3 PayPal policy changes every seller needs to know!

3 PayPal policy changes every seller needs to know!

I love PayPal.

Its the one system that is just simple to use and its simplicity is where its genius resides. Simply give anyone your PayPal email address and voila, payment is made into your account. If you want to send money to friends or family, just have their PayPal email address and transfer the cash.

The system has also evolved to allow businesses to send invoices to clients, track payments, even print shipping labels and even allow sellers to have a credit-card payment facility on their website.

So why are sellers not happy with PayPal all of a sudden?

PayPal has enough tech to understand scams, but it still relies on the seller not to fall for common PayPal scams. If the seller has abided by the terms and condition, PayPal would protect the transaction.

However, there are three new updated listed on the PayPal Policy Updates that will go into effect on May 7th that PayPal users need to be aware of:

Change 1: Variable rate for sending money via PayPal to non-USA accounts:

As the document states: “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. ”

So bear that in mind if you are sending money that is could cost $4.99 extra.

Change 2: Currency Exchange Rate

“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.”

That is straight forward. When you make a payment to a non-USD account, PayPal does a conversation so you can see how much money it will be in that currency.

Change 3: No more refund refunds

“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.”

Ok that is a biggie.

If you sell a product using PayPal, there is a 2.9% fee that the seller pays. This is the processing fee which is not uncommon and done with credit cards too.  However, if the seller needs to refund their customer for whatever reason, you will no longer receive this 2.9% fee.

So if you sell a $500 product and your customer needs a refund. You will lose out on this $500 + 2.9% processing fee.

What can sellers do to combat the PayPal refund fee?

Sellers need to be aware of these fees and therefore add a clause to their contracts that any refunds made will carry a 2.9% fee. A type of restocking fee that is common amongst bricks and mortar companies.

Of course, this is not legal advice, so chat with your local attorney to see what is legal in your country and what can be done.

Liron Segev - TheTechieGuy

Liron Segev is an award-winning tech blogger, YouTube strategist, and Podcaster. He helps brands tell their stories in an engaging way that non-techies can relate to. He also drinks way too much coffee! @Liron_Segev on Twitter

3 thoughts on “3 PayPal policy changes every seller needs to know!

  1. There was a hold placed on my sons pay pal account, leaving him no way to ship his product. So customers were complainin And wanted refunds. Since There was a hold on his pay pal, PayPal charged my checking g account 242.00 for refunds. How is this possible, as I didn’t do these transactions? I will never deal with PayPal ever again. This is twice they have messed with me!

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