Paypal Will No Longer Refund Processing Fees When You Refund A Transaction

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Paypal has announced that effective 5/7, they will no longer refund processing fees when you refund a transaction.

Paypal charges 2.9%+$0.30 per transaction. Currently, if you need to refund a buyer or donor for any reason then Paypal keeps the $0.30, but they refund the 2.9% fee. Under the new terms they will no longer refund the 2.9% fee.

That means a returned item will hurt sellers even more than it did in the past.

The only way to opt out of this fee is to close your Paypal account before 5/7.

HT: myi, via DDF and DoC

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51 Comments On "Paypal Will No Longer Refund Processing Fees When You Refund A Transaction"

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David Haboba

I don’t understand what do you mean close your paypal account?


So PayPal could get worse


Goodbye PayPal.

What alternatives do fellow Dansdeals readers recommend?



Daniel Farzan

This sucks so bad


Not really retail merchants have to deal with this too, unless they negotiate a deal with their cc processor




I don’t blame them since eBay is dropping them soon, but eBay needs to step up and cover this for refunds then, imho , since they are the ones practically mandating that you offer a 30 day refund period.


Ebay owns PayPal and make profit on it too


Uh, no. eBay spun off Paypal in 2015, in 2020 Paypal will no longer be the default payment processor. Adyen (A dutch firm) will replace Paypal.


they never mandate a return…… they actually allow u to set up no returns accepted…
unlike amazon


It’s not mandated per say, but if you don’t you lose the top rated seller discount and your listing gets bumped down. So it’s pretty close to a mandate.


Not true. If the buyer claims soemthing is wrong with it they automatically force a refund


That must be against some sort of rule. That’s outright thievery.


How so? They did the work, now they’re doing it twice. I don’t have a problem with it, I sell about 1500 items a year, get maybe ten returns. Big whoop di doo


This sucks!!!

Any other way to collect money from eBay customers?


Could probably add a restock fee on returns.


think there is an option to only acept cc payments. tho ul lose a large percentage of ur customers


When does the new eBay processor start again?


Aren’t new payment options coming soon to eBay? That along with a policy like this will cause an exodus from PayPal usage


Need to find some government agency to complain to. This is BS. eBay is so seller unfriendly as it is. Now I can be outright robbed when a sale fails.


Stripe did this about a year ago..


I don’t know about that. They always credit me in full on refunds -30 cents


Has this already been implemented


I can’t imagine this will last long. Site will stop accepting PPYL very quickly if this holds.


How can i close my paypal account as a ebay seller?


Is this on existing transactions aswell?

Jeff B

RIP UPS Method


Whats the UPS method?


Lately I ask my buyers to pay via ZELLE. No fees at all.


Be VERY careful using Zelle to accept payment from people you don’t know. There are lots of scams out there; sometimes a transaction has not truly cleared and can be reversed, even when it appears the money is already in your account. (Google for more info.) Zelle specifies that its service is intended for use between two parties who know and trust each other.


i havent heaes of zeller per-se but others (venmo iinm) tos clearly state its not for bizz. so when buyer input ‘for ipad purchase’ they can get the transaction reversed bec it was for bizz…

but another consideration if u communicate via ebay msgs and write anything about zelle or otherwise circumventing ebay , they can shut down ur acct…


Ew, why set up a barrier? If I had to sign up for a new service just to buy one thing, I’d cancel and take the rep hit.


I’ll have to check on the rules about charging a restocking fee. No reason the seller has to pay the refund fees, or at least half of it, unless eBay demands it.


regarding restocking fee, i actually just researched this..
(for a different situation)
ebay officially removed all restocking fees last yr iinm
the new policy is that only if u offer free returns can u ‘charge a partial refund’
and only if the item comes back as damaged/broke/diff confdition than u sent it
if u wana recoup shipping fees for a buyers remorse return u need to have charged it to begin with , if u offered ‘free’ shipping, u cannot charge that back after return


If you do partial refund, eBay won’t refund you the final value fee. I never offer partial refund. I did it before and was never credited.


The problem is that if you wanna change payment method in eBay you’ll lose sales, most people only have PayPal, eBay has to come in really strong with the new payment processing company it should work.


Ebay ought to step up. They’ve practically been begging for sellers to offer free returns. And now another fee?? how about them offering to offset the costs of the shipping, the listing fee, and now the payment fee? There is almost no incentive to offer returns – other than the fact that your listing goes to the bottom of the page…And guess what when a buyer asks to cancel an order right after placing it – I’m going to respond too late order is already processed…


#1 there is an incentive. if u accept returns. u can charge a restocking fee (just called something else)
#2 with ur latter plan u may end up with more negative feedback and complaints not worth it..
lastly, if u are jus selling random stuff to get rid of or selling off ur ms purchases, i understand y u dont want returns. but honestly as an experienced ecommerce seller, returns are just a cost of doing bizz, accept it and move on, or ‘get back at them’ , move off their sitee, and jump on ur own site, and see where it gets u…




Square still refunds your fees when you refund a customer. I love square.

Jack out of the Box

Paypal recently added a nice option for withdrawing to a bank account. (This is at least for personal accounts.) For 25 cents you were able to transfer your Paypal balance to your bank account instantly.
Now I noticed that they changed the fee to 1%.
It’s worth knowing though, that a regular withdrawal usually arrives overnight.


The standard transfer to your bank is FREE from your paypal balance

Jack out of the Box

Did anyone say otherwise?


Does anybody know if Braintree is also effected? I just switched over to them (PayPal owned processing company) from stripe because they offered me better rates. Definitely thinking of switching back if Braintree is effected as well.


Stripe doesn’t refund fees either, I don’t see how switching back would help since you said Braintree is giving you lower rates, you’re still saving.


What do you mean by closing the account to avoid this?
Thank you.


In English don’t use them you won’t be charged.


This policy is now going into effect on October 11,2019. They had pulled back on this, however they are now quietly going forward with it. There has been very little publicity on this matter. My guess is that most sellers will find out about it the second or third time that the fees are not refunded.