The Oz Round Table boards > PayPal

Paypal offer to refund postage costs for returned items

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*Brum6y*:
The latest news.....


I have received the funds.

It is for $19.25 AUD - which is precisely the sum it cost me to return the goods.  This was the cheapest option that had tracking.

The payment came from Telus International, which is the company providing this service on behalf of PayPal.  The funds are now sitting in my PayPal account as a PayPal balance.


So, as far as it seems from a buyer's perspective (from my one-off experience) the deal has delivered.  One wonders, though, about the future of such a scheme.....

*Brum6y*:
From an affordability perspective, the numbers I have played around with strongly suggest to me that PayPal would not be interested in fully funding this service indefinitely.

On the basis of, say, $100 purchases and a return cost similar to mine, it would take the PayPal fees from eight (8) purchases to fund one return.  For a return cost of the maximum $45, it would require seventeen (17) such purchases.

Factor into this the probability that (I expect) the greater volume of purchases will be less than $100 and the ratios get worse.  For $50, the ratios are 13 and 30.

Assuming we use the $50 transaction and moderate return cost, for PayPal to protect their existing profit by implementing this scheme - and fully funding it - they would need to take their present turnover and ADD 13 new transactions for each Refunded Return across their whole transaction base.  To increase their profit by the fees from one transaction, they would need to add 14 new ones.

Now, the numbers I have used here are extremely simplified, but they will give you some idea that the magnitude of the leverage required to achieve full funding by PayPal is not insignificant.

Other factors that lean into the higher cost potential will include:
 * that buyers get to choose the service used for the return, with the only limitation being the $45 maximum.
 * making this service available will mean more people will return items than do currently.


Bottom line - If implemented as a standard service, the likelihood that it will be Sellers who will be footing the bill is (IMHO) extremely high.



I know - that was stating the obvious.

*CountessA*:
Sometimes the obvious is simply not seen by the people affected.

Human reluctance to see a looming threat... hoping that by staying still in the shadows the danger will pass...?

It is certainly interesting to read your update, and I would agree that PayPal seem (to me) to be unlikely to implement this as a standard service funded by them (i.e., funded by PayPal). If it were to become standard, I would also agree that it is at least probable that the sellers would be paying for it.

*Brum6y*:
Seems the service is here to stay ... for an unspecified period, at least.

Same deal as before (from a cursory read of the general conditions) but limiting it to 8 claims per year for up to $45 each.

I know we've speculated - but I wonder how the Sellers are actually affected by this?

callostemma:
So full cost allowed for returns is $45
would hardly pay for a parcel from  oveseas

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