PayPal refunds in Australia: Policy, steps, & how long they take

PayPal¹ offers peace of mind when shopping online with secure payments and a huge global reach. But what if things go wrong? What’s the PayPal refund policy, and how long does a PayPal refund take if you need to get your money back after a purchase?

This guide walks through the PayPal refunds process - for both buyers and sellers - so you know what to expect. We’ll also touch on an alternative for digital transfers overseas, which may let you save on fees - Wise.

PayPal’s refund policy in Australia

Under PayPal’s refund policy² in Australia, buyers have certain purchase protections which allow them to request a refund if they aren’t happy with an item they've bought.

As a buyer, you can open a dispute in the PayPal Resolution Center, which allows you to talk to the seller and ask for a refund. If the seller is not willing to honour your request, you can then escalate the dispute to a claim, which means that PayPal will step in to adjudicate.

The PayPal team will assess the issue, and if they find in your favour, you’ll be given your money back.

It’s helpful to know that the PayPal purchase protection policy doesn't apply to all purchase types³, and does have some strict timelines which you will need to adhere to. Some items, such as industrial machinery and motor vehicles, are not covered under this protection, so check out the cover offered for your specific purchase before you start a claim.

Read on to learn how to get a refund on PayPal if you’ve changed your mind about a purchase - or if an item you ordered didn't show up, arrived with faults, or is significantly different from how it was described.

Refund process for PayPal

Before you escalate any issue about a PayPal purchase, you’re asked to contact the seller and ask for your money back.

This gives you the chance to explain the issue and then for you and the seller to work together to resolve the problem without getting PayPal involved. If an item has not arrived, for example, the seller might be able to resend it to fulfil the order, rather than issuing a refund immediately.

Because online sellers rely on customer feedback, you are likely to find that this informal approach works in many cases. However, if the seller won’t return your money and you think you have a right to a refund, you can then escalate the issue to PayPal via the PayPal Resolution Center.

How to request a refund from PayPal

Let’s look at how to request a refund from PayPal as a buyer.

The first step is to get in touch with the seller directly to explain the issue you’ve experienced and ask for your money back. You can get the seller’s contact details by logging into your PayPal account and looking for the payment in question on the Activity page⁴.

Where the seller agrees to honour your request and issue a refund, they’ll send back the payment to the method used in the first place - usually your bank, card, or PayPal balance.

If you can’t resolve the issue with the seller this way, you will need to log into your PayPal account and then open a dispute in the Resolution Centre. Here you can log the issue and then message the seller again using the formal PayPal channels.

PayPal offers the option to escalate the dispute to a claim if the seller does not offer you a refund. In this case, you need to move the case on to a claim within 20 days, so the PayPal team can look at the situation and investigate. If PayPal finds in your favour, you’ll receive a refund via the original payment method.

You can track the progress of a claim in your PayPal Resolution Center - just log in to get status updates and follow the timeline.

How to refund on PayPal

If you are a PayPal merchant and need to issue a refund to a customer, you can do so by logging into your PayPal merchant account and entering the payment details.

Here's how to refund on PayPal⁵:

1. Log into your PayPal account and go to Activity.
2. Select the transaction and click Issue a refund.
3. Enter the amount to refund and then Continue.
4. Check it over and tap Issue Refund.

This process allows you to offer a full or partial refund - for example, if a customer bought more than one item but only needs a refund on one of the items you shipped.

How long does a PayPal refund take?

If you’re waiting on a PayPal refund, the time it takes to get your money back depends on the payment method used. Usually, the PayPal refund timings look like this:

PayPal refund fees

If you get a refund from PayPal, the seller will return the amount you paid, or the agreed amount in the case of a partial refund, to the payment method you used. If you paid in AUD and the refund is passed back in AUD, the amount should be the same as you paid in the first place. However, if there was any currency conversion included or required, the amount you get back may not be the same as the amount you paid.

This is because of a couple of factors. Firstly, exchange rates change frequently, and the rate used to process your refunds may not be the same as the rate used on the day of your payment.

Secondly, if you get a refund any later than 1 day after making the purchase, the PayPal currency conversion fee of 4% will also apply. This might mean you pay a 4% fee to convert your money from AUD to the currency needed to make the payment, and then you pay the 4% fee again when the refund is converted back to AUD. All in all, this might mean you get back less than you expected.

If you’re a PayPal merchant, there’s no PayPal fee to issue a refund. However, PayPal will not return to you the commercial transaction fees you paid when you received the payment in the first place⁸, which again may mean you end up with less in the end after the refund.

Alternative for your online payments: Use Wise for low fee transfers

Wise is an easy way to save up to 3x when sending money overseas. You can make extra secure transfers to 140+ countries, which are easy to set up with no physical paperwork and completed usually in seconds.

With low, transparent pricing and the mid-market exchange rate for all your currency conversions for your foreign transfers, you'll usually get the best value for your money. Wise lets you see exactly what you're paying for a transfer, and what the recipient will get, with no hidden fees.

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When it comes to international transfers, Wise makes things easier and cheaper.

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1. PayPal Australia
2. PayPal Terms and Conditions
3. PayPal FAQ - purchase protection
4. PayPal Help - how to get a refund
5. PayPal FAQ - how to issue a refund
6. PayPal FAQ - where is my refund?
7. PayPal consumer fees
8. PayPal merchant fees