your opinion on online stores with extra charges for using paypal

i'm curious how you all feel about this. if you are placing an order with an online company and using payapal. do you think it's fair for the company to charge you the extra fees that paypal charges them to use their service?

as far as i'm concerned... if someone wants to offer their customers the option of using a credit card or paypal then it's up to them to cover those costs... not charge the customer extra. :confused:

another way to look at this... you go to a restaurant and when you go to pay they add an extra $5 to your bill cause you are using a credit card...

just seems wrong to me. their sales increase because of ease of purchasing... but they don't want to pay for the increase-causing-product... instead they want to extra bill. hrrmmpphhhh

how do you all feel about it?

I have a couple of thoughts ...

1. It's very "low class" ... I mean come on, if you're in business, try and be professional.

2. It's a violation of PayPals terms of service and can get the users account suspended.

3. It's illegal to do in several states inside the US.

I'm not a fan of the practice.

-adam

i'm in the process of placing an order for approx $800 with an online company and they want an additional 2.9% plus the 55 cents paypal charges them to withdrawal the money from their paypal account.

this is really ticking me off big time... i'm seriously thinking of not placing the order.

but i checked and paypal discourages the use of surcharges but doesn't 'disallow' it.

So don't buy from them, but send them an email to let them know why.

i've already emailed them letting them know that the reason we were going to use paypal is so everyone who's going in on the order can pay up when they pick up their 'portion' of the order. we all live hours away from each other, so paying up front is difficult and i can't afford to pay the entire bill ahead of time myself... so using paypal/credit card... i can collect the money, pay the card and VOILA! it's a done deal.

so i'll see what the company says regarding my email to them.

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Originally Posted by recycling goddess

but i checked and paypal discourages the use of surcharges but doesn't 'disallow' it.

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This is from PayPals user agreement ....


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).


-adam

With paypals shady practices of witholding funds and taking direct from "customers" bank accounts (when they have access) I won't use their service unless I absolutely have to. They have some terrible business practices.

The only time I use paypal is for hard to pay for ebay items, when there really isn't another option, even then paypal only has the details of a very secure credit card, so they have no access to any of my fund that I cannot easily recover with a quick phonecall :) Once you give them access to a bank account recovery is a long drawn out process.

Do a google search for paypal problems, or paypal horror stories.

However if a company wants to charge extra to allow you to use paypal I don't see an issue with that, paypals fees are much higher than the norm set by Visa and Mastercard, they even manage to charge more than Amex to the vendor in fees.

If credit cards arn't your thing then a bank linked visa or mastercard debit card is a much better approach than paypal.

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Originally Posted by Krynos

However if a company wants to charge extra to allow you to use paypal I don't see an issue with that, paypals fees are much higher than the norm set by Visa and Mastercard, they even manage to charge more than Amex to the vendor in fees.

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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? If they feel comfortable enough to totally disregard the binding contract that they entered by becoming a PayPal user via PayPals user agreement, can you really trust that they will honor any agreements that they have entered in with their customers (warranty, sales agreement, etc)? I think that in business there is a lot to be said for "character", and what's to be said about the "character" of an individual or organization that willingly signs up for a services, uses that service to make money, and then thumbs their nose at the rules of that service?

No one is forcing anyone to use PayPal ... if you don't like the fees, don't use the service. To me, charging a surcharge ion PayPal is no different than walking into a convenience store and stealing a pack of gum because you feel that the asking price is too high.

-adam

It's crazy when some sellers ask you to add that 3% for paypal charges! I would never buy from someone that asks me to add on 3% if using Paypal. If you as a seller offer PayPal as an option to your customers, you should include that 3% in the cost of doing business. When I see ads that state "add 3% for PayPal" I move on!

I feel the same with these added box charges, just include the cost of packaging in the total cost of the item for sale!

I for one hate seeing $5000 for a snake and please add a $5.00 box charge + an extra $2.00 per added Heat Pack + $2.50 packaging fee + $40.00 S&H + add 3% if using PayPal! As a buyer I'd rather see…$560.00 Shipped! Or $525.00 + S&H!

It's like buying something at the store for $20.00 and they tell you it's $20.00 plus a 2% for paying with a credit card + gas prices went up so add another $0.05 + the stock boy got a raise the other day so add another $0.05 + 6% Taxes!!

It is illegal in most states to charge such a surcharge, and not to mention it violates the TOS from Paypal.

If these people get reported for charging extra for using paypal, their paypal account and all the monies in it will get siezed for a great deal of time.

No one really seems to care about these consequences though, as they just keep opening up new paypal accounts and doing it all over agian.

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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)

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Originally Posted by Adam_Wysocki

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

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what about organ donations and little siblings?

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Originally Posted by alexrls

what about ... and little siblings?

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Are they good workers? :twisted:

-adam

well i think the part of this entire transaction that upsets me the most is they even want me to give them the 55 cents it costs them to transfer the funds from their paypal account.

i'm going to be talking to the others going in on the order and possibly cancel the entire transaction.

i have also run many businesses (but don't do start ups for a living like you adam) but i just accept that if i want to offer my customers an easier way to pay ME than i eat those costs. simple. the ease of payment brings the customers to me and then to slap them with extra costs is silly... and bad business IMO.

with the right incentive. (branding irons and cat-o-ninetails) :devil: :devilish: :twisted:

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Originally Posted by alexrls

with the right incentive. (branding irons and cat-o-ninetails) :devil: :devilish: :twisted:

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That's the way I'm already "motivating" my employees! :D

-adam

Confused....

Someone wants the 3% extra for the paypal fee. The item costs $100. So with the fee it would be $103 transfered via Paypal.....so when you transfer them the $103, paypal will determine the 3% fee based off of the $103 not the $100 and the actual fee will be $3.09 instead of $3.00...so technically they are still not getting all of their fee ;)

If I see an ad that asks for an additional 3%.....I just exit the ad...I would never buy from someone with those kinda practices.

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Originally Posted by daniel1983

Confused....

Someone wants the 3% extra for the paypal fee. The item costs $100. So with the fee it would be $103 transfered via Paypal.....so when you transfer them the $103, paypal will determine the 3% fee based off of the $103 not the $100 and the actual fee will be $3.09 instead of $3.00...so technically they are still not getting all of their fee ;)

If I see an ad that asks for an additional 3%.....I just exit the ad...I would never buy from someone with those kinda practices.

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hahahaha i never thought about that hahahahaha thanks for making me smile in all of this daniel!

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Originally Posted by daniel1983

paypal will determine the 3% fee based off of the $103 not the $100 and the actual fee will be $3.09 instead of $3.00...so technically they are still not getting all of their fee ;)

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They're actually making a profit on it.... check this out...

Paypal fee (2.5%) on $100 = $2.50
Paypal fee (2.5%) on $103 = $2.58

Actual amount going to seller = $100.42

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Originally Posted by ddbjdealer

They're actually making a profit on it.... check this out...

Paypal fee (2.5%) on $100 = $2.50
Paypal fee (2.5%) on $103 = $2.58

Actual amount going to seller = $100.42

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$100 purchase

Paypal fee (2.5%) on $100 = $2.50

So ad the $2.50 fee to the $100:

Paypal fee (2.5%) on $102.50 = $2.56

They loose 6 cents.

But ya....If they charged 3% extra for a 2.5% fee....yep...they would actually be makeing a few extra cents and it makes alot more sense.

it's 2.9%

I've never had any problem at all with PayPal, it allows buyers to put that must have purchase on a Credit Card and allows you the seller to provide that convenience to your customers.


Not everyone has $1,000-$5,000-$25,000 cash laying around to spend on snakes, but a lot of people are more than willing to charge it, get their snake tomorrow morning and pay their Credit Card as they go.

I've also seen people get 0% introductory rates on Credit Cards for 18 months. They buy their babies or ready to breed males/females today and have 18 months to pay them off. At that time they may have reproduced or you bought a 2yr old snake that will breed soon for the price of a baby.

I've bought online many times and only once have I had a seller ask for a extra 3%. I happily paid it since he already knocked 50$ off his original price. On ebay I think that they tell you for any sell over $500-$1000 that you should use an escrow service.

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Originally Posted by greenmonkey51

On ebay I think that they tell you for any sell over $500-$1000 that you should use an escrow service.

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I think that was mainly before eBay purchased PayPal. eBay now makes tons of money off of PayPal, so it doesn't make any sense why they would send their customers to an escrow service, instead of PayPal.

When PayPal was first formed, the profit making idea was to be made off of the "float"... they still make PLENTY of money this way, AS WELL as charging their fee.... but hey... It's in demand, it's a great service, so people will pay for it now that they got it free for the first three years or so.

I have had several problems with paypal.. Some chargesbacks and all have been found in my favor.. As far as the fees go, mine are already in the price. My merch. account is a little better on the fees as it is only 2.1% plus 0.25 per transaction unlike paypal. My other "hobby" is firearms and supplies and almost everyone charges a % for thir transactions or says price is a cash price..lol