PayPal fees...

[Austin Bob]

This is an interesting topic. On one hand, if I walk into a store and buy a widget for $20, I can pull out hard cash, a credit card, or a check. Most merchants will accept any of the above, even though they have fees involved with credit cards, and some checks will turn out to be worthless (although modern check handling procedures is making that a thing of the past). Still, the merchant has to pay for the machines that scan the checks, service fees, etc. So, not all forms of payment are equal, but the merchant figures that into the equation when they set the overall markup on items.

On the other hand, if I order the widget online, no one thinks it is a scam if they have to pay shipping costs. It is an added cost to the seller, and it is passed on to the buyer. Those sites that offer "free shipping" figure this into the equation as well.

PayPal is really just another form of payment, and they offer the buyer a easy and secure way to pay, with protection to the seller as well. Their Terms of Service require that the 3% fee not be added on to the price of the item.

I can see both sides of the argument, but to me it all boils down to the sellers choice. They can either accept PayPal, or not. It's up to them, but if they do, then they should abide by the terms and not add the 3%.

Personally, I avoid sellers who try to skirt the rules. If they are dishonest about that, then I don't trust their character. Just my opinion.

[Paul Busman]

So the purpose of the OP is to Police paypal rules?

No-- I was just pointing it out to sellers who may not have realized what the policy is. I haven't heard of PayPal penalizing anyone who violates the rule, but they have the right to do so. Sellers-- do what you feel comfortable with. Buyers- make your own choice.

Skirting the rules...hmmm. I have to think on that a bit. For international purchases I don't even mention it to customers. PayPal is the only way I've found to do international transactions without really ridiculous bank charges. They even do the currency exchange so it's well worth the PayPal fee.
As I said, for domestic transactions I've just pointed out to customers that I'd just as soon keep the PayPal fee by accepting a check but have never asked anyone to add it to their purchase price, nor have I declined to accept the PayPal payment. Some have added the couple of bucks, others haven't and that's OK. I don't consider myself dishonest in pointing this out to a customer, and I'd hate to be labeled as dishonest here or anywhere else. The PayPal fee isn't going to make or break me either way. It's a point of view I hadn't considered.

[Canoedad]

Paypal is simply adopting the long-standing Visa and Mastercard rule (put in place since their inception) that merchants may not discriminate in any way against payments made with their product. That includes charging extra to use the card or requiring a minimum purchase to use their card. Discriminating against card purchases can get a merchant's card services agreement revoked. Paypal, like BankAmericard (Visa) and Mastercard and Amex want to make their payment system completely ubiquitous to the consumer and as good as cash.

If a merchant is violating Paypal's terms of service, they should probably reconsider. Right now there is a very nice mandolin for sale in the classifieds, by a music store, that wants to charge list price for the mando, plus credit card or Paypal fees, plus, shipping, plus insurance. No wonder the instrument has been re-listed for the second time. If someone alerted Paypal/Visa/Mastercard about the upcharge for using their products, I'm certain the merchant would get a very stern warning.

As for an individual seller charging extra for Paypal, meh. It puts me off as a buyer. But beyond that, who here has never exceeded the speed limit?

[PH-Mando]

I have never used ebay or paypal. Guess that makes me a dinosaur. I have purchased several instruments over the years the old fashioned way: contacted the buider or seller and we agree to the terms - no middleman and no paypal. My check is good. Both parties were happy. Unfortunately, you can miss out on some good deals on ebay, but I am content with what I have. Just my opinion.

[nickster60]

Years ago there was a guy who wanted to make a few bucks being people to the airport. Being in a Florida at the time there was the potential for this retiree to make some money. He posted a ad in the Condo that said the following
Transportation to the airport
Ride 15.00
Toll 1.00
Water 1.00
Gas 3.00

He didn't get much interest, he expressed his dismay of the lack of interest. Being self employed formany years it was easy to see the problem, it is pretty obvious. I said why don't you just charge $19.95 per person and give a discount for multiple passenger. Throw in the water for free, customers like free stuff.He was convinced he would lose money. He reluctantly gave it a shot, he was pretty busy that winter.
Being cheap doesn't really save in the long run.

[mandowilli]

When selling as a private individual I set a list price, have my target price, and then set the lowest price that I would take for the item.
Negotiations begin and shipping, payment, return policy etc are all discussed at which time I factor in all of this to determine my final price.

If I accept Paypal I have not violated their terms of service.

Also, Paypal does benefit the seller in that many of its users are making impulse purchases with their account tied to a credit card.

[Jeff Mando]

Not to change to subject, but a related pet peeve I have is with seller's charging $75 shipping on a mandolin. Not so much here on the Classifieds, but getting more common on eBay, and a disturbing trend, I must say. Actual cost by USPS is going to be $25-40 domestic, FedEx Ground about the same. $75 to me is a dealbreaker and I go elsewhere. It also shows me the seller is OK with gouging on the shipping or else has never shipped a mandolin before.....

I should add that I also see mandolins for sale on eBay with $14.30 shipping, usually from sellers who mostly sell antiques and flea market stuff. In that case, I also wonder if it is going to be packed properly and arrive safely.

[Josh Levine]

If you get a multi thousand dollar instrument and factor in insurance you can go well over $75 and it isn't a matter of gouging but rather of protecting something fragile.

I am not a merchant but buy and sell some mandolins for hobby and for the quest for "the one". I feel like if I sell one I price it fairly and transparently and if people don't want to buy it because of the pricing structure (whether I do a all included price or whether we add on shipping and fees) then that is their choice and it is fine with me. As long as everything is disclosed I don't see how one is me being "cheaper" than the other. In fact if I am adding it all together in the ad it will likely be more expensive as I want a buffer to make sure that the shipping factored in can get anywhere in the country.

[Eddie Sheehy]

O

Not to change to subject, but a related pet peeve I have is with seller's charging $75 shipping on a mandolin. Not so much here on the Classifieds, but getting more common on eBay, and a disturbing trend, I must say. Actual cost by USPS is going to be $25-40 domestic, FedEx Ground about the same. $75 to me is a dealbreaker and I go elsewhere. It also shows me the seller is OK with gouging on the shipping or else has never shipped a mandolin before.....

I find that the sellers who charge high prices for shipping are the ones who give the instrument to a UPS store or Mailboxes Etc. to ship - and $75 doesn't even cover it. Ground Shipping from West Coast to East Coast is about $50 Plus a few bucks more depending on insured value. USPS is cheaper than UPS or Fedex - but forget about ever getting paid on a claim. I think most buyers factor in the shipping cost in what they're prepared to spend on a sale.

[Marty Jacobson]

Not to change to subject, but a related pet peeve I have is with seller's charging $75 shipping on a mandolin. Not so much here on the Classifieds, but getting more common on eBay, and a disturbing trend, I must say. Actual cost by USPS is going to be $25-40 domestic, FedEx Ground about the same. $75 to me is a dealbreaker and I go elsewhere. It also shows me the seller is OK with gouging on the shipping or else has never shipped a mandolin before.....

I should add that I also see mandolins for sale on eBay with $14.30 shipping, usually from sellers who mostly sell antiques and flea market stuff. In that case, I also wonder if it is going to be packed properly and arrive safely.

Where are you getting these shipping deals? It always costs me $75-100 to ship a mandolin. (Additionally, it costs me about $5 per box and about $15 in packaging materials to do the job right). I think the cheapest I ever shipped an instrument was $50 for a MandoBird (smaller package, not as elaborate packaging), ground service.

[Ted Eschliman]

You'll find that it's not the shipping charge alone. If you're shipping something worth $500, insurance is exponentially higher for an instrument insured for $5000. My experience is the same as Marty's, even without the hassle of good packing materials, shipping high dollar items is an expensive endeavor when you do it right.

[DHopkins]

Paypal is simply adopting the long-standing Visa and Mastercard rule (put in place since their inception) that merchants may not discriminate in any way against payments made with their product. That includes charging extra to use the card or requiring a minimum purchase to use their card.

Service stations and convenience stores do it all the time. Drive down any interstate and see two different prices for the same gasoline posted on the service stations's big signs. Many convenience store have little signs inside that indicate a minimum purchase if using a credit or debit card.

[Tobin]

When selling as a private individual I set a list price, have my target price, and then set the lowest price that I would take for the item.
Negotiations begin and shipping, payment, return policy etc are all discussed at which time I factor in all of this to determine my final price.

If I accept Paypal I have not violated their terms of service.

In this negotiation process, are you telling the buyer that if he uses PayPal it adds to the final cost beyond what had already been set as the sale price? If so, it violates their terms of service.

[Petrus]

In this negotiation process, are you telling the buyer that if he uses PayPal it adds to the final cost beyond what had already been set as the sale price? If so, it violates their terms of service.

Then their TOS violates the First Amendment.

[Eddie Sheehy]

If you pay by Bank Check you have to pay the bank a fee for the check to get the security it implies. If you pay by Money Order there is a fee for the money order. If you pay by PayPal you have two choices - a fee for their protection, or no fee but no protection. It's the buyer's choice, so the Buyer's fee. Unless of course the Seller insists on PayPal only...

[Tobin]

Then their TOS violates the First Amendment.

Not if you agreed to it when you signed up. Just like any other business contract.

I'm not necessarily defending the policy or anything. Just pointing out that people need to understand the rules they agreed to abide by. I do know of people who lost their PayPal accounts for violating this policy. They do pay attention.

[BrianWilliam]

Not to change to subject, but a related pet peeve I have is with seller's charging $75 shipping on a mandolin. Not so much here on the Classifieds, but getting more common on eBay, and a disturbing trend, I must say. Actual cost by USPS is going to be $25-40 domestic, FedEx Ground about the same. $75 to me is a dealbreaker and I go elsewhere. It also shows me the seller is OK with gouging on the shipping or else has never shipped a mandolin before.....

I should add that I also see mandolins for sale on eBay with $14.30 shipping, usually from sellers who mostly sell antiques and flea market stuff. In that case, I also wonder if it is going to be packed properly and arrive safely.

I respectfully disagree and have shipped several mandolins.

I don't trust any of the carriers to be gentle with my packages marked fragile. I use large boxes with lots of packing material. Large boxes bump up the cost. For me to ship a mandolin to either coast it's about $60-$70 depending on the value of the instrument.

I can understand that cost may turn off some buyers but it's not me gouging. From my perspective I ask why skimp on shipping. It's such a small cost compared to what's inside.

[Petrus]

I do sell on eBay occasionally (not so much lately) and it is standard business practice to simply add in the total cost of doing business to the final desired sale price. If I need to net $500 on a mandolin or rare book, say, I mentally calculate 500 + 50 + 15 (the net plus the 10% ebay commission plus the 3% PP charge, iirc) and thus advertise the item at $565. (To be more accurate, eBay will take $56.50 of this price, but the rounding off is usually close enough. But note that eBay is basically taking their commission off the PayPal and shipping costs too ... sort of like when you buy gasoline and pay tax on the tax.)

Usually I'll offer "Free Shipping" but am actually including the cost of shipping in the item, so I'll list it at, say, $600 or some other even number. It just looks better if your listing says "Free Shipping" and it's one less calculation a prospective buyer has to figure out.

So, essentially, regardless of the buyer's method of payment, everyone pays the extra % as a result of PayPal policy, even if they don't use PayPal, because that's implicitly what their contract entails.

[Petrus]

If a merchant is violating Paypal's terms of service, they should probably reconsider. Right now there is a very nice mandolin for sale in the classifieds, by a music store, that wants to charge list price for the mando, plus credit card or Paypal fees, plus, shipping, plus insurance. No wonder the instrument has been re-listed for the second time. If someone alerted Paypal/Visa/Mastercard about the upcharge for using their products, I'm certain the merchant would get a very stern warning.

I'm not sure about the "ethics" of offering a discount for cash / check purchases since that could be interpreted as simply another way of discriminating between CC/PP and cash purchasers. (I know you didn't bring that up but it occurs as the other option.) The consequence is that every purchaser pays the extra % fee, even if they don't use CC/PP for the purchase. Because the seller certainly isn't going to eat that cost instead of pricing it into the item.

[mandowilli]

In this negotiation process, are you telling the buyer that if he uses PayPal it adds to the final cost beyond what had already been set as the sale price? If so, it violates their terms of service.

No. Just as I wouldn't tell the buyer my target price or lowest price.

[StuartE]

Then their TOS violates the First Amendment.

The First Amendment says that Government can't abridge freedom of speech or the press. It has absolutely nothing to say about a company setting rules for the use of its products or services. For example, many social media companies prohibit users from using hate speech or pornography, something the government cannot do. PayPal bans its use to sell Nazi and ### insignia, etc.

There may be other problems with PayPal's policies. Also, I am not sure that the OP accurately presents PayPal policy.

Note that PayPal's policy makes a distinction, in the first place, between personal payments and purchase payments, where different rules apply the fee to sender and recipient of money.

Then, note that

For PayPal Business Payments, the PayPal Business Payment Fee is paid by the recipient unless it is disclosed to you before you send the payment that you, the sender, must pay this Fee.

It's not clear to me that PayPal has a rule against the kind of fee shifting described by the OP.

[Petrus]

Point is a smart seller is simply going to add the fee to the price of the item, period. Any buyer will have to pay the price with the PP fee figured in, even if they don't use PP.

[Mandoplumb]

Point is a smart seller is simply going to add the fee to the price of the item, period. Any buyer will have to pay the price with the PP fee figured in, even if they don't use PP.

And that is fair pricing?

[Tobin]

It's not clear to me that PayPal has a rule against the kind of fee shifting described by the OP.

We had this same conversation back in May of this year, and I had cited section 4.6 of the user agreement where it specifically addressed the fee/pricing rule. I just checked it again, and now that section talks about taxes. So it appears that they recently changed their user agreement. I can no longer find any mention of it being against the rules to add the fee to the price afterwards. So you may be right. That rule is gone now. Interesting!

[Mark Gunter]

We had this same conversation back in May of this year, and I had cited section 4.6 of the user agreement where it specifically addressed the fee/pricing rule. I just checked it again, and now that section talks about taxes. So it appears that they recently changed their user agreement. I can no longer find any mention of it being against the rules to add the fee to the price afterwards. So you may be right. That rule is gone now. Interesting!

Got a recent notification of TOS changing, but I haven't read them yet.

I understood the TOS pretty well, and the distinction between purchase payments and personal payments have always been pretty clear. If I send money from PayPal account, there is a choice between 1) purchase of goods, 2) purchase of services, 3) personal payment to friends and relatives.

If the rule about setting different prices according to purchase payment method is gone, that is indeed interesting!