4 ms·

Sadly it's not some business in the short run. It would be forfeiting probably 20-30% of revenue for 5+ years or however long it takes for the general populatio

by nickjj 8y ago

Sadly it's not some business in the short run. It would be forfeiting probably 20-30% of revenue for 5+ years or however long it takes for the general population to stop using PayPal (if such a movement would even happen). It's not quite a 40% loss because I imagine if the PayPal option were removed a number of people would use the CC option instead of aborting the sale. 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.

starbugs 8y ago
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.
pmiller2 8y ago
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/4/2017/12/2017_Consumer-Returns-in-the-Retail-Industry-Report.pdf 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?
- starbugs 8y ago
  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.
neka 8y ago
Chargeback fees are apples and transaction fees not being refunded are oranges.

by nickjj 8y ago

starbugs 8y ago

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.

pmiller2 8y ago

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/4/2017/12/2017_Consumer-Returns-in-the-Retail-Industry-Report.pdf 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?

starbugs 8y ago
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.

neka 8y ago

Chargeback fees are apples and transaction fees not being refunded are oranges.