Advice: PayPal Fees on Refunds

[zzyzx.livejournal.com]

Greetings,

I had a commission which I originally paid for on 2012-06-30. The artist has decided to refund my money rather than finish the commission at this point.  This was her decision and not mine. However, the way the refund is being sent, since it's too late to issue it as a refund through PayPal, I'm being charged £1.57 in PayPal fees if I accept it because she's sending it as a regular transfer. I feel like the artist should be responsible for the fees, since she decided on the refund. If I gave her £35, I feel I should be receiving £35 in return, either with her sending it as a gift (I'm not sure how this transaction should be handled, because it's definitely not for goods or services, but it's not exactly a gift, either...) or with her using a calculator to figure out what the fees are in order to cover them.

I'm actually losing even more because of PayPal converting from USD to GBP and then back again. I originally paid $56.29, but if I accept this, I'm only getting $51.92 from PayPal. I've told her I don't expect her to cover the currency conversion, but that I do think she should cover the PayPal transaction fees.

At this point, I'm expecting her to cover the fees, but not the currency conversion.  Since I paid her £35, I think I should get £35 back.  Her prices are in GBP, so I understand taking the loss on currency conversion.

What would you expect?  Would you cover the fees or expect the artist to cover the fees?  Should I ask for the funds in USD rather than GBP?

Thanks for your input!

Edit:
First of all, I want to make it clear that the artist wasn't difficult to deal with, and that I wasn't intending to post a beware at any point on this.  Second, since I've never dealt with a refund from an artist before, initiated from either end, it was something new for me, and sometimes with anxiety things seem like a bigger deal than they are, but I was also genuinely curious how this should be handled, especially since with larger amounts it could definitely add up.  Then again, I've seen bewares posted for art that's cost less than $3, so I suppose I'm not sure at what point it matters and what point it doesn't.  I certainly don't mean to seem petty or anything, but it mostly that it was a new situation and I wasn't sure how to handle it.  I didn't mean to give the impression that it was a long fight with the artist over it, just more me asking what I should ask for in this situation.

Anyway, in the end, the artist resent it as a gift, so there weren't any fees, so all is well.  I appreciate the input!

Edit 2:
I just want to make it abundently clear that I am in no way upset with the artist or trying to say she was difficult to deal with.  I had never handled a refund before, so I was seeking advice on what I should expect.  Thanks again for all the insightful answers.

Comments

[kattotang.livejournal.com]

That's a good point, and I get it, but I'm more interested in understanding this particular artist's reasoning, I guess? If the artist in question is running an actual business, then that's a thing to consider. There's a possibility that commissions might just be a little extra side income that they don't claim on their taxes. (I also wonder how the whole tax thing works after more than 2 years...taxes are such a pain.) Either way, I don't think it matters too much, because what I'm thinking is that the OP shouldn't be left in the dark on the matter--regardless of the reason for it, the artist should be explaining to the OP why. That's my point of contention here, I guess.

[zzyzx.livejournal.com]

Well, how you classify a payment on PayPal has no bearing on how you have to claim it on your taxes. You can claim it as whatever you want, really. If that were true and she sent it as payment for services/goods, then I'd have to file it with my taxes as income. Can always make a note in the comments or whatever that it's a refund so when you're reviewing at tax time, you know exactly what it was for.

[kattotang.livejournal.com]

Actually, it does have a bearing on how you claim it on taxes. You don't claim money you've spent on non-business things on your taxes, nor do you claim money you give to individual people as a gift, but you do claim money spent on the business as a loss. And you're only half right about your own taxes. If you had a business and you used Paypal for it and someone sent you a payment for "goods/services", then you'd have to claim it. But, if you don't have a business like that, it's not a big deal if you don't claim that income. The IRS doesn't really care about people selling their old Pokemon cards for $10 on eBay, or people making $50 at a yard sale. Likewise, they wouldn't care about you making a small amount of money on some one-off thing.

There's also the fact that she lives in a different country from you. You never know how taxes work for other people. Taxes are, after all, ridiculously complicated.

[zzyzx.livejournal.com]

Taxes aren't based on how PayPal classifies their transactions, though. It's all based on how you claim the transactions on your filings to the IRS.

[kattotang.livejournal.com]

You can't just file random stuff on your taxes. You have to show proof of your earnings. If you run a business through Paypal, you're pretty much going to be showing them your business transactions on Paypal. Trying to claim things sent as a gift would amount to fraud.