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Heads up, PayPal users.
Refunds have always been an important and unavoidable facet of the average seller's business. Most sellers offer some sort of timed guarantee for unopened packages, making it easy for buyers to decide on purchases.
However, with this change, it will be harder for small sellers to reliably make money on the products they sell through PayPal.
How the PayPal Policy Change Could Impact Sellers
PayPal charges sellers 2.9% of a transaction, plus a flat $0.30 fee. So, let's imagine selling a $500 computer to a customer.
PayPal charges (roughly) $15 for the transaction. Now imagine the buyer cancels the transaction a day later, before the item ships, and reasonably asks for a refund. Before, PayPal would refund the processing fee as well. Now, the seller is out $15.
Compounding that fee over dozens of similar refunds can really add up. And that's to say nothing of more expensive transactions.
Looking at PayPal's Competitors
PayPal's policy update comes at an inopportune time for the company. Like winter, eBay's Managed Payments service is coming.
Currently only available to a select group, eBay claims that it'll be accessible to more sellers by mid-2019, and to most customers by 2021.
Since eBay is PayPal's stomping ground, this could end poorly for PayPal. With PayPal potentially cutting into sellers' profit margins, eBay's upcoming service may look more attractive to potential users.
It also leaves the door open for other companies, like Zelle, to step in and expand their presence in the space.
Only time will tell which service will become the market standard.
Any product or service prices/offers that appear in this article are accurate at time of publish, and are subject to change without notice. Please verify the actual selling price and offer details on the merchant’s site before making a purchase.