It is safe to say that 2020 has been a challenging year for nearly everyone. Businesses have been hit particularly hard as the Coronavirus pandemic has resulted in quarantine orders around the world – leading to first a supply chain disruption then to stores closing around the globe – and in some cases, closing permanently. This means the upcoming holiday shopping season is more important than ever for businesses that have reopened and possibly struggling to keep their doors open.
For these businesses to reopen, for consumers to shop in-store, there is an implicit contract between business and consumer centered around trust. This holiday season, that contract includes businesses keeping their consumers safe with personal protective equipment (PPE) when they shop in store. PayPal is built on trust. It is our foundation – allowing consumers to feel more confident that a merchant will honor the transaction, and where merchants can serve a greater cross section of consumers. This helps both sides of the transaction know that PayPal’s global expertise protects them. To ensure our merchants rest assured that we will continue to enable the trust dynamic between consumers and businesses, PayPal is making changes to our merchant policies, encouraging merchants to engage with consumers in a direct and proactive manner to resolve disputes, consistent with PayPal’s merchant policies and best practices. PayPal strongly believes that when merchants engage with consumers directly to resolve disputes, we build a more vibrant ecosystem where the positive actions by merchants builds deeper consumer trust.
These updates replace chargeback fees with a dispute fee for transactions that are processed either through a buyer’s PayPal account or through a PayPal guest checkout. This change will mean that for merchants who proactively resolve disputes with consumers, the typical fee on eligible incidents will drop from approximately $20 to $15*.
For merchants who have historically relied on PayPal to solve disputes and not engaged directly with their consumers to resolve disputes, there may be an increase in fees. Most merchants, and especially those who already take proactive actions with consumers to resolve disputes, will see a meaningful decline in the fees they are charged. This new dispute resolution policy reinforces PayPal’s commitment to create stronger consumer trust and confidence across the PayPal ecosystem that benefits all merchants and all consumers.
PayPal is committed to ensuring that merchants benefit from the strong consumer trends to embrace digital commerce, especially as the critical 2020 holiday period begins. The dispute fee changes take effect November 9th, 2020 in the US (date varies by market), and will benefit merchants by encouraging the adoption of best practices to build consumer trust and ensure an amazing 2020 holiday.
*The Dispute fee applies to global merchants. The fee amount varies in other markets.