[TriCon]

The charging of PayPal fees on top of the asking price? It's strictly forbidden in the PayPal terms of service agreement. It's annoying and a bad business practice. Personally I don't buy anything from a seller that is pawning off his fees on the buyer, but no matter what I think, its still against the TOS and a reportable issue. All the other forums I frequent have this spelled out and its widely accepted, however this forum is rife with people pushing their fees on buyers, why so?

No Surcharges. Under Visa, MasterCard, Discover and American Express 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"). You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment. 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).

[dgaies]

The charging of PayPal fees on top of the asking price? It's strictly forbidden in the PayPal terms of service agreement. It's annoying and a bad business practice. Personally I don't buy anything from a seller that is pawning off his fees on the buyer, but no matter what I think, its still against the TOS and a reportable issue. All the other forums I frequent have this spelled out and its widely accepted, however this forum is rife with people pushing their fees on buyers, why so?

I certainly can't speak for other sellers, but when I list an item my asking price is inclusive of any paypal fees I am going to have to pay. However, if someone wants to pay me cash or pay via a free personal transfer on paypal (non-credit card), which in turn saves me money, I have no problem passing that savings along to the buyer. You could argue that isthe essentially the same as charging a fee for using paypal, but in the eyes of the law it is not the same thing. For example, where I live it is not uncommon to see gas stations give customers cash discounts. They are technically not charging their customers a fee for using credit cards (which is typically illegal), but by offering a cash discount they are effectively doing that.

So here's my question to you. If seller #1 listed an item for $330 + $10 paypal fees vs seller #2 listed an item for $340 but then offered a cash discount of $10, would you have the same issue with both sellers?

[TriCon]

It sounds stupid, but I would buy from the seller that isnt charging more for PayPal, it's just a unscrupulous tactic in my book, and PayPals.

The problem isn't that someone includes the fee in the price, its that they charge one price for cash and one for PayPal. If you are offering your product and YOU want to have the convenience of using PayPal, then don't push the price of that convenience on someone else. Pay your dues and get the added benefits of PayPal like seller and buyer assurance.

[dgaies]

It sounds stupid, but I would buy from the seller that isnt charging more for PayPal, it's just a unscrupulous tactic in my book, and PayPals.

The problem isn't that someone includes the fee in the price, its that they charge one price for cash and one for PayPal. If you are offering your product and YOU want to have the convenience of using PayPal, then don't push the price of that convenience on someone else. Pay your dues and get the added benefits of PayPal like seller and buyer assurance.

So long as the seller is clear about the price (and what fees are or are no included), I personally don't care. I also don't feel it's an unscrupulous tactic to charge different prices. Is it fair for me to charge $12 shipping to Califoronia but only $8 to New York? Of course not because it costs me more to ship to California. I don't see the difference with Paypal. If it costs me an extra $10 for the buyer to use Paypal (a service which I would argue benefits the buyer at least as much as the seller), I don't see any issue charing more for that service as compared to a cash transaction. Or to keep it "legal", offer a cash discount if you choose not to use a PayPal transaction that require additional fees.

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Last edited by dgaies; 06-08-2010 at 11:26 AM. Reason: grammer edit

[aerodave]

Whether it's an individual or a business, the idea of credit card or PayPal fees as an extra cost is a fallacy. The only reason it's a common misconception is because the fees are direct and obvious. But people, as well as many business owners who try to pass along a fee for credit cards, fail to recognize that cash has its own costs which may actually outweigh the PP/CC fees. When you receive cash (typically in the form of a cashier's check or money order) you have to wait for the mail (a few days), and then get it to the bank. That all takes time. Personally, I place a value on my time that, while rather small, is still enough to make me not want to go through that. For businesses with substantial volume, the issue is even bigger. Having cash on hand is a liability...it can be stolen, or your drawer can end up short due to careless employees. Making daily deposits is time-consuming and a security risk. I know that when I worked retail, I never enjoyed going to the bank on a predictable schedule with thousands of dollars on me in an attention-getting bank bag.

The costs of dealing with cash are sometimes hidden, and not typically direct. But they are no less real than the 3% charged to you by Visa or PayPal. Most smart businesses and individuals have figured this one out, and don't bother alienating their customers with extra fees for convenient payment methods. When I list here on the Marketplace, I always include a line saying PayPal fees are included "because I wouldn't dream of charging a buyer for something that makes my life easier." Furthermore, I do not accept cash or check as payment...the hassle isn't worth it to me.

But even if you can't accept that there are costs to accepting cash, it's still in your best interest as a seller to simplify things by capturing the "extra" PayPal costs in your asking price. The fact that your price includes a little "overhead" is understood by sensible buyers, and need not be explained. When you do that, you'll retain the substantial portion of the potential buyers you would have alienated by asking for a fee. Then, if a buyer wants to pay cash and asks for a lower price because of it, you're free to negotiate that. Remember that all the buyer wants to know is what's the bottom line price to them...it's not worth it as a seller to complicate it or offend them with fees. That's why, when pracitcal, I try to list things inclusive of shipping charges. One more thing to simplify thigns for my buyers...because I know they only want the bottom line.

As for me as a buyer? In the situation above, if there were a Seller #3 who was selling the same item for $350 with no "cash discounts" or "PayPal fees extra", I'd buy it from him. Sure, it's $10 more than the other guys, but at least he's not a jerk.

[Gooshin]

there is a difference between charging extra for use of paypal vs transfering the paypal cost on to the buyer.

[Jasvox]

Theoretically, I can ask anything I want to for any item I choose to sell here or any place else, regardless of what I think about paypal and their philosophies. If I ask $350 for something plus shipping, I could have just as easily asked $325 or $375, I shouldn't owe paypal or anyone an explanation of how I came to my asking price.


Now, back to the rest of life...

Jason

[TriCon]

As for me as a buyer? In the situation above, if there were a Seller #3 who was selling the same item for $350 with no "cash discounts" or "PayPal fees extra", I'd buy it from him. Sure, it's $10 more than the other guys, but at least he's not a jerk.

^ exactly!
Let alone it's against the TOS. If you can't abide by the TOS then dont use the service.

[TriCon]

Theoretically, I can ask anything I want to for any item I choose to sell here or any place else, regardless of what I think about paypal and their philosophies. If I ask $350 for something plus shipping, I could have just as easily asked $325 or $375, I shouldn't owe paypal or anyone an explanation of how I came to my asking price.


Now, back to the rest of life...

Jason

You're missing the point, the problem is when you ask for $375 plus shipping for cash/etc. and $400 plus shipping for PayPal. That's not permissible according to PayPal's terms of service. if you want to use PayPal, then you abide by their rules, if you don't like it then don't use PayPal.

[dgaies]

^ exactly!
Let alone it's against the TOS. If you can't abide by the TOS then dont use the service.

Can you show me what part of the TOS prohibits me offering a discount to someone based on an alternative form of payment?

[RawheaD]

This is idiotic. Paypal benefits mostly the buyer, and very little the seller. Added convenience my ass. Who receives most benefit from using Paypal and an instantaneous money transaction? The buyer, because that means that the item will be shipped promptly (barring a seller with slow response time).

Whenever I list something here, I always list cash, check, money order, or basically ANY payment as acceptable.

However, I will not ship out the item until the money is cleared and in my hands. So, I don't care at all if it takes 3 days for the buyer's check to arrive in my mail box (the shipping for which the buyer pays), and then taking it to the bank in the next business day, then waiting another 3 days for it to clear before I ship out the item. In the mean time, the buyer is the one wishing everything clears so that the seller (me) would be able to ship out the item. Instant gratification benefits the buyer much more than the seller.


Then, let's talk about buyer/seller protection. Just what the hell does Paypal protect *me* the seller from? If there wasn't a middleman like Paypal between the buyer and the seller, the seller could potentially rip off the buyer, but there's no way that the buyer can rip off the seller. Paypal, arguably, levels the playing field, and actually tips the scale the other way. I'm not arguing that's a bad thing, but again, the benefit of using Paypal rests almost entirely with the buyer.

If this fairly standard practice of asking for a set price as "net amount to seller" is banned here, I will simply not accept Paypal payments any more, or, like someone suggested, set a price, but then offer *discounts* for face to face and other transactions that don't involve Paypal :-P

[pcarfan]

I like it the way it is...I wouldn't want it changed.

[TriCon]

Can you show me what part of the TOS prohibits me offering a discount to someone based on an alternative form of payment?

The Quote in my first post is from PayPal's terms of service, you can reword it however you want, but it boils down to charging anything aka surcharges, for using PayPal is against their terms of service and not allowed in any form.

Rawhead, you are looking at it too short sighted. The reason PayPal is so popular is because money gets to the seller so fast. Everyone i know would rather buy something from someone online with some protection, and knowing that it will get their instantly. I'm not sending a money order or cash to a stranger and hoping on good faith that they will send me what I think they are sending. AND if I dont like what they sent me then there is no recourse.

By offering PayPal you are offering the people that you are selling something to that protection indirectly. You are offering a convience to your buyers, and in turn are probably getting a lot more interest because those safeties are in place. YOU PAY FOR THIS. That's why PayPal doesnt allow you to charge anything for this service. You are benefiting from it.

Like I said before, dont use PayPal if you don't like their Terms of Service. It's simple, but don't use the service and break the terms just cause you think they are crap.

[Gooshin]

The Quote in my first post is from PayPal's terms of service, you can reword it however you want, but it boils down to charging anything aka surcharges, for using PayPal is against their terms of service and not allowed in any form.

Rawhead, you are looking at it too short sighted. The reason PayPal is so popular is because money gets to the seller so fast. Everyone i know would rather buy something from someone online with some protection, and knowing that it will get their instantly. I'm not sending a money order or cash to a stranger and hoping on good faith that they will send me what I think they are sending. AND if I dont like what they sent me then there is no recourse.

By offering PayPal you are offering the people that you are selling something to that protection indirectly. You are offering a convience to your buyers, and in turn are probably getting a lot more interest because those safeties are in place. YOU PAY FOR THIS. That's why PayPal doesnt allow you to charge anything for this service. You are benefiting from it.

Like I said before, dont use PayPal if you don't like their Terms of Service. It's simple, but don't use the service and break the terms just cause you think they are crap.

so how do you feel about asking extra for shipping?

[TriCon]

so how do you feel about asking extra for shipping?

It's such a simple issue, I don't get the confusion.

State law says its illegal to charge extra for using a Credit Card, therefore to use PayPal, and in PayPal's terms of service, you CANNOT charge extra to use the service.

Charge extra for shipping? You charge for shipping. It doesnt matter how you pay, the shipping is going to cost the same no matter what.

If you are trying to hide your PayPal fee in a shipping cost its exactly the same, and completely transparent.

If your lens, camera, tripod, etc. is up for sale for $375 + shipping. Then it is $375 + shipping if I pay you with PayPal, cash, credit, debit, blah blah blah.

I don't get why everyone thinks its ok to break the law (in most states, out of country I get it, you aren't breaking anything) and TOS (if you use PayPal, anywhere in the World) of paypal here. It's just weird to me.