New PayPal User Agreement on Refund Policy (Updated April 2019)

Today we are breaking down PayPal’s new changes on user agreement announced on 7th April 2019 that will come into effect on May 7th 2019 and what it means for businesses. We will be focusing on the thorny issue for businesses, that is Refunds.

PayPal Use Agreement Changes on Refunds (April)

Currently, when you sell items or services,  PayPal charges you a commission of 2.9 percent plus $0.30 per sale before the money arrives in your account. They customer is not charged. If a customer asks for a refund, he will receive his money in full except for a small transactional fees.

In the new user agreement on Refunds, PayPal says;

New Changes to PayPal User Agreement on Refunds Policy 2019
Understand the New Changes to PayPal Account User Agreement on Refunds Policy that will come into effect on 7th May 2019/Photo

This means that in the case of a refund, PayPal will keep the fees (commission (2.9%) + fee (30 cents) you were charged when a customer paid for products or services you offered.

For example, if are offering a course worth $1,000, the customer pays for it, but changes their mind,  decides to cancel subscription  and request for a refund, you  will not have only lost the customer, but  $29 that was charged as commission when the seller paid $1000.

It will be a double tragedy if you are selling physical products like computer parts and your business is responsible for shipping fees.

This is a major point of concern for sellers using PayPal.

Why Did PayPal Implement this Policy

Maybe this must be a case of pushing sellers to ensure that they sell or offer services that meet customer satisfaction to a point where there will be little or no refunds at all because any refund is a direct and major loss to the  seller.

PayPal Policy Update

You can read the full April 7th 2019 paypal policy update.

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