Paypal surcharges

1819 Views 8 Replies 8 Participants Last post by jake, Sep 24, 2007

chaznsc

Discussion Starter · Sep 23, 2007

Thought we might all want to read up on this.

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). Nor does this restriction apply to Pound-denominated transactions by sellers residing in the United Kingdom listing items for sale on a UK-based website.

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epicfish

· #2 · Sep 23, 2007

So, I can't charge a "surcharge" if someone wants to pay via CC PayPal, but can I charge a "convenience fee" to dig up my Business PayPal account information so I can accept the payment? Heh.

I've read this and have known this for a while, but we're hobbyists and since the plants/items we sell are usually a lot lower than retail, getting hit with a 3% fee on top of that is pushing it.

...also, are we considered "merchants"? Under the legal sense...

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RoseHawke

· #3 · Sep 23, 2007

It's a gray area. I've know that technically you're not supposed to charge extra for accepting the CC payment (I never have) but I don't fuss about paying a bit extra to an individual. After all, what's 3% on 10 bucks, 30 cents?

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ringram

· #4 · Sep 23, 2007

People have done this for a long time on sites like ebay. In fact, some to the point of abuse. A $1.30 charge from ebay + paypal (if the ebay user uses paypal) may translate to $5 or $10 more for shipping if it's a dishonest seller. I would think it's to the buyer's discretion as to whether it seems "reasonable" or not. Most folks who sell on this site aren't really merchants unless they make over $5,000 / yr, in which case they would have to pay taxes. Less than that and the IRS considers it a hobby. The paypal fee isn't too bad, but some choose to get around it by using a non-cc and a cc account simultaneously and there's not really anything wrong with that IMO.

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jake

· #5 · Sep 23, 2007

That's been around quite a while and is largely ignored.

There have been debates, here and there, on Aquabid about charging someone a 3% fee for using paypal, citing numerous state laws that disallow merchant surcharges for credit card transactions. The thing about it is that many sellers were charging all paypal users this fee since that was the fee that was taken from them no matter in what manner they received the funding through paypal. If you are charging someone equally for bank transfers as you are for cc funding on paypal, then you could say you were satisfying the word of the state law perhaps.

You would still be breaking the Paypal user agreement, however, section 4-7.

If the couple of bucks or less that Paypal is going to charge you for accepting a payment is going to be too much to eat, it'd be easier to just specifiy that you don't accept CC paypal, or mentally figure it in with your asking price for whatever you are selling without announcing it.

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Burks

· #6 · Sep 24, 2007

If the seller has been extra nice and helpful, I normally chip in the extra 3% as a bonus for them. It doesn't bother me much if they add it to the final cost. 3% won't make or break either of us.

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if_fishes_were_wishes

· #7 · Sep 24, 2007

I don't mind the fee too much, I guess it's the price I pay for convenience, especially since I have a card that links to the Paypal account like a debit card.

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Blacksunshine

· #8 · Sep 24, 2007

jake said:
That's been around quite a while and is largely ignored.

There have been debates, here and there, on Aquabid about charging someone a 3% fee for using paypal, citing numerous state laws that disallow merchant surcharges for credit card transactions. The thing about it is that many sellers were charging all paypal users this fee since that was the fee that was taken from them no matter in what manner they received the funding through paypal. If you are charging someone equally for bank transfers as you are for cc funding on paypal, then you could say you were satisfying the word of the state law perhaps.

You would still be breaking the Paypal user agreement, however, section 4-7.

If the couple of bucks or less that Paypal is going to charge you for accepting a payment is going to be too much to eat, it'd be easier to just specifiy that you don't accept CC paypal, or mentally figure it in with your asking price for whatever you are selling without announcing it.

Paypal charges you regardless of the type of transaction. Most the time I eat the charge. but sometimes cool buyers will kick in a little extra without my asking.
But yeah. just work the paypal charge in with shipping or the sale price and so long as you are not violating the policy on paper they can't hold anything against you.

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jake

· #9 · Sep 24, 2007

Blacksunshine said:
just work the paypal charge in with shipping or the sale price and so long as you are not violating the policy on paper they can't hold anything against you.

Especially if the total price is the price for those paying via money order or cashiers' check, etc. too, because then you're not violating the Paypal user agreement.

I don't think it's a problem with sellers on TPT. I saw/see it on Aquabid quite often, with "please add 3% if paying by paypal" , right on the auction description. They are violating Paypal policy, but as a buyer I really don't care about 3% anyway. When sending money to someone who accepts cc paypal I normally add 3% and the .39 or whatever anyway if I know the person because I know they didn't have it figured in. Example, if someone is sending me plants for just shipping cost and they give me the actual shipping cost ( 2 lbs. to my zipcode , etc. ) and I'm paying via CC paypal.... adding the paypal fees to what you pay them is just common sense.

If I am going in on an overseas order with someone and my part is $150, I already plan to send him enough so that he has $150 after the fees and not before the fees.

On ebay, you can usually rest assured that they have figured in all paypal and ebay fees to the price of shipping/handling or the base price. I guess that's why a $15 flat rate shipping charge ends up being a padded envelope with a 79 cent stamp on it. :icon_roll I knew that the s&h was 15 bucks beforehand though, so it's hard to be mad as to "how".

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