Paypal fees discussion

Actually, it's not that hard to calculate. Grabbing a 4% amount, then you know that 96% of your sale price needs to be the amount you want. So you divide the amount you want by the percent to find the amount you need to charge. For instance, say if you want $1000, you divide $1000 by 0.96, and come up with $1041.67. $1041.67 * 4% = $41.67, leaving you with your $1000.
Of course, even in this large amount, if you had just tacked on $40, you'd only be out $1.67.

For your 50% example, that means that 50% of the sale price needs to be $100. Divide $100 by the 50% you need to keep, and you end up with a $200 sales price.

 

I had never even heard of anyone charging the buyer paypal fees until I started buying stuff from the market place here. I deal with it though, it's completely annoying (wtf math!?) and I see it as rude, but if someone has something I want then eh, my money goes to them. But I secretly hold a grudge . But I really don't see it as acceptable at all (except of course group orders, but that's something completely different). If the seller is saying "yes, I will allow you to send your money to me this way" I don't think it's okay to add on a "but you have to pay my fees for me" especially since many times Pay Pal is given as the only option.

I never knew that it was against Pay Pals terms to charge extra for the fee. But since it is, what is the argument for adding the fee? Stop doing it because you are not allowed to. If you don't want to stop, don't use pay pal. Really the discussion should end there.

 

mmk im in a situation where this seller (not going to name any names..yet) is trying to charge me a 2.9%( for all together trans) on top of a 4.9% (for CC) = 7% total extra for paypal fees trying to buy her doll.....

to me this sounds extremely fishy to me especially since she lives in the state right above me so its not like she lives outside the US...and in her thread she says that shipping cost is free for US...so to me this sounds kind of scammerish
but i would really love some input please!

 

For a short time, I had the kind of Paypal account had no fees. But it was severely limited - you could only have so many transactions a month. And there were fees on certain transactions, and they were much higher than the normal .20 plus 3% (or whatever that is.) And fees from other currencies were charged even more.

There was a time I sold a doll with this account and even though the payment was a transfer (which was supposed to be allowed) the fees turned out to be close to $50. I ended up refunding the payment (which took weeks to get back to the buyer) and having her then send the payment to my husband's account (rather than charge her the fees, which she actually offered to pay.)
It was such a mess, and the buyer was saintly in her patience. But I never wanted to go through that again, so I ditched that account.

I wonder, as someone stated above, if people haven't run into charging fees in other hobbies because this hobby is so obviously more expensive than others...?

Also, having seen several real scams in this hobby, I am not quick to throw the word around - especially when someone might be trying to merely make a modest profit, or cover unexpected fees in order to break even or take less of a loss.

 

Actually, if you have a Premier/Business account, (these are the sort that are always charged fees) the amount you lose to PayPal goes DOWN as a percentage of the total the higher the price of said item. While the total might seem higher, $.30+2.9% is a larger percentage of $10 than $100. Plus if you actually do more than $3000 a month in sales that 2.9% drops to a lower percentage rate.

 

rkold, thanks for your explanation.
I have a premier account because i buy tons..and it looked like there was no choice when i needed to sell now and then...

i have often wished there was a alternative around to rival them

 

I'm sort of several minds on this.

If it's personal.... ie. non business then eat the fees or add them as long as you up front about it if you are going to charge the fees. Don't tack it on as an afterthought when someone has agreed to buy from you. Let people know up front what it will cost them.

If it's a group order then add the extra for fees, you're doing people a favour. No need for you to pay for that out of your own pocket.

If it's business, then build the fees into your pricing structure. That is the proper way to conduct a business.

When you are in business and deciding what to sell something for, the things you take into consideration are what it will cost to make and sell the item and you then decide on what your profit will be after that and the two together become your selling price.

We don't add Paypal fees on top of what we sell things for. We eat the fees as part of doing business though that can bite us on certain things.

For example with Dollzone items, the company sets the retail price and anything we have to pay for comes out of the difference between retail and the agent price. We can't add the Paypal fees on top of the retail price, instead it takes a healthy bite from the profit margin.

For things that we make, we take all sorts of things into account when setting the price. For example, just off the top of my head.....

Paypal fees, Ebay listing fees, Ebay final value fees, bank fees, material costs, petrol to go and buy the materials and to head off to the post office to send the pieces, wrapping materials, tape, envelopes, boxes, income tax (lets not forget the Governments cut of earned income), in Australia we also have GST (10% tax on sales within Aust and on imports into Aust), Shipping to and from Aust (interestingly, Ebay don't charge a final value fee on postage but Paypal will take a slice of it), customs duty, electricity, parts and service on sewing machines, other tools we have to buy occasionally and the list goes on..........

All these things have to be taken into account before we even get to deciding what our time to make something might be worth and on some things that amounts to precious little. (thinking of OOAK outfits that have lots of time put into them for little profit sometimes if they sell at all)

Fortunately, like a lot of people on here, we don't just do it for huge profits, we do it for love of the dolls and the people that collect them as well.


There are so many hidden costs that most buyers don't even think about or realise are there when they look at the price of something. To me, discussion on one small fee and whether to add it or not seems a drop in the bucket.

 

Absolutely. Why not complain about the wee bit of the price that comes from the cost of thread? Or tape? It's all overhead.

 

Google is working on a Paypal alternative, and I'm really eager to see it happen. I think they have a shot at being a viable rival, because they are so massive and have such an enormous user base.

 

I am also a seller on Ebay, and I use Paypal all the time. I NEVER charge for my fees, but there is NOTHING illegal about doing that. Many sellers just add the fees into the lowest price they are willing to accept, and say nothing. I use Paypal for the convenience of my customers and myself, so I don't mind paying their fees. Now EBAY is another matter--they are chasing sellers away constantly jacking up fees and adding hidden costs. But until I find another way to sell, I am stuck with them.

 

I have had paypal for a couple of years now and since using it buying dolls or selling dolls, I NEVER charge a buyer or seller fee. I am using their service for buying or selling so paypal gets their money from me no matter how I look at it.

 

Thanks to all, folks, for the helpful discussion.
Any other information on a possible competing Google service as yet?

 

That would be Google Checkout.

 

I think the real question here is do we as a community, both sellers and consumers feel that Paypal charges an exorbitant user's fee for their service? Perhaps as sellers, we feel the fees are incredibly high whereas the consumer doesn't see what Paypal takes away. Also, realize that we are at the mercy of a monopoly that can change their fee structure at anytime without notice, for example I just found out from here that transactions with Europe have higher fee rates! Who is the true bad guy here if any?

 

Um, they do... the percent is built into the cost of all the items they sell. As with every other business, the fee for receiving money is calculated into their costs to determine the price of their items. Every business has at its heart the idea that you maximize profits by balancing charging as much as possible with staying competitive with low prices.

That's why it's perfectly OK to ask $210 for a doll (when you really want $200) to cover your fees. Both Paypal and credit card companies stipulate you can't charge someone extra for using a credit card or paypal, so you have to charge everyone the same meaning the higher price.

Now, it's perfectly fine for an individual to decide the doll is 'worth' $200 so they will charge $200 and eat the fees for the sake of the mutual convenience of Paypal or CC acceptance. But, from a business standpoint, raising the asking price to cover the fees is just part of the deal. I realize not all of us like to think of our hobby as business, and of course as buyers we all want the best price and as sellers we all want the best price (funny how one means lowest and one means highest isn't it?)

Btw, Rkold and I absolutely mean no disrespect at all! Just, I see the debate as the owner of a business who uses Paypal (and has to make sure our prices take into account the up to 4% that is going to be taken by Paypal) as well as a collector (who sometimes casually sells things). It's hard for me to separate my business view (of course you raise the price to cover the fees, a business can't survive if it is losing money) with my personal view (I want this hobby to continue to be fun, I don't really care if I make any money so long as I don't lose TOO much).

H

 

Just wondering (cause I can't seem to find it) where it says that charging the customer your Paypal fees is illegal. Just for my clarification. Thanks!

 

OT. maybe but... then Google Checkout is working now? Has anyone tried it?? *interested*

 

I had no idea that charging Paypal fees was against their TOS. Though I don't mind if someone charges Paypal fees. Why on earth should they have to pay for what I'm buying?