PayPal and Credit Cards
Author: Ira
Posted: Tue May 18, 2004 11:29 pm
Post subject: PayPal and Credit Cards
I just discovered a slight problem with PayPal. I had paid for an item I won on eBay through Paypal using a credit card. The seller subsequently could not deliver the item and offered a refund which I gladly accepted, expecting that the amount would be credited back to my card. Not so! says Paypal. They will only transfer refunded money to the bank account that's on file with them. Obviously this is not a good situation., but I don't know anything that can be done to rectify the situation.
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Author: Verne
Posted: Wed May 19, 2004 7:30 am
Post subject: PayPal and Credit Cards
Hi Ira,
"They will only transfer refunded money to the bank account that's on file with them." I wonder whether that's even legal? (I forgot, PayPal is the Law)
I've been told by more than one merchant that they must credit any refund to the credit card used in the transaction. Otherwise, I could buy a bunch of stuff, take it back for a cash refund, and walk out with a "cash advance". (without the fees)
Entire criminal operations, tele-evangelists, and small countries are funded in this way. It's called reverse money laundering or the dirty diaper theory of economics. Over time, the constant besoiling and resoiling of the money, causes a spontaneous cash nova and a new currency is born.
Author: Polonius
Posted: Wed May 19, 2004 10:22 am
Post subject: PayPal and Credit Cards
PayPal doesn't want to give up the fee that it collected from the seller by allowing the credit card charge. And this really can be an anti-fraud measure.
Quote:
I've been told by more than one merchant that they must credit any refund to the credit card used in the transaction
That's the rule in theory, and the merchants go along with it because that way they are credited for some of the fees charged by Visa/MC/Discover/Amex when the refund is issued. But typically PayPal is used by sellers who are not able to accept credit cards themselves. They have a contract with PayPal, not the credit card issuers--and PayPal's rules apply.
But what's the problem? The refund goes to your bank account and then you transfer it to your credit card account. How does that policy harm you
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Thu May 20, 2004 4:26 am
Post subject: PayPal and Credit Cards
It's not a "clean" transaction. Two and three step transactions cause confusion and extra bookkeeping. If anyone normally carries a balance on their cards (I don't) the PayPal process will result in higher finance charges.
Author: Polonius
Posted: Thu May 20, 2004 11:13 am
Post subject: PayPal and Credit Cards
I agree the process can be a hassle, but it doesn't always result in higher charges even if a balance is carried. For example, the credit and transfer can be done the same day. It's bad practice to count on a merchant issuing a refund to a charge card at once anyway--sometimes it takes a couple of weeks for a refund to post, and we've all had problems with merchants not issuing a prompt refund as promised to the card.
Other firms do similar things. I like shopping at Costco. This week I bought a computer hard drive--it was a "pick up" item, meaning you pay at the register then you get it at a special area. But even though the drive was supposed to be available it wasn't. The charge was made to my American Express account. I was asked if I wanted the card credited or if I wanted the refund in cash instead. I took the cash. Instant cash advance for no fee.
Take it one step further. Costco ONLINE accepts all major credit cards. The Costco stores only accept Costco and AmEx. So when I buy online, I always use a Discover card with its rebate. If I return the item to my local Costco store, it can't credit a Discover card--so it gives me the refund in cash/check. I still get the Discover rebate even though the merchandise was returned. Happened last month on a digital camera I bought online and didn't like when I looked at it. (I don't buy planning to return things, but it happens...and then I get a rebate for my trouble...)
Posted: Tue May 18, 2004 11:29 pm
Post subject: PayPal and Credit Cards
I just discovered a slight problem with PayPal. I had paid for an item I won on eBay through Paypal using a credit card. The seller subsequently could not deliver the item and offered a refund which I gladly accepted, expecting that the amount would be credited back to my card. Not so! says Paypal. They will only transfer refunded money to the bank account that's on file with them. Obviously this is not a good situation., but I don't know anything that can be done to rectify the situation.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Verne
Posted: Wed May 19, 2004 7:30 am
Post subject: PayPal and Credit Cards
Hi Ira,
"They will only transfer refunded money to the bank account that's on file with them." I wonder whether that's even legal? (I forgot, PayPal is the Law)
I've been told by more than one merchant that they must credit any refund to the credit card used in the transaction. Otherwise, I could buy a bunch of stuff, take it back for a cash refund, and walk out with a "cash advance". (without the fees)
Entire criminal operations, tele-evangelists, and small countries are funded in this way. It's called reverse money laundering or the dirty diaper theory of economics. Over time, the constant besoiling and resoiling of the money, causes a spontaneous cash nova and a new currency is born.
Author: Polonius
Posted: Wed May 19, 2004 10:22 am
Post subject: PayPal and Credit Cards
PayPal doesn't want to give up the fee that it collected from the seller by allowing the credit card charge. And this really can be an anti-fraud measure.
Quote:
I've been told by more than one merchant that they must credit any refund to the credit card used in the transaction
That's the rule in theory, and the merchants go along with it because that way they are credited for some of the fees charged by Visa/MC/Discover/Amex when the refund is issued. But typically PayPal is used by sellers who are not able to accept credit cards themselves. They have a contract with PayPal, not the credit card issuers--and PayPal's rules apply.
But what's the problem? The refund goes to your bank account and then you transfer it to your credit card account. How does that policy harm you
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Thu May 20, 2004 4:26 am
Post subject: PayPal and Credit Cards
It's not a "clean" transaction. Two and three step transactions cause confusion and extra bookkeeping. If anyone normally carries a balance on their cards (I don't) the PayPal process will result in higher finance charges.
Author: Polonius
Posted: Thu May 20, 2004 11:13 am
Post subject: PayPal and Credit Cards
I agree the process can be a hassle, but it doesn't always result in higher charges even if a balance is carried. For example, the credit and transfer can be done the same day. It's bad practice to count on a merchant issuing a refund to a charge card at once anyway--sometimes it takes a couple of weeks for a refund to post, and we've all had problems with merchants not issuing a prompt refund as promised to the card.
Other firms do similar things. I like shopping at Costco. This week I bought a computer hard drive--it was a "pick up" item, meaning you pay at the register then you get it at a special area. But even though the drive was supposed to be available it wasn't. The charge was made to my American Express account. I was asked if I wanted the card credited or if I wanted the refund in cash instead. I took the cash. Instant cash advance for no fee.
Take it one step further. Costco ONLINE accepts all major credit cards. The Costco stores only accept Costco and AmEx. So when I buy online, I always use a Discover card with its rebate. If I return the item to my local Costco store, it can't credit a Discover card--so it gives me the refund in cash/check. I still get the Discover rebate even though the merchandise was returned. Happened last month on a digital camera I bought online and didn't like when I looked at it. (I don't buy planning to return things, but it happens...and then I get a rebate for my trouble...)
posted by CardRatings.com at 1:19 PM
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