April 9th, 2019 – PayPal has just introduced a revision to its refund policy that is not sitting well with sellers on the platform. The new amendments will come in force on May 7th, 2019. According to the changes, the payment platform will no longer return sellers fees when buyer’s ask for a refund. The decision has made waves among the PayPal seller community. Many are arguing that this new policy places an unnecessary burden on sellers, particularly small vendors.
PayPal has been the payment platform of choice since the early days of eBay. The policy before the most recent amendment had a simple layout when it came to seller fees. When someone sells on PayPal, the platform charges them a percentage-based sales commission plus a flat transaction fee. Before the amendment, in case of a refund, PayPal returned all seller fees except the transaction fee. This model appealed to a fairly large user-base. With the latest changes, PayPal has announced it will not return any seller fees at all in case of a refund. This has caused an uproar among the sellers of goods and services on the platform.
From the buyer’s perspective, nothing much changes. Buyers will still be able to buy goods and claim refunds as they normally do on the platform. The affected parties are those who sell goods and services on PayPal. Sellers complain that the new changes mean they will not only be losing customers but money as well.
The current fee structure is fairly straightforward. PayPal charges a flat $0.30 fee on each transaction. This transaction fee was never subject to refund, and that much hasn’t changed. PayPal also charges a commission of 2.9% on each sale made. Under the new policy, PayPal will no longer return this fee to sellers in case of a refund. The refund could be partial or full. This will have no effect on the new policy.
Many small vendors and mid-sized sellers on PayPal have expressed their displeasure at the new refund policy. They point out the apparent unfairness to sellers in case of a refund. A buyer could purchase a TeamViewer Business license for a $100 dollars and then change their mind. When the refund is made, the seller not only loses the customer but also $2.9 out of their own pocket.
This new refund policy isn’t the only thing PayPal is changing. International currency handling and transactions are other areas affected. Originally, the platform charged a flat fee for money transfers to countries abroad. Instead, a new variable fee of 5% of the amount will come in effect on May 7th, 2019. The transfers will have a minimum and maximum cost of $0.99 and $4.99 respectively.
While sellers are furious at the new refund policy changes, PayPal seems unfazed. The payment platform says any sellers who disagree with the new policy have the complete freedom to close their account. Stay tuned for more updates as they emerge.
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