officer. John Donahoes wife helped raise extensive funds for the Obama presidential campaign. In December 2009 after his stint at ebay Howard Schmidt was now more than willing to go back to the Whitehouse and take a job nobody else wanted and was appointed by President Obama as cybersecurity czar to ensure that agencies have money allocated for cybersecurity priorities, and coordinating the government’s response to a major cyber incident or attack.

ebay has their hand in or exerts influence in every aspect of  the government from the state level through the executive and legislative branches of the government.

ebay owns paypal and because of ebays influence paypal has not needed to raise rates because they could just take users money anytime they wanted without worrying to much about the consequences.

Given ebays policies being put in place for the 2010 holiday season and paypals rate increase does this signal ebay is running scared and making a last ditch effort at a massive money grab? Could ebay/paypal be concerned the upcoming elections might put politicians in office not sympathetic to their cause or that current politicians are wising up and discovering they were used by ebay?
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: Writing On The Wall
       
Tue Aug 24 05:38:10 2010
OK! To the few still dragging their feet: you slow-poke sellers still barely hanging on Feebay. NOW do you get it? eBay/Paypal is the enemy. Why are you still sleeping with them? Time to move out.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: fat freddy
       
Tue Aug 24 09:55:53 2010
Cost of doing business. Just increased prices another 30 cents.

Got more important things to take care of.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: RicRoe
       
Tue Aug 24 10:18:59 2010
PayPal has now empowered themselves to take profits from sellers and under this policy monetize buyer errors.

Buyer enters their zip code incorrectly? PayPal policy requires the seller to issue a refund in order to receive a new payment after the address has been corrected. PayPal keeps the sellers $.30 for what is a buyers error.

Buyer moved but forgot to change their address in PayPal before making a purchase? Again, it is PayPal's system and policies which forces the seller to issue a full refund in order to receive a new payment with the corrected address, and again, PayPal keeps $.30 of the sellers money for a mistake made by the buyer.

How about when USPS consolidates zip codes due top downsizing and PayPal fails to update their data bases? Per PayPal policy,the seller is required to refund the transaction as well as inform the buyer their zip code must be updated, and PayPal will profit again this time by their own failure to update their own records.

PayPal has been a very profitable business without entitling themselves to financially penalizing sellers for mistakes made by buyers and even their own systems.

PayPal is aware of these issues, and was advised in writing when the policy was announced. As usual, no consideration has been given to the policy conflict of forcing sellers to refund for incorrect addresses, and then charging them the fixed fee to comply with policy.

It's a perfect catch-22 which eBay management has decided they will monetize simply because they can.



Charging sellers under this policy for the mistakes of other or for their own internal errors is pure and simple greed. PayPal management keeps looking for new ways to monetize a microsecond of computer time even when the methods are as despicable and draconian as this.

PayPal knows that sellers will have to call eBay to have these unearned fees credited. They are counting on the fact that the extremely long wait times to speak with a customer service agent will compel sellers to realize the system has been stacked against them and quit the call in utter frustration.

PayPal even wants sellers to add this new cost to their selling prices, which in turn will help eBay's sagging profit picture.

That sellers are forced to accept PayPal is one thing....that PayPal can entitle themselves to wrongfully charge sellers a fee for mistakes made by buyers or even themselves is a greedy, shameful act.

Ethics at this company have reached yet another high in lows.


New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: buck efay
       
Tue Aug 24 12:08:12 2010
Suggested new policy for sellers? Stop dealing with criminals, both Ebay & the crooks they allow to rob you & then charge you for the privilege.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: Troglodyte
       
Tue Aug 24 15:15:25 2010
@ buck efay

Normally I agree with nearly everything you post.

But I'm going to take serious issue whne you insist that everyone stop doing business with ebay.

Do you think I want to do business with them?

The fact is that some of us niche sellers only have two choices.

1. Sell on ebay.

2. Don't sell on ebay and stop selling online.

Even good redasonably good website sales aren't enough. Other venues are unproductive for my product line.

I have no interest in selling anything else. I was doing extremely well until Donahoe took over.

No more lectures, please.



New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
This user has validated their user name. by: DonC
       Web Site
Tue Aug 24 22:01:21 2010
In seven years I've never had a charge back.

I have a very liberal return policy so I process occasional refunds.

From my perspective this raises my costs about 60 cents a month.

The vast majority of my refunds come from two products. When I review my pricing for forth quarter these items will probably go up a few cents.

If I start getting charge-backs I'll have to figure that into the pricing.

No drama here.

DonC
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: buck efay
       
Tue Aug 24 22:16:31 2010
Troglodyte, No lectures from me above, so?? I can't see the reward of dealing with a kafkaesque system bent on my destruction. Anyone can continue to do business on the bay if they wish or NEED to, hell, I still take advantage of the 100 freebies a month. I sell the exact type of goods Ebay was made for, collectibles, rare and one of a kind & it's been a very tough slog for us to break loose. But after cutting the strings to ebay after selling there since 1998 with well over 20K FB, I find I actually have more money in my bank acct right now then this time last year, when I still depended on Ebay. Both because of sales & because my bills are cut in 1/2. I dont NEED to sell as much, in other words, since my selling fees are now almost non existent. Sure, it was fun getting all those free plane trips from my huge Ebay bills, but this year I actually ENJOYED my summer for the first time in years. Trog, I wish you all the best & hope you can find a good fit. Luckily, my bills for living are very low & like the humble cockroach, I will survive until things change. I wish things were different too, I had NO intention of changing my auction business model & loved the risk & reward involved in that type of selling.
But until the great idiotvator is gone, I can't risk my hard to replace merch on capricious policies. If you have had a successful line on Ebay, that means the customers are there for it, you just need to find where they are. I continually try new markets & ways to get our goods in front of the public's eyes. I wish you the best my friend & I enjoy your posts too.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: buck efay
       
Tue Aug 24 22:29:10 2010
PS here's a list of other online entry points for your goods someone posted in letters, I havent heard of every one, but copied it & will be investigating soon. By the way, my only replaceable product line I sold on Ebay, which is my top seller everywhere else now, became a non selling item & buried in search simply because an out of the coutry seller is gaming Ebay's search by offering FREE shipping, only to his home country, $8 to USA & Ebay says that's fine by them. Sales went from over $1K a month down to 0 on Ebay. This is my best selling line EVERYWHERE ELSE. It could happen to you, or anyone next. That's why you MUST at least TRY & diversify. Good luck to you all.

121, Bid, Ebid, One Way
Adflyers,E-Buy Auction,Orbay
All bidders, Ecrater Overstock ,Altec Trader Efleaa ,Oztion
Amazon ,Epier, Ozebid
Auction Ad City,Fia Ola,Ozon
Auction Addict, 570 Auctions Profit Sharing Auction
Auction Bidz, 4 Sale 4 Now Plunderhere
Auction Fire,Frazoo Local, QX Bid
Auction Quest, Gumtree, QXL,
Auction Warehouse,
Google Base, Ruby Lane
Auctiva ,Happy Sheep,
Sell Bid And Buy,
Audiogon ,Hi Bidder,
Sell My Stuff ,
Aukro ,High Street Sale ,
Sell UK
Bang 4 Bucks Hoobly Shoporium
Bidgogo Hood.de Specialist Auctions
Bidmate Inter Shop Zone Tazbar
Bidtopia Ioffer Trademe
Bid2trade.com.au Job Lot TripleClicks
Blujay Kijiji Trocadero
Bonanzle LGG Auctions Ubid Right
Buy Sell Trades Liquibiz UK Bids Away
Cashback Auctions Liquidation Webidz
ClickIndia Classifieds MADBID Wagglepop
Cqout Mercando De Ventas We buy
CraigsList Mercado Libre Wensy
Dawdle MGV Liquidations Xoobie
Deal Tent Milbid Yahoo Shopping
De Remate Neo Loch Yahzoo Shopping
De Reto Njuskalo Zillion
Dove Auction Site OfficeHax Zozo
Easy Mud Oltiby
You can also check out Chinavision and they will have all of these under:
Ebay alternatives
Happy selling
Bob C
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: colorful one
       Web Site
Wed Aug 25 04:29:10 2010
I wish there would be a nice alternative service to paypal.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: rachel
       
Wed Aug 25 11:01:35 2010
If ebay owns the White House that means we don't have to worry about 1099s ( I am  sure Paypal is thrilled to issue 1099s ) in 2011 for all sales and we won't have to worry about collecting sales tax for all states and about being hit for taxes for ebay sellers...unless ebay may be getting commission from the government?

New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: buck efay
       
Wed Aug 25 12:30:11 2010
Rachel, how do you think they are avoiding oversight? By throwing we the sellers under the bus & stooging to the government. The only reason they are against the sales tax is because THEY will have to deal with it as the merchant of record. And we all know Ebay can't do anything right. Probably why they are FINALLY readying a shopping cart, albeit glitch filled one, because they will have to have a process to capture the sales tax.
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: o.c.d.collectibles This user has validated their user name.
       Web Site
Sat Aug 28 14:49:05 2010
It's funny that paypal only practices this vicarious game amongst it's Ebay sellers, but it wouldn't DARE try it on any other sites where it offered it's services to NON-EBAY sellers! They would be out of business TUTE SUITE!
New PayPal Refund and Chargeback Fees Take Effect   New PayPal Refund and Chargeback Fees Take Effect
by: Alex
       
Fri Oct 22 13:07:14 2010
Money is never clean and clear - it is always dirt and lies. Nowhere in the world you can find anything or anyone completely honest involved in money. It is either no money and honesty or money with lies and greed. Everyone has this choice.

Whether it is called Ebay, Paypal, banks or a government - they are all the same, cheat and steal, using all sorts of cover-ups and excuses.


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