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It creates a financial disincentive to consciously fail to deliver reliably. If you ship 100 people a $100 product with a 5% defect rate, earning $10,000: Pre
by floatingatoll 8y ago
It creates a financial disincentive to consciously fail to deliver reliably.
If you ship 100 people a $100 product with a 5% defect rate, earning $10,000:
Previously, you would refund 5 people $100 each, at a cost of 5 * $0.30 = $1.50 (effectively, 0.3%) + $500.
Now, you would refund 5 people $100 each, at a cost of 5 * $2.90 = $14.50 (fixed at 2.9%) + $500.
I imagine Paypal hopes that this increase in financial cost to refunds will diminish what, presumably, is an excessively high rate of refunds that resulted in the otherwise-unpopular rule change.
Apple does the same for iOS app purchase refunds, except at their 30% rate instead of 2.9%, there is a much higher price to pay for selling something so bad that people manage to refund it (which Apple makes much more difficult than Paypal, from a pure UX perspective).
- bluedino 8y agoI ran into this issue yesterday, which made me go back to check my account (who read their ToS?) I was selling a small item online, and a few people were inquiring about it. I said the first person I get payment from gets the item, I would not “hold” the item if another buyer wanted it. Person X sent me a payment, and an hour later so did person Y. I had to refund person Y so I lost what looks like 30 cents.
- floatingatoll 8y agoThey likely identified this pattern as a way for sellers to avoiding eBay fees and protections years ago when they were merged with eBay, and only now has the problem become financially relevant to solve. The fees for those refunds might well have been coming out of their pockets this whole time and none of us every knew.