I’ve been a customer of PayPal since the early days of eBay when it was all about taking old stuff that you really wanted off the hands of a guy halfway across the world who didn’t want it anymore – it was one great big, fun, person-to-person, International car boot sale.
PayPal made their money by charging a modest premium on these transactions and nobody minded paying it because they made paying for it possible.
Over the past few years though PayPal have got more greedy – their exchange rates on international transactions are preposterous – way way more than any currency trader or travel agent would charge – and that’s lost us deals on more than one occasion because the customer just won’t pay it.
Paypal’s percentage rates for standard transactions have gone up as well and they are no longer a cost-effective way to take payment from a customer – we have still used them from time to time if the customer really wants to because this is a customer service business and we try and help if we can.
The straw that has broken the camel’s back came relatively recently when PayPal told its customers that all charges levied on re-funded payments will stand.
What that means to us is that if we sell someone a £10,000 watch on PayPal, we pay a £400 fee for doing so – that’s a LOT of our profit but as I said, if the customer REALLY wants to use them…
The thing is that if the customer then changes their mind and sends the watch back through no fault of ours (which they have the right to do without giving a reason) PayPal keeps their fee and we are £400 down.
But still, these are the terms of doing business with PayPal and they are quite transparent about them – if you don’t like the terms, just don’t use them. So fair enough.
But how about these two for real life examples, both of which have happened to us within the last three months:
- A customer in America pays a £1000 deposit by PayPal to secure a £15,000 watch. It is expressly stated that the deposit is not refundable in the event that he doesn’t go ahead with the purchase – after all, that’s the point of a deposit right? – and he agrees to this condition.
He then pays the £14,000 balance, also by PayPal and because this is an international transaction, PayPal’s fees are almost £900.
Needless to say, the customer pulls out of the deal as a result of a misunderstanding about import duty (he thought that we should pay it for him) – he agrees that we should refund him the £14,000 and keep the £1,000 deposit as per the contract. In this instance, it just about covers our PayPal fees leaving very little to cover the inconvenience, wasted time, or the fact that we could’ve sold the watch to somebody else in the month that we held it for him.
Two days later he then messages PayPal direct demanding that the £1,000 deposit is refunded because we never sent him the watch….. despite seeing copies of all our correspondence – there was a lot of it over a one month period – PayPal refunded him the deposit and we we lost £900. I disputed it until I was blue in the face but no joy.
2. A customer in Europe buys a watch and wants to pay by PayPal, so going against my better judgement, we send him a PayPal invoice.
The next day, payment is received from someone else’s PayPal account in America – you may not be aware of this if you don’t work in retail but this is dodgy and already smells like a fraud.
The customer then emails and asks us to send the watch to him in Europe despite the fact that the payment came from America and PayPal have given us an American delivery address – this now smells even more like a fraud and it’s completely against all PayPal guidance.
Basically, if you send goods to any other address than the one that PayPal gives you and the transaction goes wrong, you have no protection and will lose ALL your money (in this case, £6,350)
I explain that we can’t send the watch to the different address and ask the customer to contact PayPal and get them to give us authority to send it to him and not to America – this is easy to do and I’ve done it myself loads of times.
Instead, the customer demands a refund on the basis that they haven’t received their watch. PayPal issues the refund – to a potential fraudster – and guess what, we get stuck with the £230 charge.
Despite acting in accordance with their instructions, trying to avoid a fraud for both us and PayPal, they send the money back to the customer and refuse to waive our fee. Again, Blue in the face, nada, etc etc.
So, having done nothing wrong, only working to PayPal guidelines and trying to do the best for everyone, we are now over £1200 down in PayPal fees this year and they don’t give a damn.
And that, dear customers, is why we will never be able to accept PayPal for payments again (and advise you to be extremely careful if you choose to).
I’m really sorry if this inconveniences some of you but on both moral and financial grounds, I just can’t, and won’t, do it.