Depending on the original payment method, PayPal can process refunds the same day they are issued. However, because PayPal sends refunds using the same payment method as the original transaction, it may take some time for the funds to appear. For the most part, there are a ton of variables in play when you request a refund. But the question is, what exactly are these variables? How do Paypal refunds work? Let’s find out…
Overview
PayPal is one of the most popular payment systems in the world. It is lightyears ahead of many competitors, with the ability to accept payments online and even integrate with other software. Even with the best systems, you may need to request a refund from time to time.
The most important thing to remember is that PayPal is just a payment platform, not a merchant. When you request a refund through PayPal, you are actually asking the seller for a refund. So a lot depends on how long it takes the seller to process the refund.
Your payment method is also an important consideration. Bank refunds are typically faster than credit card refunds. Let’s look more closely at how this system works and what you can expect.
PayPal Refund Fundamentals
Within 180 days of purchase, you can request a refund for any PayPal transaction. The seller will then either approve or deny the refund.
If the seller agrees to the refund, your return will be processed differently depending on the original payment method. Your refund may take three to five days if you use a bank account or your PayPal balance. If you paid with a credit or debit card, refunds can take up to 30 days.
Remember that refunds do not always have to be made through PayPal. While this is the recommended method, there may be times when you want to try something else. For example, if you have an ongoing relationship with the vendor, it may make sense to request a credit toward a future purchase.
If the seller refuses to refund your money or simply ignores you, you can file a dispute. A dispute remains between you and the seller, and you cannot file a dispute simply because you did not like the product. The product or service must be faulty or not as described.
If the dispute does not end in your favor, you can file a claim. PayPal enters the picture as a referee in a claim. They will request both parties’ perspectives before making a final decision.
The PayPal refund process can take up to 65 days in total. This assumes that the process progresses all the way to a claim, which is unlikely. When credit card refunds are factored in, the total refund time can be as much as three months.
How long does it take to get a PayPal refund?
- PayPal account balance: Same day.
- Bank account: Up to five days.
- Credit or debit card: Up to 30 days.
By default, refunds are paid from your existing PayPal account balance. If there is insufficient money in your account to cover the refund, the full amount will be issued from your linked bank account. According to PayPal’s refund policy, banks can take up to five days to process transactions, so this method can significantly slow the refund.
Is there a fee for a PayPal refund?
When you issue a refund, PayPal does not charge any additional fees. However, you will not be reimbursed for any processing fees you have already paid.
For example, suppose you need to refund a $100 online purchase. You would have received $96.52 for that transaction based on PayPal’s current fees for standard debit and credit payments. However, Paypal will deduct $100 from your account to make your customer whole, resulting in a loss of $3.48. To estimate the cost of a refund, use our PayPal fee calculator.
PayPal isn’t the only company that keeps fees from refunded transactions, but the practice isn’t widespread. Stripe keeps the fees as well, but Amazon Pay splits the difference, refunding the processing fee but not the authorization fee.
All of the costs and fees described above apply to voluntary refunds. Chargebacks (when a customer asks their credit card company to refund a disputed charge) are frequently associated with significant fees. PayPal, for example, charges a nonrefundable $20 fee for any chargeback that is not covered by its Seller Protection program.
What is the time limit for PayPal refunds?
Transactions marked “Completed,” “Pending,” or “Cleared” are refundable within 180 days of the transaction date. After 180 days, you can use PayPal’s standard Send Money function to send funds to a buyer in a new transaction. That transaction, however, would incur its own fee: 2.89% plus 49 cents.
This 180-day limit is stricter than that of some PayPal competitors. For example, Square allows refunds for up to a year, whereas Stripe does not have a refund time limit.
Is it possible to get a partial refund from PayPal?
You can issue a full or partial refund for most PayPal transactions. If the buyer used a coupon or gift certificate to make the original purchase, PayPal will only allow you to issue a full refund.
You could use the “Send Money” function to send a partial refund after the 180-day limit, but you would have to pay the fee.
How to Check the Status of Your Refund
So you’ve requested a refund and are now playing the waiting game. How can you tell if your vendor has made a decision?
To find out, log in to your PayPal account and select the “Activity” option from the top menu. If you have a large number of transactions, you might not notice the request right away. In that case, click “Filters” then “Refunds.” Except for refund requests, this will clear the list. You can further refine your search by selecting a date range.
When you click on the transaction, you’ll see the status. It will either say Pending, Refunded, Partial Refund, or Denied.
- Pending indicates that the vendor has approved the refund but that PayPal has not yet received the funds. This is most commonly due to the seller issuing an eCheck and PayPal waiting for it to clear.
- Refunded indicates that your refund has been issued by the seller. You should have received it by now!
- The phrase “partially refunded” indicates that the seller has approved and issued a partial refund. Again, you should have received it by now.
- Denied indicates that the refund has been denied by the seller. If you want to take this further, you must go through the dispute process.
Where Do PayPal Refunds Go?
Your payment method determines how refunds are processed.
Purchases made with a bank account or a PayPal balance are refunded to your PayPal account. If you paid with a bank account, you can return the funds to your bank. If you paid with a credit or debit card, the funds are simply credited to your account.
You’ll get a split refund if you split the purchase between a card and a PayPal/bank balance. The card portion will be credited to your account, while the PayPal or bank portion will be refunded to the card.
Where can I find out the status of my refund?
Tap the $ icon in the PayPal app, then tap Activity. Click the Activity tab on the website. Select Refunds from the Filters menu. This section will show you the status of your refund.
What does the status of my refund mean?
When you check your refund status on PayPal, you will see several options.
- Pending: The refund is still being processed by the bank or card provider.
- Refunded or partially refunded: The refund process has been completed by PayPal and the bank or card provider. The funds should be visible in your PayPal balance or card account.
- Temporary hold: When you cancel a payment, a transaction refund process begins before the initial payment clears the bank. Before issuing the refund, the bank will need three to five business days to clear the payment.
Will PayPal refund my money if I’m a victim of a scam?
If you are scammed or see unauthorized transactions, PayPal has several safeguards in place. A 180-day refund policy is available, as well as Purchase Protection to assist with disputed charges and Chargebacks if your debit or credit card has been charged.
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