Re:PayPal starts charging 2.9% for refunded sales
by pmiller2 on Wednesday May 08, 2019 @09:20AM
(#19858539)
The correct strategy for merchants here is to raise prices to cover these refunds. Ultimately, this will all fall on the backs of consumers, just like every other “cost of doing business” does.
To put some sense of magnitude on it, according to https://appriss.com/retail/wp-content/uploads/sites/4/2017/1... the median percentage of retail sales refunded across all retail categories is 10%, so this translates to about a 0.3% increase in prices. Would you tolerate a 0.3% decrease in return on your investments in exchange for no additional benefit?
Re:PayPal starts charging 2.9% for refunded sales
by starbugs on Wednesday May 08, 2019 @01:04PM
(#19860844)
If you can raise prices without losing business that sounds like a good idea. I doubt everyone can.
Also there are big players in the market that don't support PayPal at all, e.g. Amazon.
Re:PayPal starts charging 2.9% for refunded sales
by starbugs on Wednesday May 08, 2019 @09:06AM
(#19858448)
And this is sadly exactly what the strategists at PayPal have calculated.
I understand that losing that amount of business is painful, but on the other hand, in the long run it pays to have principles.
I guess some businesses will try and put the fee on the customer.
Still though, that's a huge loss for an extended period of time. I definitely don't like what PayPal is doing but Stripe is also pretty evil in a similar fashion. If someone disputes a charge (due to fraud that Stripe is supposed to prevent but doesn't) then you lose the processing fee and you (the business owner) also get billed a static $15 fee on top of that.