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PayPal’s new refund deal is a hit, but sellers are furious

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PayPal under fire

PayPal has launched a new promotional deal that has made some online sellers seriously annoyed.

The deal means that if you buy an item and pay through PayPal, you can change your mind and PayPal will pay the return shipping costs.

The opt-in promotion runs to August 31, and can be used up to four times, up to a maximum cost of £15 each time.

But while it’s certainly a boon to oft-remorseful buyers, sellers who use PayPal have been quick to slam the payment service.

“Great for buyers, rubbish for sellers,” writes HotUkDeals user ublewit. “Especially for those of us who just sell the odd bit here and there.”

PayPal

The user continues: “There’s nothing to stop some fussy buyer buying one of my daughter’s grown out of, but still perfect, dresses, and deciding when it arrives they don’t actually fancy the colour after all.”

Another user – red23 – posted that the deal is “another nail in the coffin for sellers”, adding:

“I’ve sold my PlayStation 3 for an excellent price while the 50% discount was on. Now at any point said buyer can just ‘change his mind’ and post the thing back to me. Nothing lost for the buyer, the seller gets his used item back perhaps in a worst condition, loses the initial postage on it, and then has to resell.”

PayPal is the main payments service for eBay, so this promotion could have a significant impact on eBay sellers.

Writing on HotUKDeals, user s23adm complained that he’s “stopped selling on eBay because of the bias towards buyers” that he describes as “sickening”.

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But it seems these complaints haven’t deterred PayPal customers, many of whom have praised the new promotion. HotUKDeals told TrustedReviews that the deal “is receiving a lot of heat” from members of its community.

The deal already has a ‘hot’ rating of 2,820 on the deal-sharing site, which is the highest score of the month so far, even beating Tesco’s offer for “free fruit for kids whilst shopping” (2,631 ‘hot’ rating).

In response to the criticisms, a PayPal spokesperson told TrustedReviews the following:

“We are constantly looking at new ways to improve the online shopping experience for buyers and sellers alike. In recent research we found that a third of online shoppers are deterred from making more purchases because of how much it costs them to return goods. In an effort to address this, we have introduced Return Shipping On Us in the UK on a trial basis."

The spokesperson continued: "We now offer to refund the cost of return shipping if a buyer needs to send something back. This has no impact on the seller’s existing return policy. The service is designed to reassure buyers, and to help sellers convert more sales – which it has been doing successfully in more than 25 countries where the service has launched to date.”

Do you think PayPal’s new promotion is unfair to businesses? Let us know in the comments.

David Horn

April 11, 2016, 12:05 pm

It's not applicable if you're not a business seller, so the "I sold my old [insert item here]" excuse doesn't really wash.

cheese king

April 12, 2016, 12:04 pm

Worse case scenario, someone buys something, uses it for two weeks and returns it, we can already so this with distance selling laws, only difference is paypal are picking up the postage. After 14 days you cant return something unless it has a fault. After 30 days you can only return for a repair. Doesnt seem to be any real beef here.

Philip Cohen

April 12, 2016, 5:59 pm

"[I]f you buy an item and pay through PayPal, you can change your mind and PayPal will pay the return shipping costs."

Obviously, things are becoming desperate at "PreyPal" ...

Notwithstanding the otherwise constant stream of disingenuous and delusional nonsense that flows from eBay/PayPal, the share price history of these two clunky operators demonstrate the reality:

Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
Jul 2015 (post-split): PYPL ~$37; EBAY ~$28; AMZN ~$530;
Currently: PYPL ~$37; EBAY ~$24; AMZN ~$598—LOL

PayPal is standing still, and eBay has for years been effectively going backwards—at a rate of knots.

And, notwithstanding the "spin-off" of PayPal from eBay, eBay and "PreyPal" remain effectively joined at the hip—for at least the next five years—and anyone that thinks otherwise is simply uninformed; and, thanks to a continuation of most of the destructive policies introduced over the eight year reign (2007–2015) of the "Pain from Bain", John Joseph Donahoe II, the eBay marketplace is continuing on its slow journey down the toilet; nevertheless, during Johnny Ho's occupation of the eBay corner office, this cretin and his gang of hand-picked Keystone Kops still managed to obtain for themselves massive, unearned, "performance" bonuses—while the company's "long" shareholders received not one penny.

PayPal is a clunky, non-bank-licensed, non-deposit-insured, virtually non-regulated, "pretend" bank; a higher fee-charging payments intermediary that, in the main, rides on the back of the world's banks' existing payments systems, with no formal agreement with those banks other than PayPal's operating of a credit card merchant account facility with, and the making of direct debits/credits on some users' bank accounts via, one of those real banks.

PayPal is, in its own words, "a merchant of sorts", it is not a licensed "bank"; virtually everything that "PreyPal" does is done via "marketing" arrangements with licensed financial institutions—for example, look for the identity of the actual credit provider (in the micro print) on their credit providing instruments.

Funds received via "PreyPal" are at risk of being subjected to lengthy arbitrary holds; funds left "on deposit" with PayPal are not FDIC-insured. Even more perilous (for PayPal's shareholders), the great majority of PayPal's business originates from its (still) effectively mandated place on the eBay marketplace, so it logically follows that—with the destructive Johnny Ho-Ho-Ho now sitting at the head of the PayPal boardroom table—"PreyPal" will undoubtedly be accompanying eBay on its journey to the sewage farm.

The reality is, PayPal's parasitic, higher fee-charging payments operation has little long-term future—outside of its mandated place on the atrophying eBay marketplace—now that professional online/mobile payments offerings from MasterCard ("MasterPass") and Visa ("Visa Checkout") are available to any online merchant that has (or can obtain) a credit card merchant account with a real bank.

And, with respect particularly to "mobile" payments, notwithstanding Apple Pay's disappointing initial showing, methinks Apple Pay, Samsung Pay, Android Pay, "MasterPass", and "Visa Checkout", that is, those operations that have formal relationships with the world's retail banks and MasterCard/Visa, will soon enough throttle the flow of oxygen to a great deal of the clunky PayPal's parasitic operations.

PayPal users should never give PayPal an authority to direct debit their bank accounts; PayPal should only ever be given access to funds via a real-bank credit card account; that way your credit card-issuing bank will be the final arbiter of any transaction dispute; similarly, sellers should never accept payment via PayPal for goods that are going to be picked up by the buyer; PayPal offers sellers zero protection from scammers in such circumstances.

PayPal's one-time adoptive parent, eBay, is likely the most unscrupulous commercial entity operating on this planet; but, have no fear, eBay is an equal-opportunity fraudster; demonstrably, they will knowingly aid and abet the defrauding of buyers by unscrupulous eBay merchants who bid on their own auctions, and, conversely, of honest sellers by unscrupulous buyers—as long as there is a financial benefit in such fraud for eBay.

And if anyone thinks that the clunky "PreyPal" is any more scrupulous—given their equally poor customer service and lack of any mediation of transaction disputes by human beings, which effectively results in a hard-wired bias towards buyers/payers that they now necessarily have to pander to—good luck to all you small online merchants who may get burned in the process.

For a detailed analysis of the ugly reality of eBay’s demonstrable, calculated, facilitation of endemic shill bidding fraud on consumers on its auctions marketplace—Google "Shill Bidding on eBay: Case Study #5"

Goodbye clunky PayPal—it's not been nice knowing you—Google "Retail Payments: The Reality"

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