Sellers Push Back Against PayPal’s New Refund Policy

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Sellers aren’t happy with some of the changes that PayPal has made to its user agreement.

Currently, when someone sells goods or services, they are charged a flat transaction fee, as well as a percentage-based commission on the sale. If a customer asks for a refund, all except the small transaction fee is returned. But starting on May 7th, the company will no longer refund seller’s fees when a buyer asks for their money back.

That means sellers will pay 2.9 percent commission on the sale, which will no longer be returned if they give a full or partial refund. The proposed changes have no impact on buyers.

In addition, PayPal announced that it is removing the flat rate pricing for sending money to friends and family members in countries outside of the United States. It is now introducing a new variable fee of 5 percent based on the amount a user sends, with a minimum of $0.99 and a maximum of $4.99 per transaction. The company is also removing any variation depending on the recipient’s country.

“If you don’t agree with these changes, you may close your account. If you close your account before May 7, 2019, the changes will not apply to you,” the company wrote in the policy update.

Last month PayPal announced that it is offering Instant Transfer to Bank for qualified individual and business customers in the United States, and is planning for an international expansion “in the near future.”

COO Bill Ready said in a blog post that the Instant Transfer functionality comes on the heels of the company’s expanded partnership with JPMorgan Chase, which enables PayPal to access the real-time payments network linked to The Clearing House.

In an interview with Karen Webster conducted in tandem with the launch, Ready explained that the news comes after PayPal’s success with its Instant Transfer to debit card, which debuted last year and where balances in PayPal accounts can be transferred to debit cards instantly.

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