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Re-stock fees?

How should small businesses deal with PayPal's policy?

  • Charge a restock fee in the event of a refund?

    Votes: 10 45.5%
  • Raise prices to anticipate the additional liability?

    Votes: 12 54.5%

  • Total voters
    22

rockysalamander

Ideal_Rock
Premium
Joined
May 20, 2016
Messages
5,013
I think the best you can do is full disclosure. Its changing landscape out there and I don't envy small businesses. I will buy with restock fees, sometimes. It depends on how much I want the item, how exclusive it is and if I have the option to use that fee toward a different item.

For diamonds and gems, it might be important to consider how you want to handle someone who orders 2 or more stones/settings to look at them. Then, returns the unwanted one but has made a purchase. If that purchase is of sufficient value, you may want to float the 3% fee.

For each payment option., just lay out the details. I saw a table like this on a website for no-diamonds. When you click "pay", you had the option to link to this table (not a popup) with the prompt "What should I know about payment options". I made up the line for Paypal, but maybe this is useful. That said, I do tend to read everything. You might also have this kind of table on the payment "press go" page. I'm not a web designer, but I'd say please don't make it a popup or I'd never see it.


Upon Purchase of ItemUpon Return of Item*ExceptionsCurrency Conversion
Paypal InvoiceX% fee added (seller pays)X% fee added (buyer pays)If you buy an item within 10 days of the initial purchase of $X in value, we will subtract the X% buyer fee from the cost.We operate in USD. Currency conversion handled by Paypal
Paypal Friends and Family
Wire (Bank Wire)$0We operate in USD. The sending bank in your home location and wire company will assign a rate and, potentially, a fee that you will pay on sending.
Cash (usd)
Visa or MC
American Express
Google Pay, Apple Pay or otherplease refer to the payment company

*When a refund is requested, we do X (do you return the funds by the same path sent? always?)

{forgive the terribly formatted table, I have no idea how to make it look nice...}
 
Last edited:

yssie

Super_Ideal_Rock
Premium
Joined
Aug 14, 2009
Messages
19,951
I'm starting to understand this more now, thank you @distracts. I always offered exchanges for the same value but I'm now considering a price adjustment and going to full refund for purchases via my website. I am hoping that my willingness to help people find the right stone in my inventory instead of the most expensive one they can afford will keep me on the right side of this.

It's incredibly hard with Etsy to do full refund though as they're taking about 10% of proceeds from each sale as it is and also do not return it for a refund (not including the variety of other fees they charge sellers). 3% doesn't sound like much but once you're at 10% it starts to really sting. It's not 10% of your profit due to all costs to create the item, it can be a lot more. If a seller's profit margin is only 30% on a certain piece then they can easily lose half of that on a return via Etsy if you factor in the pickup of the item, the time it takes to check it is still in original condition and re-list it on all selling platforms etc. If it gets returned a second time it's now sent the seller into the red.
It's a really touchy thing for us to navigate, especially in an industry where returns are a normal and accepted thing.
You really do work with your customers to find what’s right for them. I know that first-hand. And @Rockdiamond does as well. And I had no idea you had a restocking fee - so much for “doing my homework” :bigsmile:

I posted hastily... if a vendor is attentive and tries to find a match for what I want - that’s always top priority! I’m not surprised you have a low return rate. Concessions like exchanges for full credit, hold full credit for future use, etc. all mitigate buyers’ worries. And of course value comes into play - I don’t mind gambling on a $30 restocking fee with the right vendor but there’s no chance I’d risk a $300 fee... but I never mind paying $10,300 rather than $10,000.

I really don’t envy small business owners in capitalist economies.

And I’m sorry to see the venom in this thread. Most of us don’t share it.
 

bludiva

Brilliant_Rock
Premium
Joined
Sep 23, 2017
Messages
1,939
i don't think it's fair to basically say "suck it up" ...the pp refund issue is big for a lot of small businesses...especially really small biz - solopreneur, etsy seller, etc. - hopefully another payment operator can fill in the void for that group. my understanding of cc/payment fees is they are a commission on the payment, so it seems unfair that the vendors are stuck with the fees when the transaction has been voided. another example of squeezing the many just a little bit more and more to make a *&^%ton of money for a rarified few.
 

Wewechew

Brilliant_Rock
Premium
Joined
Apr 8, 2017
Messages
1,947
Have you checked out Stripe? That is who we use for my husband’s business. I will look today when I’m by my computer how much their merchant fees are. Of course we’ve never had to give a refund (service business), but even if Stripe still keeps the fee it may be nice to get away from PayPal.
Looks like Stripe is 2.9-3% in fees depending on the size of the transaction.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,848
The main issue is not necessarily the commission rate- although small merchants might as well prepare for hikes there as well- what I see as the bigger issue is on refunds.
Part of the reason I felt motivated to post this thread was an incident the other day. Someone bought a ring on eBay for about $13k and the client told me that PayPal took the money from the wrong funding source. When she asked them to change the transaction she was told the merchant was the only one who could do it. So I immediately refunded the transaction- without ever withdrawing any funds. That’s when I found out we were hit with about $410 in non refundable PayPay processing fees. Wait .... WHAT???
So now, even if the client buys the ring again and PayPal handles their side correctly, there’s another $410 to pay.
I went up the line of supervisors - nope. That’s it. Buck up.
It’s a powerless and very sad feeling.

In spite of the ......stuff that happened I am truly grateful for the opportunity to discuss this here. Thank you all.
 

rockysalamander

Ideal_Rock
Premium
Joined
May 20, 2016
Messages
5,013
The main issue is not necessarily the commission rate- although small merchants might as well prepare for hikes there as well- what I see as the bigger issue is on refunds.
Part of the reason I felt motivated to post this thread was an incident the other day. Someone bought a ring on eBay for about $13k and the client told me that PayPal took the money from the wrong funding source. When she asked them to change the transaction she was told the merchant was the only one who could do it. So I immediately refunded the transaction- without ever withdrawing any funds. That’s when I found out we were hit with about $410 in non refundable PayPay processing fees. Wait .... WHAT???
So now, even if the client buys the ring again and PayPal handles their side correctly, there’s another $410 to pay.
I went up the line of supervisors - nope. That’s it. Buck up.
It’s a powerless and very sad feeling.

In spite of the ......stuff that happened I am truly grateful for the opportunity to discuss this here. Thank you all.
That terrible! I'm so sorry that happened and can see how this places the merchant in a terrible position.
 

yssie

Super_Ideal_Rock
Premium
Joined
Aug 14, 2009
Messages
19,951
The main issue is not necessarily the commission rate- although small merchants might as well prepare for hikes there as well- what I see as the bigger issue is on refunds.
Part of the reason I felt motivated to post this thread was an incident the other day. Someone bought a ring on eBay for about $13k and the client told me that PayPal took the money from the wrong funding source. When she asked them to change the transaction she was told the merchant was the only one who could do it. So I immediately refunded the transaction- without ever withdrawing any funds. That’s when I found out we were hit with about $410 in non refundable PayPay processing fees. Wait .... WHAT???
So now, even if the client buys the ring again and PayPal handles their side correctly, there’s another $410 to pay.
I went up the line of supervisors - nope. That’s it. Buck up.
It’s a powerless and very sad feeling.

In spite of the ......stuff that happened I am truly grateful for the opportunity to discuss this here. Thank you all.
I’ve done that. Told PP to use the wrong account and asked the vendor to refund and re-invoice. It was my fault for not double-checking my funding source before finalizing the purchase - the vendor shouldn’t be stuck with fees! But as a buyer I also don’t want to be stuck with that fee!

This scenario obviously wouldn’t ever happen when using a CC directly. I suppose [USER]@Wewechew[/USER]’s suggestion of explicitly outlining payment terms per processor... and having some sort of forced website acknowledgement of it prior to completing checkout... is the only way to handle that fairly
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,848
I’ve done that. Told PP to use the wrong account and asked the vendor to refund and re-invoice. It was my fault for not double-checking my funding source before finalizing the purchase - the vendor shouldn’t be stuck with fees! But as a buyer I also don’t want to be stuck with that fee!
Right???
You'd think that a billion-dollar company -PayPal- would have some sort of system to deal with an error like this without punishing their customers. But alas, we're all getting screwed here.....
 

Wewechew

Brilliant_Rock
Premium
Joined
Apr 8, 2017
Messages
1,947
Right???
You'd think that a billion-dollar company -PayPal- would have some sort of system to deal with an error like this without punishing their customers. But alas, we're all getting screwed here.....
They have cornered the market. They can do whatever they want... is it fair or even ethical? Nope.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,848
I think the best you can do is full disclosure. Its changing landscape out there and I don't envy small businesses. I will buy with restock fees, sometimes. It depends on how much I want the item, how exclusive it is and if I have the option to use that fee toward a different item.

For diamonds and gems, it might be important to consider how you want to handle someone who orders 2 or more stones/settings to look at them. Then, returns the unwanted one but has made a purchase. If that purchase is of sufficient value, you may want to float the 3% fee.

For each payment option., just lay out the details. I saw a table like this on a website for no-diamonds. When you click "pay", you had the option to link to this table (not a popup) with the prompt "What should I know about payment options". I made up the line for Paypal, but maybe this is useful. That said, I do tend to read everything. You might also have this kind of table on the payment "press go" page. I'm not a web designer, but I'd say please don't make it a popup or I'd never see it.


Upon Purchase of ItemUpon Return of Item*ExceptionsCurrency Conversion
Paypal InvoiceX% fee added (seller pays)X% fee added (buyer pays)If you buy an item within 10 days of the initial purchase of $X in value, we will subtract the X% buyer fee from the cost.We operate in USD. Currency conversion handled by Paypal
Paypal Friends and Family
Wire (Bank Wire)$0We operate in USD. The sending bank in your home location and wire company will assign a rate and, potentially, a fee that you will pay on sending.
Cash (usd)
Visa or MC
American Express
Google Pay, Apple Pay or otherplease refer to the payment company

*When a refund is requested, we do X (do you return the funds by the same path sent? always?)

{forgive the terribly formatted table, I have no idea how to make it look nice...}
Wow- I'm humbled and touched that you put this together!! Thank you!!
@jordyonbass - we also sell on etsy...I was under the impression they give back their ( over the top outrageous) fees in the event of a refund.....I'll check that part out.
But in general- etsy and eBay are developing into sites that put a horrible burden on small sellers.
This is part of the same story.
eBay, for example, won't technically allow re-stock fees. eBay demands sellers offer 30-day money policies- most small sellers can't afford such a long return period.

Plus, they monitor all communications. If you're caught doing anything that implies the seller is attempting an "off site sale" you will be thrown off eBay, without warning.
In our case, after about 20 email questions, I emailed back suggesting the prospective buyer call us to discuss details, or if they wanted to purchase.
Boom.
After about 18 years of selling on eBay- with never a complaint- we were thrown off eBay.
It took months of calling till we finally got a US-based customer service supervisor who re-initiated our eBay membership.
What it feels like is that all these behemoth companies are determined to wipe out sellers like Jordy, us and countless other small, family owned businesses.
And there's seems to be no way to stop them.
 

jordyonbass

Brilliant_Rock
Trade
Joined
Dec 6, 2014
Messages
1,652
@Queenie60 thank you so much for the advice, duly taken onboard.

And thank you @yssie, I guess that my willingness to help someone find the right Opal has alleviated any concerns about that previously! I've been blessed with a low return/exchange rate, which I hope is a good indicator of my transparency and willingness to help customers find the right stone.

And @Rockdiamond I thought Etsy didn't give it back when a refund occurs, I may need to look into that a bit further now.
 

arkieb1

Ideal_Rock
Premium
Joined
May 11, 2012
Messages
8,684
I have sold stuff privately had it returned and had to wear (I was out of pocket) Paypal fees, Etsy fees, bank fees all types of fees. I can see how on multiple transactions this would suck. It's getting that way that vendors recommend using things like Transfer Wise, etc and they will no longer accept Paypal, because of all the fees.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,848
UPDATE!!!!!!!
Just got off the phone with yet another PayPal supervisor who explained that going forward, we'd have to accept the new system, but since this was an error- they made an exception and allowed the client a full refund without punishing us!!!!!!

Yipee Yipee

It's not even the $400 as much as restoring my faith in humanity....
 

Wewechew

Brilliant_Rock
Premium
Joined
Apr 8, 2017
Messages
1,947
UPDATE!!!!!!!
Just got off the phone with yet another PayPal supervisor who explained that going forward, we'd have to accept the new system, but since this was an error- they made an exception and allowed the client a full refund without punishing us!!!!!!

Yipee Yipee

It's not even the $400 as much as restoring my faith in humanity....
YAY!!!!!

You may need to put a disclaimer somewhere that if the customer funds their PayPal payment incorrectly THEY are responsible for the PayPal fees if they insist on changing the funding source.
 

missy

Super_Ideal_Rock
Premium
Joined
Jun 8, 2008
Messages
27,802
UPDATE!!!!!!!
Just got off the phone with yet another PayPal supervisor who explained that going forward, we'd have to accept the new system, but since this was an error- they made an exception and allowed the client a full refund without punishing us!!!!!!

Yipee Yipee

It's not even the $400 as much as restoring my faith in humanity....
Congratulations. Glad it was resolved in your favor.
Sometimes it all depends on who you get on the phone. Some people are nicer than others. Period.

If you got someone else they might have easily as said tough luck and too bad. I have been known to call customer service (for any business not talking specifically about PayPal now) a second time if the first time I get who I consider an individual who is not empathetic. And more than occasionally it works.

Some humans are nicer, kinder and more understanding than others.
 

mrs-b

Ideal_Rock
Premium
Joined
Aug 18, 2013
Messages
6,146
@Queenie60 thank you so much for the advice, duly taken onboard.

And thank you @yssie, I guess that my willingness to help someone find the right Opal has alleviated any concerns about that previously! I've been blessed with a low return/exchange rate, which I hope is a good indicator of my transparency and willingness to help customers find the right stone.

And @Rockdiamond I thought Etsy didn't give it back when a refund occurs, I may need to look into that a bit further now.
@jordyonbass -

I have no opinion on this issue except to say - any re-stocking fee was MORE than covered when you had a massive sale to celebrate the birth of your new baby boy! I bought a bunch of opals from you at a great price - so my only suggestion here is....

Please have more kids?

:mrgreen:

I have to say, tho, it's hard to be too offended about a 3% restocking fee when you have the occasional 30% off sale. Between the sale, and the AU-US exchange rate, a 3% restocking fee would have been WELL lost in the wash. Customers who stick around for a while will see themselves pay those fees...but will also see themselves benefit from some pretty hefty sales. You get a sense of a vendor over time - whether they're gouging their customers or whether they've got more of a 'share the wealth' policy. With a vendor like that, customers will tolerate things like restocking fees. You scratch my back and I'll tolerate the instances where you have to scratch your own.
 

jordyonbass

Brilliant_Rock
Trade
Joined
Dec 6, 2014
Messages
1,652
@jordyonbass -

I have no opinion on this issue except to say - any re-stocking fee was MORE than covered when you had a massive sale to celebrate the birth of your new baby boy! I bought a bunch of opals from you at a great price - so my only suggestion here is....

Please have more kids?

:mrgreen:

I have to say, tho, it's hard to be too offended about a 3% restocking fee when you have the occasional 30% off sale. Between the sale, and the AU-US exchange rate, a 3% restocking fee would have been WELL lost in the wash. Customers who stick around for a while will see themselves pay those fees...but will also see themselves benefit from some pretty hefty sales. You get a sense of a vendor over time - whether they're gouging their customers or whether they've got more of a 'share the wealth' policy. With a vendor like that, customers will tolerate things like restocking fees. You scratch my back and I'll tolerate the instances where you have to scratch your own.
Awww shucks, thank you :saint: and unfortunately there's no plans for another bubs at this point, we're still having too much fun with #1 :mrgreen:
 

missy

Super_Ideal_Rock
Premium
Joined
Jun 8, 2008
Messages
27,802
Awww shucks, thank you :saint: and unfortunately there's no plans for another bubs at this point, we're still having too much fun with #1 :mrgreen:
Well, they say having two (or 3 or 4) is (almost) just as easy as having one... Oh wait, I think that refers to cats and dogs. That is very different. Never mind.:wink2:

 

jordyonbass

Brilliant_Rock
Trade
Joined
Dec 6, 2014
Messages
1,652
Well, they say having two (or 3 or 4) is (almost) just as easy as having one... Oh wait, I think that refers to cats and dogs. That is very different. Never mind.:wink2:

Well between myself, my wife and son and the cats there's 6 mouths to feed. What's one more?
I think I might need to do another sale again just thinking about that :lol:
 

lissyflo

Brilliant_Rock
Premium
Joined
May 23, 2016
Messages
690
In a perfect world, what Paypal should do is charge a flat admin fee on returns rather than a % fee, or charge a % fee but capped at a maximum level. A couple of pounds to return clothes bought online is fine by me (prices in general are always higher where you want flexibility), but 3% on the purchase of a 3ct stone (unfortunately theoretical!) would absolutely be less fine!

In any kind of fair transaction, all the return fee needs to do is cover PP’s time to process the sale and return (which is surely minimal in an electronic system), plus maybe a small ‘insurance’ contribution in case they are exposed to higher risk on these types of transactions (more fraudulent transactions in the sale and return pool than in non-returned sales, say, which might cause problems for them).

In the absence of common sense on their part, I would also vote for a small uplift in prices across the board. Obviously not a 3% uplift as we’d all then be paying restock fees on every item we buy and, under the law of averages, would be better off just paying an additional 3% on items we actually return! But a minimal uplift seems fair - I appreciate your point that it’s spreading a cost of returns onto customers who may not make them, but the flip side is that it’s maintaining a flexible distance-buying environment that everyone ultimately benefits from.
 
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