Why is my refund less than what I paid?

[negan]

This is more a PayPal question, but as they don't have an AU forum, I'll post my issue here.

I paid $3184.83 AUD for an item on 28th May, converted to 1770.00 GBP.

Had an issue, opened a dispute case. Just won it.

I have now been issued a refund, but it was the 1770.00 GBP converted back to AUD which today equals $2826.95.

The user agreement policy states:

14.6 When you send a payment in which you perform a currency conversion using PayPal (i.e. converting the currency in which you fund your payment into the currency to be received by the recipient) and later there is a refund, return or Reversal, we will generally reverse the currency conversion and complete the refund, return or Reversal in your funding currency using the exchange rate which prevailed on the date of the original transaction.

This does not seem to have been the case in my situation. Now I have lost over $357.88 due to change in exchange rates.

I do not see how this is fair on me when I had to pay $3184.83 and not have received my item.

Anyway I sent PayPal a message about this with the above user agreement statement, this was their response;

Since exchange rates fluctuate, you may find that the original currency is worth less or more than it was on the date of the original purchase. In some instances, you may make money on the conversion exchange, and in some instances there may be a loss if you were to convert the currency. PayPal will not reimburse you for a loss in currency exchange, and we also will not take back any money that you potentially could have made on the currency conversion. We will only refund the exact dollar amount in the original currency that was used on the payment.

Anyone have any more ideas or am I just fighting a losing battle?

[twyngwyn]

I understand your dilemma, but cannot help....someone with the nous, hopefully will be around shortly....bumping

[kopenhagen5]

Call PayPal and inform them you will take it to the FOS if they don't honour their own terms.

PayPal are usually very good with setting things right but sometimes need a reminder.

[lyndal1838]

The currency conversion rate only lasts for 30 or 60 days (not sure which)....it is over 60 days now so the refund is done at the prevailing rate not what it was when you paid.

[negan]

Do you know where I can find that information in writing?

[lyndal1838]

Try the paypal agreement that you agreed to when you joined paypal.

You will need to read the agreement for the site that you joined as there are a few variations that are site specific.

[negan]

I believe that was the user agreement in which I quoted in OP.

I checked the whole agreement, couldn't see anything about 30-60 days to hold exchange rate.

[lyndal1838]

I have used paypal since long before it was known as paypal and long before it had anything to do with ebay....I know it was there when I first joined up but it could well have changed.   I have only once been caught up in an exchange rate variation and it was US$ to AU$ and worked out very much in my favour.

If you cannot find it then all you can do is go to the FOS as mentioned by someone else.

[porcelain_dolls_by_me]

I would suggest the difference comprises of two elements - movements in the AUD/GBP exchange rate and the buy/sell spread applied to the transactions by PayPal.  The latter being 8%.

To explain, when you make a GBP purchase PayPal convert the payment to AUD at the interbank AUD/GBP.  The they add their margin (commission) of 4%, and charge your account accordingly. 

When you then cancel that transaction, again PayPal convert the GBP at the interbank AUD/GBP.  This time they will reduce the payment to by  their margin (commission) of 4%, and credit your account accordingly. 

The currency conversion fees charged by PayPal may seem excessive but are about the same as applied by the Big 4 banks.

When we make foreign currency purchases with paypment through PayPal we specify for PayPal to use our 28 Degree credit card and not to convert the payment to AUD.  28 Degree do not charge international trnsaction fees and in the case at hand the original purchase would have been reversed at minimal cost.

[digital*ghost]

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@negan wrote:

Do you know where I can find that information in writing?

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The key word in the user agreement section you've quoted is (unfortunately) "usually".

The policy lyndal is referring to still exists, and is found in the Combined Financial Services Guide and Product Disclosure Statement. I'm copying paragraph 16.9 here, and bolding the relevant section:

"When you send a payment in which you perform a currency conversion using PayPal (i.e. converting the currency you fund your payment into the currency to be received by the recipient) and later there is a refund, return or Reversal, we will reverse the currency conversion. The refund, return or Reversal will be completed in your funding currency using the exchange rate that prevailed on the date of the original transaction.

In some instances the refund, return or Reversal may be calculated using a different exchange rate. For example, a refund, return or Reversal occurring more than 60 days after the date of the original payment is generally converted at the prevailing exchange rate on the date of the refund, return or Reversal.

Currency conversions performed by your Card provider (and not by PayPal) will generally be returned in the original payment currency received by the recipient.

Some refunds, returns or Reversals may temporarily be made in a currency other than the currency in which you funded your payment."