PayPal won't return its fees when refunding anymore

Monday, February 10, 2020

Last week-end, PayPal sent an e-mail announcing it's making some changes in its policies and that I don't have to do anything, everything will be done automatically! It also invites me to go take a look at the details if I'm interested...

With our experience, we know that these kinds of e-mails, especially when they're sent on a Saturday morning, never give some good news. By visiting their link for more information, hidden with a couple of other minor changes, you can find the following statement:  

We are establishing that if merchants refund (partially or fully) a transaction to a buyer or a donation to a donor, there are no fees to make the refund, but the fees originally paid by the merchant will not be returned.  This change will become effective on May 19, 2020.

Basically, it will now cost merchants some money to test their system online and to refund their customers. This deicision will be particularly harsh for those who sell high value items since at 2.9% (or up to 3.9% if you sell outside of Canada) per transaction + $0.30, for a $1000 transaction, we're talking about up to $39.30 that the merchant loses. 

Of course, don't think that merchants will just accept this loss without any consequences on consumers, so be surprised if you see an increase in everything you purchase online.