What just happened? PayPal have announced some amendments to their user agreement that have not gone down well. From May 7, the company will no longer refund seller's fees when a buyer asks for their money back.
PayPal has been the go-to payment platform for many small vendors since it was popularized on eBay and other online marketplaces. Currently, when someone sells goods or services, they are charged a flat transaction fee, plus a percentage-based commission on the sale. If a customer asked for a refund, everything except the small transaction fee was returned, but now PayPal has said it will keep seller's fees, causing anger among users.
The proposed changes have no impact on buyers, who will still be able to purchase goods and request refunds as they always have. Instead this is a major blow for people using PayPal to sell things.
Anyone selling goods via PayPal pays 2.9% commission on the sale, which will no longer be returned when giving a full or partial refund. The flat fee is set at $0.30, and has never been subject to refunds.
People are angry about the changes, and have been quick to point out what it means in practice. If a vendor sells something for $1,000, but the customer changes their mind, the seller has not only lost their buyer, they will have also lost $29 in the process.
Alongside the refund changes, PayPal are also altering how they handle international payments and currency conversions. Transferring money to another country will no longer have a flat fee, instead PayPal are introducing a variable fee of 5%, with a minimum and maximum cost of $0.99 and $4.99, respectively.
PayPal has said that anyone who disagrees with any of their new terms is free to close their account.