Changes to paypal user agreement

[brerrabbit585]

I got an email this morning saying that they won't be returning fees on refunded amounts.  My friend got it to so I assume it's genuine, but it's not in the section on upcoming policy updates.  What is in that section is that currency conversion fees went up to 4% on 4th September.

I don't understand it because this is the same change they announced months ago and then backtracked on.  This is what the email said (or part of it):

Earlier this year, we notified you that we were updating our User Agreement to change our refund policy. We want to let you know that the policy change is going into effect beginning on 11 October 2019.

In line with industry practice, and according to our updated policy, we will not charge a fee to process refunds, but the fees from the original transaction will not be returned. This policy will not apply to duplicate transactions, voids and most disputed transactions. 

[go-tazz]

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@twyngwyn wrote:
https://www.ecommercebytes.com/C/blog/blog.pl?/pl/2019/9/1568851580.html

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We only adjust our policies when we are confident the changes are fair and aligned with the value that our services provide to your business.

PayPal brings you more than just payment processing – your business has access to our platform's full suite of tools, products and support built to scale with you, such as customized invoicing to help you get paid sooner, access to business loans, world class fraud monitoring, seller protection for eligible transactions, and business services designed to simplify your day-to-day operations.

PayPal invests in bringing you buyers – with over 268 million active account holders worldwide, PayPal works hard for your business to make sure we continue to bring your buyers the shopping experiences they have grown to associate with our brand. PayPal is the most-used digital wallet** and PayPal shoppers complete their checkout 88% of the time on average, helping you close more sales.+

None of that means anything to me (the only reason I use Paypal as a seller is because I'm forced to).

The only reason I use it as a buyer is because once I sell stuff I can buy stuff here and elsewhere where

sellers use PP so it's easy to use those available funds from selling.

To me it's a bit like a motel charging for everything in the mini bar (because they supply and it's there and even

if you don't use it you will still get charged).

[digital*ghost]

Their seller protection is the biggest drawing card for me (not that it isn't without issues, of course, but what they do offer on eligible transactions is much better than any other payment processor for card-not-present transactions), that and Australian buyers still seem to prefer it by and large, so I'll continue to have it available on my website unless / until it falls into irrelevance. The main issue I have with this is that the percentage-based fee isn't really there to cover the costs of the actual processing (ergo eliminating the argument that they've still processed the payment regardless of whether it's refunded, and I can't really figure a $20 payment costing PP less than a $200 payment, particularly given any currency conversion fees are paid on top of that). Larger sums of money of course represent higher risks if disputed (risk for PayPal that is, if it is a CC chargeback that's eligible for protection), so if the payment is refunded, that risk is gone, but with this you're still paying for the "insurance" (I'm sure only some of it is for that, but I agree - honestly the "we're going to keep the money because....uhh....we deserve it for all this other stuff we do" seems a bit lame ). 

On the whole, I do think they currently add value for businesses, though, as their overall reputation is still pretty positive and there are consumers who will be more inclined to trust shopping at a webstore if they offer PayPal (the buyer protection available has been hammered home well, and PayPal is typically offered vountarily outside of eBay). Then there's the refunded returns scheme, which while not massively prevalent, is still something a website can advertise and use to help mitigate some issues surrounding returns. 

[cimitech-pty-ltd]

We stopped offering paypal on our website earlier this year when these changes were announced and it hasn't affected sales at all.

Being able to easily refund customers at no cost to us is highly desirable as we want to provide the best experience to our customers.

As soon as eBay open up their own payment solution we'll stop paypal all together. They claim these changes are in line with the market but I can't think of anyone else who does this?

I think this is really going to hurt paypal personally, I know some other merchants who are pulling PayPal just like we are.

[digital*ghost]

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@cimitech-pty-ltd wrote:

They claim these changes are in line with the market but I can't think of anyone else who does this?

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"It's industry standard" is often corporate speak for "we wanna copy this one guy over here and make you accept it as common practice".

It's not industray standard, but Afterpay does it, and their fees are higher (up to approximately 6%, according to the info I could find). 

[purplemon18]

I was always under the impression that bricks and mortar stores with regular eftpos never got fees refunded. I assume that this is what they are talking about.

Can we stop calling it B&M? I feel like the uncool parent embarrassing the teenage kids whenever I say it. Can't we just call them offline stores or something?

[brerrabbit585]

I think you might be stuck with the term b&m, unless you want to call them 'physical' stores as opposed to online.  I think you'd be hard pressed to actually find a brick in a lot of so-called b&m's.

I think paypal have got too big for their boots, just as ebay did.  Ebay got so big that a lot of existing businesses felt they'd miss out if they didn't use ebay.  They managed to get a lot of big box retailers on board, as well as smaller retailers that once would never have considered selling on ebay, but eventually a lot of the smaller sellers got tired of the fees and set up their own websites so ebay started losing a lot of business (and steady business at that). 

In the same way, for a while paypal were riding high because they found their way into a lot of places they'd never been used before, but now there are more and more new payment methods springing up and if they're not careful they may find themselves uncompetitive.  That won't happen overnight but they can't ignore the possibility. 

I would have thought the way to keep their customers is to lower fees to stay more competitive, not increase them.  When someone raises their fees it's usually a sign of one of two things - either they have no competition and can charge what they like, or they're losing business and the only way to maintain their revenue is to increase fees.  There's a third possibility but that doesn't apply here (increased costs).

As has been said, it's not like it costs them much to process a refund and they always get to keep the 30c.  The person who gets the refund will most likely spend that money again so paypal get their fees on it a second time.  If it's costing businesses money to offer returns they're going to be looking into other payment methods.  Yes, some would have loans with paypal but I'm sure it won't be long before others start offering those services too.