Paypal fees discussion

I don't like it when sellers add paypal fees afterwards. I would rather they just included it in the cost price or the overall shipping price, so you don't get a shock when an extra 4% is added on right at the end.

When I sell items from my online shop, the shipping price includes the actual shipping, shipping material costs and a bit extra to cover paypal.

 

I agree with you 100%! My personal practice is this:

If I am selling merchandise from my commissions, stores, website, or Ebay I don't charge my clients any "transaction fees". However, if I were to sell a large ticket item on a sales forum (such as a doll here on DoA) I would ask the buyer if they would mind paying for the PP fee. Again, there are ways to avoid paying the "fee" on either side. It simply depends on the nature of the sale and the FOP (Form Of Payment) that the buyer will use to fund the purchase.

Communication between buyer and seller is the key thing and understanding how PayPal actually works. When all parties understand how it works, there shouldn't be an issue. If someone is charging you a % AFTER the sale/transaction/agreement has occured, THAT (IMO) is an issue that needs to be addressed. It's just wrong! I would refuse to pay the fee and cancel the sale if I was the buyer. I don't care how much I wanted or needed the item.

 

But, however, on the other hand (and other introductory words)... the Terms of Service is a contract with Paypal into which you enter by using their service. It is, as a contract, a legal document. Violating it is, thus, in the strict definition of the word, illegal (something violating a legal agreement).

It's not *criminally* illegal, no. It is, however, a violation of contract. You can be sued by PayPal for violating those terms. In reality there would be no point in a gigantic corporation suing some dumb schmuck with a few dollars in his or her PP account, thus the option to drop you like a hot potato ... but it's still a breach under contract law to violate your terms of service.

I think there's a general (not just you, Ostrich) misunderstanding of the basics, and of the way the term has shifted over the years. Everyone assumes "illegal" = a criminal act or other violation of a statute for which the punishment is jail time, but there are many types of law that can be violated.

All it is, is a less heinous sort of illegal . However, something that violates a law (civil, criminal, tort, commercial or otherwise) IS, in fact, "illegal."

 

Going back to the original question - I think it's extremely tacky at best and unethical at worst for a seller to tack on paypal fees. Price your item high enough in the first place or suck it up. I honestly don't understand why it's even allowed on the marketplace here for people to specify "Buyer pays paypal fees" given that it's against Paypal's TOS. If you don't want to charge the fee or deal with it, well, don't use paypal.

 

How to not irritate people with paypal fees: A simple guide

Step 1: Decide on how much money you want to get for your item, eg. USD600
Step 2: Find the paypal fee associated with this, eg. 4% of USD600 = USD24
Step 3: Add to original desired price, eg. 600 + 24 = USD624
Step 4 (optional): Round it to the nearest nice number, eg. USD624 --> USD625
Step 5: Post item on DoA at the price calculated in step 3 or 4, eg. FS: My Cute Dollie! -- USD625
Step 6: Don't get too greedy looking at your new number and start asking for Paypal fees on top of it.

 

Step 6 totally makes me smile. I do agree though. Although I seldom buy from MP, I find a lot of companies (esp Chinese ones) charging additional Paypal fees which I don't know about until I'm checking out. In fact even on DOA, I don't know what is the norm -- do buyer "automatically" have to add paypal fees to the seller? (e.g. Seller say $10, do I pay you just $10 or $10+0.30+X%)? I've a few MP transactions and it's so troublesome to have to ask everytime. I prefer everything to be upfront, so I can decide if I want to buy or not without worrying about (hidden cost), and then just pay up immediately. It's so much easier AND faster without having to go back and forth with the seller.

 

The technical term for this is a Bait and Switch if I'm not mistaken, and it is unethical if not actually illegal.
Some sellers will tell you up front that they will charge you the fees, but this is against Seller/Marketplace rules and is illegal because you are not supposed to charge your customers fees that you as the seller have to pay for the luxury of using the electronic payment service. The same rule applies to credit card machines in brick and mortar stores.

As was mentioned earlier, the legal and ethical way to make back all costs (fees included) is to include them all in the sticker price up front so that you're not misleading the customer, as you yourself suggested.

Don't let sellers mislead you.

 

I'd prefer that a seller be honest with me upfront that I'll be paying paypal fees rather than trying to hide it into their prices. As someone who does a lot of art commissions, and commissions other artists in turn, it's considered polite for the commissioner to foot the paypal fee and I've never given it a second thought to a singular seller with an MP set up to wish to charge paypal fees.

I'm rather laughing at how strongly some people feel about paying fees that they'd refuse to buy from a person but then say they should work the fee into the selling price. Uh, what? You're still paying the paypal fee.

 

Yeah, you are still paying the fee, but you're using PP's service, not the other way around. It's technically the seller's responsibility to foot the bill of the fees.

It's the same principle as the credit card machine: Many stores have a minimum purchase because of the fees charged. Guess what? You technically are paying those fees as the customer but that's because it's worked into the price. They may not out-right say "You're paying my CC fees, btw, so that's another $5 on the price that I didn't tell you about."

When you put the fees into the price to cover them but you don't claim any such thing, that's a loophole.

 

But you see, if the seller includes the fee in the selling price, the buyer is not paying more than the stated price. If you look at the price and you decide that it's acceptable, why should it matter whether the seller was thinking, "I think it's worth $20 but I will eat the fees" compared to "I think it's worth $18 but I will mark up for the fees"? Either way, the item costs the buyer $20, with no extra.

If you look at offline shopping in stores and such, credit card companies usually charge the merchant a fee for receiving payments, but they don't 'charge fees'. The assumption is that they factored it into their business costs, but who is to say that they didn't mark up ALL of their items so that they can cover the credit card fees, causing cash-paying customers to 'overpay' when not using their credit cards? The point is, you won't ever know. And it shouldn't affect you because it doesn't change the listed price.

I think the important thing is that people feel 'cheated' when they have to pay additional paypal fees, because the listed price is usually the price they are willing to pay, and the additional fees pushes it over their planned expenditure. However, if the listed price in inclusive of fees, they don't have to pay extra on what they were already planning to spend, so they tend to prefer it. That is my interpretation of this dislike of additional fees.

Personally, I find it odd that some people seem to take offence to the seller's mindset when doing their purchasing, considering that, really, you'll never know whether a list price 'no fees' really means the seller is doing you a favour by letting the fees cut into their profits, or if they have already budgeted for it. *shrug*

 

Exactly. The other workaround I've seen is the 'cash discount'. (You can't charge a credit card fee, but you can offer a discount for using cash and they won't nail you.)

 

When a seller asks a buyer to pay for a service the seller uses (being able to receive money through Paypal) the seller may also ask the buyer to pay for the seller's internet subscription, car insurance, rent and anything else the seller uses in order to able to sell something.
As a buyer you are only paying for the Paypal fees if the seller charges the fees on top of the agreed amount of $X that needs to be paid for an item. If a buyer pays only $X, then they pay for the item. Whatever additional costs the seller is faced with, is none of the buyer's business.

 

This is what I agree with in reply to Bellforge's post. Personally, I am okay IF a seller states upfront there is paypal fees, so I can factor it in. It might be troublesome, but I can EXPECT how much to pay and plan my budgeting accordingly. Granted. Paypal fees might be a few "cents" for little stuff, but little things do add up, especially if involve major purchases where the fees can run over tens of dollars. It's not that I am so "poor" (which unfortunately I am lol) or too "stingy" that I don't want to pay the fees (even if it's against paypal rules for sellers to ask me to pay). The keyword here (at least for me) is "prefer". Like I said stating everything upfront makes things easier and faster (less time spend on going back and forth about how much exactly to pay) for everyone involved.

 

Galileo: That's great that you're okay with it but it is still an unethical practice for sellers to be upfront with it. The customer pays for the item. End of Story. Customers don't pay the rent of the building, they don't pay the utility bills of the building, they don't pay the fees of the credit card machine or any other overhead the seller might have (and that's what fees are: Overhead). Customers pay for nothing else but the item. And shipping if applicable. It's the seller's job to cover his overhead by setting appropriate prices on the items he is selling, and all we have to do is decide if those prices are fair to us.

 

If a seller tries to tack on the fee AFTER I have agreed to the asking price posted in the thread I am sure to drop the sale. I don't haggle and I don't discuss. I send them a polite email telling them why I am dropping out of the sale and they never write back.

I find the above behavior extremely unprofessional and sneaky. There is no item that I want so badly that I am going to deal with a seller like that. Be up front and honest about what you expect to be paid and your transactions will get off on the right foot.

 

I like how Isenn stated her reply.

Personally, as a seller, I don't charge extra fees. The 30 cent surcharge is figured into the S&H charges same as supplies - but otherwise, I just eat that 2.9 percent. After all, I'm the one wanting to use PayPal's service and that means I'm responsible for giving PayPal their kickback for the luxury. PayPal is no different than any other company - they are out to make money from their customers...as the seller, I'm their customer, not my buyer. Group Orders is a different matter - I don't cover those fees - each individual person covers the fees associated w/their items.

As a buyer I will not buy from someone who lists + PayPal fees..that is tacky. It is a cost of doing business - and everyone who does business has to deal with the overhead costs. In the last few months I've been VERY tempted to slap some flaky feedback on sellers who mention after the fact that the price also includes additional PayPal fees. If you don't state it up front and then try to collect at the end - you have changed the agreed upon price, which is an allowable reason for flaky feedback by DoA MarketPlace Rules.

 

The unfortunate thing is that almost every seller on DoA charges pp fees. I've had some charge me these fees when I know they weren't charged the fee, but the seller never gave me my money back. As a result, I usually ask to do gift or something after. I've sold dolls, heads, clothes, etc, and I know how much the fees take from the bottom line and quite frankly some people need to realize that most second hand dolls are not going to net you they're original price. I realize that the cc price can be high but it can also be low and most sellers charge the same even though it doesn't charge the same. Honestly, I wish sellers would stop charging pp fees.

 

From what I learned in my Intro to Entrepreneurship class last semester, bait and switch is illegal in the US (no exceptions). Now, whether anybody thinks it worth enough to them to call the FTC is a totally different animal.

Personally, I don't like paying paypal fees, but I'll deal if you just figure it in and give me a total price right from the start. What I really don't is people who I ask for a quote on shipping and find out that shipping is going to be more than the item. Sometimes this is unavoidable for sellers and I get that, but could you try to post estimates (check with your local post office first of course, make sure they're good estimates) so I don't spend 6 days e-mailing you to find out that I'm not going to buy after all?

FYI, I've had the second one happen with US sellers before. I knew for a fact that it wasn't going to cost $57 dollars to ship a pair of stockings and a wig from the west coast to my house in Ohio. Especially if I didn't want insurance.

 

I really don't understand why the concept of charging the buyer fees became so popular. The fact of life is that things go down in value and unless you have a super rare item - you won't get back your money. It is down right silly for a seller to think they can put up the item at new cost, add in their original shipping, then payapl fees and then hit you with domestic shipping as well. At that point the buyer is better off going to the company and getting the doll new.

I've had that happen in the marketplace more than once and I simply tell the person "no, you're over charging". Just this week I had someone insist I could only get delivery confirmation on my package if I did priority shipping and then she wanted $8...turns out that extra $2 was fees...I told her NO and just walked away from the purchase.

I have nothing against fees being built in - I understand how much PayPal cuts into the bottom line - but sellers need to realize stating what they are doing is against their agreed contract with PayPal and that tacking them on after the fact is against the Marketplace rules for DoA. Unfortunately - I think at least 75% of the people here on DoA are doing those things.

Oh - and on the gift/personal payment thing...as a seller, you are not allowed to ask payment to be sent that way to avoid fees. I admit I've sent payment as such to friends or someone I'm a repeat customer with - but it is my choice. Usually when a seller comes out and asks - again, I'll walk away. Unless I really need the item and the price is super excellent, then I offer to pay fees if it is under a $1 (which I've done twice in the last year).

 

I don't exactly agree with your point on shipping estimates. I live In Canada where the cost to ship with insurance is dreadful. However I am not going to cart every new sale item to the post and get average shipping costs for everywhere in the world upfront. I do warn people on their very first communication with me that I am in Canada and for sure the shipping will be a shock. If they want to proceed with me after that warning I go to the post and get the quote and try to offer options. I have yet to have anyone complain about this method but maybe that is because I do the check within 2 days of the buyer asking me. Also, I don't want to get stuck with someone complaining to me because I said "about 45$ for this part of Europe" in my sales thread and their country turns out to be 55$. I won't be swallowing the extra 10 bucks nor am I going to subject myself to the usual haggling these types of small extra costs inspire. I just don't sell enough on the marketplace to have such a pro shipping service set up. I think just going to the post office the next day and coming back with some 100 percent accurate options is best for the buyer.

It sounds like you just had a bad transaction with a person who was over charging you and making you wait around too long for a good solid estimate. But I don't know that we can expect all the casual sellers on DOA to set up shipping tables. Although I agree that it would be helpful it is not necessary.