![]() PayPal have been in touch to say “To clarify, PayPal retains no fees on fraud reversals.”. The alternative will be to wait for a chargeback in which case you’ll be paying PayPal chargeback fees which are likely higher. The change to PayPal keeping fees from refunds means that every time a fraudulent transaction is reversed (or refunded by the seller), PayPal will keep the fees. ![]() It’s nigh on impossible for a merchant using PayPal to spot a fraudulent transaction before it happens as PayPal take on the task of fraud prevention. We can but trust PayPal to spot fraud and block transactions, put them on hold and cancel them. There is another instance which is concerning and that is fees for fraudulent transactions. The only way to claw back the PayPal fees will be to raise prices for everyone. Businesses, such as clothing, where return rates are high will also be significantly impacted on fees from refunds. There are other issues to consider – businesses will very high value transactions will incur high PayPal fees and this means retaining the fees from refunds will be high. But for merchants it’s punitive and smacks of greed and unfairness, reversing a transaction should put everyone back to the position they were in before it took place and that’s fine for consumers but businesses don’t get treated the same. ![]() ![]() In some ways this is fair from PayPal’s perspective – there are costs in processing payments and why should they be out of pocket when they’ve done the job asked of them. Now, PayPal have decided that if you have to refund a buyer in a ‘Commercial transaction’, they will keep all of the fees you originally paid. At one time, PayPal refunded all of their fees and then in 2011 they decided to keep the 20p fixed charge if a refund took place. Yesterday’s news that PayPal will start to keep all fees from refunds in the UK from the 5th of March came as a bit of a shock to us all. ![]()
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