New Paypal policy update can hurt GB runners

[BlindAssassin111]

So just got an email about updates to paypal's terms of service and one of them stood out to me.



So what does this mean?
1) If you attempt to run a GB and it unfortunately doesn't meet MOQ and your invoices were already paid, once you refund you don't get the paypal fees back, you lose money. Even if you tack on a fee to the order to cover the fees, that gets returned to the buyer and you get shafted for that amount.

2) If you run a GB and want to do price drops at certain quantities and refund the difference, you lose the difference in fees.

3) If someone places an order with you but decides to cancel, you lose fees as well. Which can be used to hurt vendors and GB runners financially as every canceled order means lost money.

Paypal is getting greedy and this is a massive issue as almost all non-vendor level GBs are affected heavily, and even vendors are going to suffer from this as canceling your order now hurts them more than just a lost sale, you placing the order has lost them money. I am not sure what the best course of action is to do in response to such a blatant attempt to increase profits while hurting the user base, I just wanted to let people know and hopefully we as a community can come up with a solution that can prevent small GB runners and vendors from being hurt by this or at least caution them so they aren't financially hurt because of their product/idea not getting enough traction.

[donut_sauce]

Yikes. When does this go into effect? Does it apply to existing transactions or only new transactions from effective date of policy change?

[BlindAssassin111]

Yikes. When does this go into effect? Does it apply to existing transactions or only new transactions from effective date of policy change?

Goes into effect May 7th, and affects any action made after that date, so if you had a transaction today and it needs to be refunded on May 8th you are affected.

[tp4tissue]

/headscratch

sigh......


you account for this with the selling price.

Given some group buy experience, you will have some idea of what percentage of CANCELS you'll incur.

Divide that by the approximate expected sales unit,  and add that to the price of each unit, this passes the risk from you to ALL buyers..

Nothing's changed, the policy is merely designed to allow people to be more cognitively Compulsive, to instill a certain buying behavior.   This is a move at manipulating BUYERS, not sellers.


Pretty sure, that's how u business.. buh hey, wha Tp4 know anyway,  back to monitor calibrations.

[kiwi99]

/headscratch

sigh......


you account for this with the selling price.

Given some group buy experience, you will have some idea of what percentage of CANCELS you'll incur.

Divide that by the approximate expected sales unit,  and add that to the price of each unit, this passes the risk from you to ALL buyers..

Nothing's changed, the policy is merely designed to allow people to be more cognitively Compulsive, to instill a certain buying behavior.   This is a move at manipulating BUYERS, not sellers.


Pretty sure, that's how u business.. buh hey, wha Tp4 know anyway,  back to monitor calibrations.

Did you read the main post? try again he already addresses this.

[tp4tissue]

Did you read the main post? try again he already addresses this.

Again, nothing's changed, the seller can adjust the price, the seller has the option of partial refund, the seller has the option of creating a second processing payment agreed to be non-refundable.

All of these methods would offset this policy change. and paypal expects this to happen.

In the end, paypal is moving the risk around, the profit on all sides are going to be approximately the same. because the sale price will change

[BlindAssassin111]

Again, nothing's changed, the seller can adjust the price, the seller has the option of partial refund, the seller has the option of creating a second processing payment agreed to be non-refundable.

All of these methods would offset this policy change. and paypal expects this to happen.

In the end, paypal is moving the risk around, the profit on all sides are going to be approximately the same. because the sale price will change

So you are saying the best solution is to put a fee on everyone's order to help offset the cost of those that cancel and/or make fees non-refundable therefore only using partial refunds? I am pretty sure the partial refund can still be disputed and the seller may lose.

It still has an effect and that is why I made the post, to inform people so that they can either prepare for extra fees or make them non-refundable. Still a greedy policy change as paypal currently refunds fees on canceled orders and full refunds, which was nice but not after May 7th.

[tp4tissue]

It depends on what you believe is greedy.

In the prior system, paypal takes the risk, if no sale occurs, they work for free.

Now, the seller and buyer will take the risk. Since paypal does work regardless if the sale finalizes, they always gets paid.


If anything this is more fair to paypal.


We can't predict perfectly what's going to happen.  But overall, as seller, you have options to build the risk into the price.  This would include the situation you mentioned where people will successfully dispute the cost.

If you expect 1% of people to do it successfully, you just take that 1% and divide it into the base price.

If you're worried about the deal not reaching MOQ,  then write the condition of partial refund plainly in the invoice, the forum post, the seller communication , etc, such that if dispute does occur,  you have a firm stance.

[kiwi99]

It depends on what you believe is greedy.

In the prior system, paypal takes the risk, if no sale occurs, they work for free.

Now, the seller and buyer will take the risk. Since paypal does work regardless if the sale finalizes, they always gets paid.


If anything this is more fair to paypal.


We can't predict perfectly what's going to happen.  But overall, as seller, you have options to build the risk into the price.  This would include the situation you mentioned where people will successfully dispute the cost.

If you expect 1% of people to do it successfully, you just take that 1% and divide it into the base price.

If you're worried about the deal not reaching MOQ,  then write the condition of partial refund plainly in the invoice, the forum post, the seller communication , etc, such that if dispute does occur,  you have a firm stance.

But this change will also make it harder to reach MOQ, especially if theres doubt that you might not reach it and people thinking "we'll its not going to hit moq, might as well not join and just lose some $"

[Anakey]

so then you would need to charge additional smaller payment as a non returnable deposit when entering the gb if the customer cancels you still keep the deposit that would cover the fees

[BlindAssassin111]

Just going to drop this here: