your opinion on online stores with extra charges for using paypal

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Originally Posted by Adam_Wysocki

Would you really want to do business with a company that so freely and openly violates the terms of service of one of their vendors?

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Paypal is notorious for breaking it's own terms and conditions, no wonder that it has trouble enforcing them on it's 'customers'. So I avoid doing business with them as much as I can :P

Same with UPS... but that's a different story lol...

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Originally Posted by Krynos

Paypal is notorious for breaking it's own terms and conditions, no wonder that it has trouble enforcing them on it's 'customers'.

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That hasn't been my experience at all. PayPal has been a valuable tool in the growth and expansion of my business. It's working extremely well for me. ;)

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Originally Posted by Krynos

So I avoid doing business with them as much as I can

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So you've been personally burned by PayPal? How so?

-adam

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Originally Posted by Krynos

Paypal is notorious for breaking it's own terms and conditions, no wonder that it has trouble enforcing them on it's 'customers'. So I avoid doing business with them as much as I can :P

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How? I use Paypay and would like to know if there is something I should worry about, only cause I have recently started using it.

That's the good news :) Personally no, I've been protecting myself.

One of my other hobbies is home theater, high end stuff - custom rooms etc. Part of the market is high end projection. These are CRT projection units, you've probably seen them in various venues - the red / green / blue projectors. Similar pricing scales to ball python morphs actually! A good new CRT projector cost somewhere in the region of $20,000 to $70,000 dollars. Too rich for my blood but there is a booming market in reconditioned ones - they are one of the few electronic gizmos that are readily repairable and can be reconditioned.

Anyway, there is a lot of personal selling, and small businesses run around this - born of the ebay boom. One of my contacts is a successful seller of reconditioned and repaired units. He was using paypal for a long time to conduct transactions as it appeared great for international sales. One particular unit was shipped to a customer that had paid with paypal internationally. The customer claimed it was damaged on arrival (shipping damage). Now being a stand up guy, and he knew he could fix it - its what he does, he offered to take it back and refund the money, or send a replacement or repair and return the unit. He's so customer focused it's not funny... Anyway the customer decided that wasn't good enough (what else can he do, jump on a plane fly out there to fix it for free?) and issued a hold on the credit card he'd used to put the funds into his paypal account, the credit card company requested funds back from paypal. (A proceedural step in the proccess). Paypal then took money back from the seller, except the money wasn't in the paypal account anymore (weeks had passed) so they transfered cash from his bank account to his paypal account, then took it from there (yes you do give them full access to you bank account if you give them that information). The credit card company settled with its customer refunding the money. So at this point the buyer had the broken projector, and a refund from his credit card company, paypal had the sellers money taken not from his paypal account, but direct from his bank account, and the seller had no projector and a big hole where the money was. Paypal would not return the money as the credit card company had settled, nor would it give it to the credit card company paypal was disputing the charge back with them. This was 2 years ago, and is still not resolved. The amount of money in question was over $10,000.

In a similar situation another vendor sold a large amount of high end equipment via ebay. Funds were recieved for the purchase via paypal. Vendor got the money and shipped the goods. Two months later paypal informed him that the funds to pay for the equipment had come from a fraudulent wire transfer, as such the paypal account was on hold. Paypal froze the account containing six figures, this was an account he was using for his buisness to both buy and sell, as it typical for this market. So because someone had transfered a small amount of money in to his paypal that turned out to be fraudulent paypal froze the majority of liquid assets he had in his company. He almost went out of business as the money was frozen for 16 months while they "investigated". In the end they unfroze the account, deducted the fraudulent money and that was it, no appology, no interest on the money. Needless to say he doesn't use paypal anymore.

These are stories in which I know those effected, they did nothing wrong but paypal took what it wanted, when it wanted with no consideration. This practice I am sure has nothing at all to do with the nice interest it can make on frozen and siezed funds... noooooo....

There are so many websites out there with similar tales and stories on them.

There are two things I avoid when shopping from businesses, especially online...PayPal/cash only and UPS. I'd rather snail mail a cashier's check (or find a similiar product from another merchant who accepts credit cards) than use PayPal.

And UPS...pffft.

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Originally Posted by Krynos

Paypal froze the account containing six figures, this was an account he was using for his buisness to both buy and sell, as it typical for this market.

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Well, I've started/owned a lot of companies in my life (starting companies is what I do for my "real job") and in my humble opinion, anyone that has six figures in a PayPal account is a moron. When you are operating on that level, professionals use checks and wire transfers to buy and sell good ... the IRS prefers it that way.

To me, both of those examples that you cited have nothing to do with PayPal. They, as a company have to protect both the buyer and seller and try and limit liability. Yes, there are bad people in the world that take advantage of the system, but those bad people are just as adept at working the credit card system as they are PayPal. If those goods were sold with a credit card, the buyer could just as easily make a fraudulent complaint with VISA/MC and VISA/MC would freeze the sellers merchant account. If VISA/MC determined that the buyer was entitled to a refund, they reach right into the sellers bank account and take back the funds. If they aren't there, VISA/MC will put a lean on the sellers business. This is how the world of credit transactions work, and people that choose to sell via PayPal are no different.

-adam

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Originally Posted by Krynos

paypal took what it wanted, when it wanted with no consideration.

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What would happen if you actually set up a merchant account with a company that accepted Visa/MC/etc.. and they direct deposited your funds from your account once a month into your bank account? (the only way most of them will even set you up with a merchant account) And then you had a charge-back after the money was transfered from your merchant account to your bank account? Do you think the company you had your merchant account with would not recover that money (even without notice)?

In the instance you write about, yes... it's a surprise... and yes, it's quite rude.. But what would you like them to do? This situation really has nothing to do with Paypal. It has to do with VISA (or MC).

Yes, there are a bunch of horror stories on the web about paypal... most of them could have been avoided had the user that had the nightmare actually read and understood the TOS.

For most people using Paypal, the 2.5% they charge is pennies compared to what you'd pay if you actually had a merchant account and had less than $5000 a month in transactions... The people that can get it for cheaper, do it cheaper... the people that value paypal, use paypal... The problem occurs when a buyer isn't happy with what they purchased (not paypal's fault), a seller gets a charge-back (not paypal's fault), or the funds from the buyer's account prove not to be available (again, not paypal's fault).

As far as the orriginal question, the 2.5% is just part of doing business, as some of us have said. If you choose to accept credit cards, and don't have the traffic required to get a real merchant account, then you use paypal. If you had the traffic to warrant a merchant account, you'd get charged a percentage from them too. If you have a problem with the fee they charge you in order for THEM to stay in business... then incorporate their fee into your rates.

As far as I have interpreted the TOS... it is wrong to ADD a surcharge for using paypal... but if I were them... I would list a $500 item for $515 for orders by credit card/personal check and $500 for cash/cashier's check/bank wire... etc.. If you're giving a cash price DISCOUNT... it's not exactly ADDING money to your credit card purchases... and by adding personal checks to that list, then you're not singling out just the paypal payers.

Just my $0.09 (it's a little bit longer than .02 :) )

Adam, do you take just Paypal/certified cash or do you also take credit cards?

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Originally Posted by cassandra

Adam, do you take just Paypal/certified cash or do you also take credit cards?

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PayPal, certified checks, personal checks, business checks, e-checks, money orders, credit cards (VISA/MC/AMEX/DISCOVER), wire transfers, payment plans, trades, trades/cash, cash ... I try and be as convenient as possible for my customers! :D

-adam

Hehe, convenience and customer preference is very cool. =)

Some of us have strong opinions against PayPal and some don't. Nothing wrong with either side. Go go free market economy I guess...=)

(Although UPS can go ahead and burn in hell /nod)