PayPal Fees

Yes, and many don't accept paypal at all because of the cost and the chargebacks. I do accept paypal and figure the possible charge in the item beginning price. The buyer pays for paypal, no matter, in most cases, whether it be hidden or upfront. However, as a seller, I would not dangle it in front of the prospective customer as I , on the seller's end, would find it a turnoff!

rsmiller40

(Just for more information, PayPal charges 2.9% + .30 to receive a payment from a buyer.)

-bjt

I suppose they are tacking on final charge from ebay also, huh? I also dislike handling charge...sales tax..any of that. Or, we will notify you of the shipping at the close. ( That says, if it doesn't bring enough, we'll stick it to you.)

rsmiller40

I'm not sure what to think of a seller who is charging 4-5% to buyers to use PayPal when they are only being charged 2.9%.

I don't have a problem building it into the cost of an item (overhead), but to almost double the fees seems a bit greedy.

-bjt

I think that what I would do is avoid these auctions at all cost...they'll get the message. I just refuse to bid on anything with extra costs stated or shipping not stated one way or another.

rsmiller40

I agree, rsmiller40, I dislike a seller that charges "handling fees" or state tax. I am always suspicious of a seller who charges these fees, as I am not convinced that they are declaring this income to the IRS.

I have even had dealers at an open air Flea Market charge me sale tax.

Yep, I agree on the auction tax. Who knows what is actually sent in to the state. In some states, it is a law to charge sales tax at a flee market, open air or not, and the owner cannot rent you a space without a tax #. Speaking of which, have you ever thought how many times and how much money is collected in tax on the average car before it hits the junk yard? It often is more than the original cost of the car!

rsmiller40

I know that the State of Maryland requires all vendors in any arena, including the Internet, to have a valid State sales tax license and to collect MD's 5% sales tax on all sales to MD residents. They do enforce this, and violators are subject to heavy fines and even jail time. A good friend of mine is an eBay Powerseller based in MD, and he collects sales tax from every buyer who gives a Maryland shipping address. (Sends it in, too.)

I don't have a problem with legitimate fees, but again, I have to ask the group about PayPal fees. I am curious as to what you think about sellers adding in an inflated charge to cover their PayPal fees.

-bjt

First, I wouldn't consider it an "inflated charge". It's an expense to the seller, and buyers usually end up paying for those costs. The seller needs to cover expenses and make "at least" a reasonable profit or they will be non-sellers.

quote:

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Originally posted by bjt:
I am curious as to what you think about sellers adding in an inflated charge to cover their PayPal fees.

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I have no problem with it. If I don't like a seller's terms, I won't buy from them. If other buyers don't like a seller's terms, the seller will make less money, go out of business, or figure out they need to make a change. On the other hand, if charging fees causes a seller to be more profitable then non-charging sellers, then the charging seller will be "rewarded" and others will soon follow. I'm fairly keen on letting the market place control things.

Some sellers don't take Paypal. It appears more do since ebay bought Paypal. Unless an item is a must have, I won't "go for it" unless they take Paypal. It's usually not worth the hassle to get a money order. I had an auction close a couple of days ago for something I would have been willing to pay the Paypal fees, but since they didn't take Paypal, I didn't bid. From now on, I'm going ask those sellers if I can. Thanks - good idea.

P.S. If bjt are your initials, have you ever wished you had an "l" instead of a "j"?

Rick, I think the complaint was that they charge twice the paypal fee to the consumer, but as I explained, the final fee is about what paypal charges and i am sure they are figuring that in also.

rsmiller40

I agree with Rick. From what I can see, sellers are the ones who are hard-hit from every angle by fees...listing fees, extra if you want a photo, extra if you want boldface print, etc., then PayPal fees, taxes -- geez! And it's like every other business; the overhead is passed along to the long-suffering customers. So, if I'm gonna have to pay their overhead sellers had better cater to my preferences, of which PayPal is one.

P.S.: if bjt's middle initial changes to "l" he'd better avoid the Mayo Clinic, eh?

quote:

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Originally posted by Steve:
if bjt's middle initial changes to "l" he'd better avoid the Mayo Clinic

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You got me on that one?


GOT IT. WAY TO PUNNING FOR THIS EARLY IN THE MORNING!

quote:

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Originally posted by rsmiller40:
I think the complaint was that they charge twice the paypal fee

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Then I stand corrected. It is an "inflated fee", but everything else I said still applies. I have the choice to pay it or not. And one person's "fee", is another person's "profit" and another person's "expense". It's not uncommon to "mark up" costs. In fact, if a business didn't they wouldn't make any money.

The person that pays it, doesn't think it's inflated. The person that doesn't pay it, does think it's inflated.

There is certainly truth in that. I have no argument with it at all. It is not the way I would or do do it. Instead of stating to the buyer that they pay these fees, I think it is better to average my costs and include it in my starting price. I also average my shipping costs because most people prefer to know in advance all costs. One way is not any sounder than another, but is a "softer appeal" to the consumer. I was in business for 45 years before retiring and experience has been a good and sometimes bitter teacher.

rsmiller40

Charging the buyer for the Paypal fees is completely and expressly against your Paypal agreement and goes against certain banking laws. Paypal can and will cancel your account if you are caught doing that.

I have dealt will a seller's attempts to pass on Paypal cost to me in the past -- when they didn't state them in terms of the auction. I simply have refused to pay the extra charges and included a copy of the pertainent part of the Paypal agreement with my payment. I then reported them to Paypal.

Here is the specific policy from Paypal adressing payment surcharges:


Payment Surcharges

Notice Date: March 25, 2001
Effective Date: March 31, 2001
Under Visa and MasterCard regulations and the laws of several states, including California, merchants may not charge a fee to the buyer for accepting credit card payments (often called a "surcharge"). In order to comply with these laws and regulations, PayPal has amended its User Agreement so that, effective March 31, customers may not charge a fee for accepting PayPal. This restriction does not prevent you from imposing a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge (in other words, the handling fee for transactions paid through PayPal may not be higher than the handling fee for transactions paid through other payment methods).



As you can see, it is very much against Paypal policy and actually against the law in many states to charge your buyer for paying by Paypal. If the cost for the buyer is $50.00 if they pay by cash, check or money order, then it better by no more than $50.00 if they pay you by Paypal!

Very interesting. Thanks for the info.

rsmiller40

Yes, you are correct. I went on the site and read it. This does apply to the US sales and buyers only as I read it. Glad I haven't done business in this manner!

rsmiller40

Payment: Surcharges Sellers may not charge eBay buyers an additional fee for their use of ordinary forms of payment, including acceptance of checks, money orders, electronic transfers or credit cards. Such costs should be built into the price of the item-this policy reduces the potential for confusion among bidders about the true cost of an item. Further, some forms of payment surcharges, such as credit card surcharges, are forbidden under the laws of many states, including California.Can a seller add a surcharge to the final price of an eBay item? Yes, in three instances:· Sellers may charge a reasonable shipping and handling fee to the final price of their item, providing that this fee is disclosed in the listing. A shipping and handling fee can cover the seller's reasonable costs for mailing, packaging and handling the item. Shipping and handling fees cannot be listed as a percentage of the final sale price. · Sellers may pass along the costs associated with using a third party escrow service, if the buyer chooses to use an escrow service. · Sellers may choose to accept payment in a different currency than the currency listed on eBay. If the buyer chooses to take advantage of this optional payment method, the seller may pass along to the buyer any costs associated with the currency exchange, provided that the costs are disclosed and agreed to in advance by the buyer. Note: Some types of payment surcharges are permitted on some of eBay's international sites.

You may read about it at [URL=http://pages.ebay.com/help/policies/listing-surcharges.html ]eBay's surcharge page--click here[/URL]

Cool! Thanks Chatter!
This is blt...er I mean bjt

This conversation is interesting and informative.
I feel that any seller has a right to build in the cost of doing business into the cost of the item, but according to the info we've uncovered, sellers shouldn't call it a surcharge or they could be doing something illegal.
It's a tough situation for the seller. As was mentioned earlier, there are so many fees that the seller is responsible for that it is tempting to try to recoup some of those costs, but to be honest, all things being equal, how many of us buyers would bid on an item that had a "handling fee" or other additional fee attached - even if it was legitimate?
Very competitive, I think.

-blt on toast

I think the seller should build these fees into his starting bid on the item, rather than trying to levy them separately, which clearly is not allowed.

Am I correct in my understanding that sellers are not charged a PayPal fee to receive balance transfers from bank accounts, whereas they are charged for PayPal credit card orders?

No, the charge is the same for me no matter how the person pays through paypal.

rsmiller40

bjt,you are right. I sure won't bid on an auction that states it adds charges like that. I guess it is mind over matter. I add the wholesale cost of the item and any costs that would be incured if it sold at the min. bid and that is where I get my starting point for an item. After that, any fees that increase with the bids is just deducted from the profit. I also figure my shipping that way, including the average shipping and cost of materal.It all seems to work for me and although I was not totally aware of the paypal ruling, it keeps me legal with them.

rsmiller40