PayPal Will No Longer Refund Fees on Canceled Orders

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paypal fee refund

PayPal Will No Longer Refund Fees on Canceled Orders

PayPal is making a small change to its User Agreement, but its one that could prove quite costly for sellers. According to a PayPal notice, the company will no longer credit fees for refunds for returns or other reasons.

Currently PayPal sellers are charged a fee of 2.90% of the transaction plus $0.30 for every sale. If you do a refund, then you get back that 2.90% and PayPal keeps the $0.30. But under the new rules, PayPal will now keep the whole processing fee that you were charged. That could be a huge charge on large orders.

New Fee Refund Policy

Here’s what the notice says:

We’re changing how we treat refunds. If you 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 you originally paid as the seller will not be returned to you.

The new fee rules go into effect on May 7, 2019.

More Changes

There’s also the following changes being made:

We’re removing the flat rate pricing for sending money to friends and family members who have PayPal accounts in a country other than the United States and introducing a new variable fee of 5% based on the amount you send with a minimum of $0.99 and a maximum of $4.99 per transaction.

We’re also removing any variation depending on the recipient’s country. “We are changing the currency conversion spread to 3.25% over a base exchange rate in situations where you are a sender of money in a PayPal transaction.

Based in NYC. Points/miles enthusiast for years and actively writing about it for the last two years at Danny the Deal Guru. I'm always looking out for deals. Making a few bucks is always nice, but the traveling is by far the best part of this business.

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  1. This is a perfect way for scammers (or competitors) to punish a vendor they want to get revenge on. Simply make numerous obviously fake charges that the seller will cancel. Alternatively, make a very high dollar purchase, then cancel after a brief time. It would be simple to rack up hundreds or even thousands of $$$ in fees for a seller.

  2. They are the absolute worst. No credit card processor of any kind charges merhcant fees on a refund. Greedy Monopoly to a given extent.


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