PayPal Refund Policy Change - Retaining Commercial Transaction Fees

Posted 4th Mar 2020Edited by:"SavvyShopper"
From 5th March 2020, PayPal will no longer return the transaction fees to the seller when a refund is issued.

Updates to the User Agreement

Effective Date: March 5, 2020

2. Fees – Commercial Transaction Refunds

Section A3.4 (Commercial Transaction Refunds) of Schedule 1 (Table of Fees) is amended to clarify that, if you carry out a refund of a Commercial Transaction payment, all of the fees originally paid by you to receive the payment will not be returned to you. Section A3.4 (Commercial Transaction Refunds) of Schedule 1 (Table of Fees) (presented in context with the column headings) now reads as follows (with amendments shown underlined):

This change does not take effect for users registered with PayPal as residents of Ireland until further immediate notice of the change, to be published by PayPal on the Policy Updates page (accessible via the Legal footer on most PayPal site pages) on or after March 5, 2020(as PayPal may determine in its sole discretion).
Community Updates
Thanks for posting @happyshopper2

Paypal currently charges sellers 2.9% fee + fixed fee (30p). Previously the 2.9% fee was returned in the case of a refund (and the fixed fee retained) however from the 5th March there will be no refund of Paypal fees, similar to what they have adopted in the US in May 2019. This does not apply to users registered with PayPal as residents of Ireland. They have an updated FAQ already on the Paypal site.

If you are selling items with a high returns rate e.g. clothing then the impact of this change maybe significant, and may actually result in higher prices being charged to factor in the fee policy change.

Link to new agreement
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