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If you’re shopping online with PayPal, it’s good to know in advance what support or buyer protections you have if things don’t work out. If an item you buy is not the right size, not as advertised, or you simply change your mind, can you get a refund with PayPal?
This guide covers all you need to know about PayPal returns.
We’ll also touch on a smart way to save when shopping with ecommerce retailers based overseas. By opening a Wise foreign currency account online for free, you can skip marked up exchange rates, and lower the costs of buying from your favourite international brands. All this and more, coming right up.
If you buy something through PayPal, and you’re not satisfied with the product, you should first contact the seller to request a refund. To do this you log into your PayPal account and go to Activity. Here you can see your recent transactions. Select the transaction you want to get a refund for, and click on it, to view the seller’s contact details. You can then email the merchant directly to ask for a refund¹.
If you run into problems, and can not get a refund easily, you have the option of opening a dispute via the PayPal Resolution Centre.
PayPal offers buyer protection for most purchases². However some categories, like real estate and motors are not covered, and there are also eligibility criteria for other purchase types, so check out the details for your specific transaction.
If your purchase is eligible for buyer protection, you’ll need to open a dispute in the Resolution Centre, and then raise a claim within 20 days. PayPal will investigate the issue and if they find in your favour, issue a refund of the cost of goods plus the original shipping fee.
If you’re awarded a refund - or if your seller agrees upfront to refund the item - you’ll get the money back in different ways depending on how you paid in the first place. The payment will in most cases be credited to the same payment method used when purchasing - credit or debit card, PayPal balance or linked bank account³.
If you’re refunded for a purchase made in Australia, and paid in AUD, you should get the full value back with no fees deducted for the refund. However, it’s important to know that purchases made overseas or in a foreign currency may not be fully refunded. This is because the exchange rate used may not be the same as the one prevailing at the time of purchase.
PayPal only guarantees you’ll receive the same exchange rate that was initially used if you request a refund within one day of the purchase. Any later and the exchange rate applied will be the rate being used on the day the refund is processed. This may mean you get back less than you paid, due to fluctuations in the exchange rate¹.
It’s also worth noting that you’ll pay an additional fee on the exchange rate applied when you use PayPal for any purchases made in a foreign currency. This means that PayPal takes the mid-market rate and then adds a currency conversion fee of 4% to calculate the rate used when processing your purchase⁴. To avoid this, you can choose to use a low fee multi-currency account when shopping online. We’ll look at this alternative in more detail later.
If your seller agrees to refund your money, they can trigger the payment back to you immediately, although it’ll likely still take a little time for the money to get back to you. If your refund is headed to your linked bank account, the time it takes will depend on your own bank’s processes. Refunds to a credit or debit card can take up to 30 days, depending on the card network and issuer.
The overall length of time it takes to get a refund if your seller disputes could be much longer. You’ll need to first ask for a refund directly, and if this fails, open a dispute on the PayPal resolution centre within 180 days of the purchase. Within 20 days of opening the dispute you should escalate to a claim, to have PayPal review and decide on the case. After that, if your claim is successful, your payment will be triggered - although you may still have another wait of up to 30 days if you paid initially using a card.
Depending on what’s important to you, you might decide that using PayPal for your purchase isn’t the best option.
For example, if you are buying from a retailer based overseas, and need to pay in a foreign currency, you might find your purchase costs less with a Wise foreign currency account. You’ll be able to top up your free online account in AUD and then switch to the currency you need using the mid-market exchange rate with no markup. You just pay a low, transparent fee and can avoid foreign transaction costs and markups. Your account will also come with a Platinum debit Mastercard for easy shopping on and offline.
If what matters to you is getting protection in the event you can’t return an item bought online, you might find that you automatically get refund protection with your credit card. This means you can just shop online with your credit card, to enjoy buyer protections, instead of using PayPal. You’ll need to check the terms of your particular credit card, to ensure your purchase is eligible for refund protection. Some items may not be covered, or you might find that there are limits to the value you can reclaim.
Whilst shopping online is common for many of us, it’s natural to wonder what happens when things go wrong. Using PayPal for online purchases can mean you get increased buyer protections compared to other methods of payment. However, there are limits - and you’ll need to follow a strict process to have your refund or dispute processed. You may also want to look at the buyer protections which are automatically available through your regular credit card, in case these offer better flexibility or suit your needs more.
Also, don’t forget to look at other ways to make shopping online simpler and cheaper, including getting a free online account from Wise to cut the costs of buying from your favourite international merchants.
All sources accurate as of 19 August 2020
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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