PayPal has been receiving a lot of backlash since they have rolled out their new policy on refunds. Recently, the company is having problems with its seller protection.
Announced on October 11, the online payment company will keep a percentage from the amount of the fund that is refunded. Putting it simply, if you are a business owner and you refund a client in full, the percentage taken away by Paypal will be charged to you, giving your business a loss.
Anna Tims from The Guardian has reported about PayPal’s poor seller protection. Citing that the online payment company will not cover some losses under its seller protection and that fact will have sellers out of pocket.
“PayPal says its seller protection does not cover “not as described” claims, something I now find is a well known loophole to fraudsters,” Tims said.
“Why is it endorsing this fraud and not making customers aware that at any point a buyer can make a false claim and PayPal will uphold it?” she continued.
“Earlier this year, Paypal updated its User Agreement to change our refund policy,” a spokesperson from the platform stated. “In line with industry practice and according to our updated policy, we do not charge fees to process refunds, but when a seller refunds a transaction to a buyer, the fees originally paid will not be returned to the seller. The policy change is going into effect beginning October 11, 2019.”