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eBay Australia refunds from overseas sellers shortchanged via PayPal's currency conversion

My 19 year old son, who is on the Autism Spectrum, has a new obsession which involves trying to purchase old Lego City sets that are so old they’re hard to get. He gets me to sort it out for him, and when I do find the current set he’s trying to purchase, I get the money from him and then pay for it using my PayPal account.

The latest set he wanted to get was so old I could only find 2nd hand packs of it via eBay Australia. One of them stated that it included the original packaging and instruction booklets and had all the pieces. So we paid for it via PayPal, and PayPal converted it into US$ due to the fact that the seller resided in the USA.

Today, we got an unexpected refund with the seller stating to eBay that they didn’t have the set to send to us. Fair enough. They refunded in full at their end. Only problem with that though, is that the exchange rates have changed since we paid for the thing, and after PayPal had converted the amount back into Australian dollars we were out of pocket by about $6. So that’s $6 my son has parted with for nothing.

One would assume that if PayPal take $X amount of Australian dollars and then gives the seller $Y amount of US dollars, and then they get $Y amount of US dollars back as a full refund, then you’d get your original $X amount of Australian dollars refunded back as well. But no, they apply the exchange rates from the refund date instead of from the original date when the item was paid for.

It’s only $6, but still, that’s $6 we’ve had to part with for something that a full refund was given on by the seller. $6 for an item we will never receive. I’m going to have to make sure I don’t get anything from any overseas sellers on eBay Australia now, in case this happens again. Complete waste of money if they cancel the sale and the exchange rates mean we don’t get as much returned as we actually paid,

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That is the norm for any international transaction that is paid for and refunded in another currency regardless of credit card, paypal, or whatever. The ‘normalisation’ is the target currency, in your case the $USD. You paid $USD and you were refunded the same $USD. Because your own currency is $AUD you may lose or sometimes win depending which way the xrates go between purchase and refund.

The same applies to getting taxed on foreign financial transactions even if the money never crosses a border from one’s tax home. The $AUD value is the xrate on the day. I have US investments that if sold today would be moderate loses in the US, but for ATO purposes would be significant $AUD gains, all because of the xrate on the day as stipulated for computing P/L. It makes ‘accounting’ fun :cry:

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As @PhilT indicated, it’s swings and roundabouts… I buy stuff out of China, and sometimes the goods are faulty, or just don’t arrive. When I get a refund the amount I receive is almost always different due to the currency conversion between AUD$ & US$. In addition I have to pay an ‘international transaction’ fee to the bank to convert from AUD$ to US$, which of course isn’t returned with the refund. These are the costs we have to bear to buy goods internationally.

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Almost any currency conversion will cost money. The rates of conversion are not the “real” and current exchange rates. So already a loss of money.

I understand your frustration as you paid X amount in AU$s and so expect back X amount of AU$s but as @PhilT & @meltam have indicated this will never be the case. If the item had been bought here and no exchange rate had been involved you would rightly expect a full refund of the exact amount but the vagaries of international trading is a swinging feast or famine.

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Yes I agree it wasn’t Paypal who “kept” your $6, they paid the seller what you paid and then refunded you what the seller refunded. There were two issues here one was the exchange rate - and depending on how long ago this transaction happened our dollar has gone up a bit - and the other is the amount the banks charge for doing the transaction. Everyone who buys something from overseas needs to be aware of it and I am sure you will find that the item you purchased on ebay most likely said this is the approximate amount in Australian dollars. I don’t think this should put you off buying from overseas because what happened to you is relatively rare. If you buy something new it is almost always available and if you are looking at something second hand perhaps you should email the seller just to confirm that they still have it.

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I wouldn’t call it “rare”. Any international transaction is subject to exchange rate fluctuations. In your case it is super annoying, because you weren’t the one asking for a refund. But this is the only way international transactions can work. You just have to always check what currency you’re paying in, and weigh up whether it’s worth the risk paying in another currency, which is volatile by nature, if something goes wrong.

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Having an overseas purchase cancelled and money refunded is “rare” to me. I have purchased hundreds if not thousands of items from foreign sellers on ebay and can only think of one where the item was not available and the money was refunded.

Oh, I see what you mean. Yes, with reputable sellers it’s rare to have the issue of them being out of stock and having to refund. I thought you meant the exchange rate changing between transactions was rare.

I work in an international venue, and every time an event is cancelled we have this issue. People who booked from overseas for their holiday have to be refunded, and of course, we are refunding in Australian dollars so the amount invariably changes between transactions.

Generally speaking, it’s good to be aware when you are paying in a foreign currency that the AU$ amount you pay is not fixed. You may even come out with a profit if it happens again. But it is a greater risk than shopping in AU$.

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