Should I offer PayPal as a payment option for my store?


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Hi! I’ve been getting a lot of requests from potential customers to offer PayPal on our store. I’ve been hesitant to add it because I’ve seen PayPal hold onto funds, particularly subscription merchants, for a long time.  Has this been the case for you?  I’d love any and all feedback around offering PayPal as a payment option.  Thanks in advance! 

Christian M 23 days ago

Hey hey @ediegem  wonderful insight here, thanks for sharing! 

In regards to issue #1 with PayPal, completely valid scenario any merchant may come across - Since this is a PayPal feature, Recharge’s hands are tied in terms of preventing this type of customer action overall. That being said, that ‘cancellation’ button isn’t a cancellation button in the traditional sense, it really only revokes those pre-authorized agreements for the payment method itself. At that point, the customer really has two options, either cancelling the subscription within their customer portal directly or if they intended to replace their payment method, updating that in their customer portal as well. 

Depending on the settings found in Payment > Failed charges:

I could certainly see subscriptions sitting in this dunning process for quite some time when, ultimately, the subscription was meant to be cancelled by the customer. One potential solution I can think of for this would be to adjust your ‘Failed charges’ settings to decrease the time given to adjust the failed charge, the con for that is that it would obviously apply to all failed charges. Another thought is targeting these specific customers w/ these charge errors manually, via an external notification, and confirming with them that they’d like to cancel their subscription or if they were intending on simply cancelling their recurring payment method as the verbiage from PayPal can be confusing:

Ultimately, if you’ve seen this charge error enough where you feel you know customers intentions are an attempt to cancel their subscription, you can certainly do so manually to prevent Churnbuster from pursuing them further. It’s an interesting situation that can arise, because we’ve seen both scenarios here - A. Customers want to cancel their subscription and feel that the option within PayPal does just that B. Customers actually want to remove that recurring payment method but have failed to replace it (until they receive a reminder to do so). In this case, I actually don’t mind Churnbuster sending notification after notification to the customer, because it reminds the customer that the subscription remains active (while dunning) and that they have the opportunity to update their payment method – if they do not respond, they either have already unsubscribed to those emails anyway (lol) or it’s an indication that they intended to cancel. The question I also have, that I have raised internally with the team, is if there is something we can do about the actual cancellation reason itself. Something along the lines of ‘Cancellation reason > Other > PayPal revoked’, even if it sits there and auto cancels after a complete dunning cycle. 

What are your thoughts on this? Should the default behavior be to cancel subscriptions with this charge error instantly > send out a ‘subscription canceled’ notification? Or should the order continue to remain in dunning until it reaches the max retry attempts and cancels automatically, giving the customer time to update their payment method? It’s tough, because we’re assuming customer intent here, a very unique scenario to find yourself in for sure.

Oh boy, apologies for the extra long response there folks! I’d love to hear your thoughts though! 😊
 

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Userlevel 4
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Hi @Jessica_P! We went to market with PayPal being a payment option and have not really run into any issues with holds on payments. I believe setting it up correctly is key so PayPal has proper confirmation of shipment information on the fulfillment side. I always want to acquire customers in whatever way makes the most sense for them 👍 but prefacing I might be biased as a marketer who would rather get more customers and leave it to the operations team to sort out fund holds :)

Userlevel 3
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We have Paypal setup as well. Works great and helped us increase CRV :) Highly recommend. 

Userlevel 5
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@Erica.Berthold @Steve Thank you for your insight on this! @Jessica_P in case you’d like some more information regarding connecting PayPal and how the checkout integration works, here is a help article that dives into Braintree (PayPal’s subsidiary company) as well as some FAQ’s 😀

Userlevel 2
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We offer paypal and we have a lot of people who use it, but we have run into a lot of issues:

  1. The biggest one is that customers who subscribe and use paypal for their subscription payment have the ability to cancel their subscription within paypal directly without ever cancelling within Recharge. What happens in this case is that Recharge goes to charge that customer for their next order (whenever that is queued for) and then the payment fails with the reason “Buyer_Canceled_Payment_Method” and it looks like a card error. Then churnbuster picks it up thinking it’s passive churn and tries to get the customer to update their payment method. Eventually if they don’t take any action, their subscription is cancelled by churnbuster. There are obviously a lot of problems with this:
    1. Customer can cancel outside of Recharge
    2. Customer looks like an active subscriber within Recharge for long after they have cancelled within Paypal
    3. Customer gets bombarded by Churnbuster to update their card info when they don’t actually have a card issue
    4. Cancellation reason within recharge looks like passive churn/churnbuster instead of Paypal
  2. Make sure to turn off the ability to pay with an “eCheck” - we learned this the hard way and basically orders came through that got shipped and later the “eCheck” payment failed so basically an order went out before we received the payment for it.

Happy to answer any questions and would love if someone has a solution to #1 above!

Userlevel 3

Hey hey @ediegem  wonderful insight here, thanks for sharing! 

In regards to issue #1 with PayPal, completely valid scenario any merchant may come across - Since this is a PayPal feature, Recharge’s hands are tied in terms of preventing this type of customer action overall. That being said, that ‘cancellation’ button isn’t a cancellation button in the traditional sense, it really only revokes those pre-authorized agreements for the payment method itself. At that point, the customer really has two options, either cancelling the subscription within their customer portal directly or if they intended to replace their payment method, updating that in their customer portal as well. 

Depending on the settings found in Payment > Failed charges:

I could certainly see subscriptions sitting in this dunning process for quite some time when, ultimately, the subscription was meant to be cancelled by the customer. One potential solution I can think of for this would be to adjust your ‘Failed charges’ settings to decrease the time given to adjust the failed charge, the con for that is that it would obviously apply to all failed charges. Another thought is targeting these specific customers w/ these charge errors manually, via an external notification, and confirming with them that they’d like to cancel their subscription or if they were intending on simply cancelling their recurring payment method as the verbiage from PayPal can be confusing:

Ultimately, if you’ve seen this charge error enough where you feel you know customers intentions are an attempt to cancel their subscription, you can certainly do so manually to prevent Churnbuster from pursuing them further. It’s an interesting situation that can arise, because we’ve seen both scenarios here - A. Customers want to cancel their subscription and feel that the option within PayPal does just that B. Customers actually want to remove that recurring payment method but have failed to replace it (until they receive a reminder to do so). In this case, I actually don’t mind Churnbuster sending notification after notification to the customer, because it reminds the customer that the subscription remains active (while dunning) and that they have the opportunity to update their payment method – if they do not respond, they either have already unsubscribed to those emails anyway (lol) or it’s an indication that they intended to cancel. The question I also have, that I have raised internally with the team, is if there is something we can do about the actual cancellation reason itself. Something along the lines of ‘Cancellation reason > Other > PayPal revoked’, even if it sits there and auto cancels after a complete dunning cycle. 

What are your thoughts on this? Should the default behavior be to cancel subscriptions with this charge error instantly > send out a ‘subscription canceled’ notification? Or should the order continue to remain in dunning until it reaches the max retry attempts and cancels automatically, giving the customer time to update their payment method? It’s tough, because we’re assuming customer intent here, a very unique scenario to find yourself in for sure.

Oh boy, apologies for the extra long response there folks! I’d love to hear your thoughts though! 😊
 

Userlevel 1

hey @Christian M 

 

awesome reply - appreciate the extra long response.

 

wanted to comment on the last portion…

 

the default behavior imo should be to send out a ‘subscription cancelled’ notification when a customer cancels the billing agreement directly in PayPal…

 

reason being is that while i understand your point about that potentially being an attempt by the customer to update their payment method, i think this would be a rare exception (based off my own intuition - do not have the data to support) …

 

one way to answer this for ReCharge customers in general  would be querying a sample set of subs that have had a PayPal dunning issue in the past due to revoking the agreement, and seeing the percent that had the dunning issue resolved and stayed active/ were re-activated…

 

if ~95% never reactivate for example, then it’d be safe to say with absolute certainty that the default should be a cancellation notification

 

if say ~40% do reactivate though - that’s telling that a decent portion of people are in fact trying to update their payment info. 

Userlevel 3

Love it! @EmersonEmersonEmerson

Brilliant response - completely understand what you’re saying and I feel as though this is definitely worth raising in our internal discussions we can have on this subject matter re: handling revoked PayPal agreements. Appreciate you taking the time to respond with your thoughts 😊

Userlevel 2
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Yes I 100% agree with @EmersonEmersonEmerson here. I do think that most if not all of the people in this boat are trying to cancel but would be interesting to see if any end up re-activating later. 

I would also love the change in cancellation reason to reflect that it is paypal and not just a charge error. 

I know that Churnbuster has reached out to the Recharge team to discuss how to handle this as well. 

@Christian M let us know if you want to discuss further!

Userlevel 3

@ediegem Perfect! 👌 Thanks for sharing your thoughts on this with me. 😊

Userlevel 5
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@Christian M Thank you so much for providing some further clarification on this! @EmersonEmersonEmerson and @ediegem your insight is so valuable here. I appreciate you both sharing your experiences! This is what helps our Community thrive 😄

Userlevel 1

@ediegem  I think we have a Churn Buster fix for this, to improve the customer experience when PayPal customers revoke payment on their subscriptions.

When this error type is detected, we can insert messaging into emails that will let the customer know they need to take action to cancel the subscription (reply to the email, or log into their account in Recharge). OR update their card to keep the subscription active, of course.

The other option would be to segment based on this error type, not send any email to these customers, and cancel subscriptions after a day or two. Maybe not the best solution based on what the discussion here has revealed, but it is an option.

We can look at other fixes in the future, if the problem continues and we have the data to understand it better.

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