From information viewed on eBay, passing along PayPal fees is not allowed (these are statements viewed by representatives of eBay).
Please explain this Damon. There are only 2 possibilities here:
1) PayPal does not charge their business/premier users fees for accepting credit cards. PayPal charges the fees as payment for a service performed on behalf of the sellers. This is how you justify charging for payments from bank accounts and existing PayPal balances in addition to credit card payments. By charging for ALL transactions and not just for credit cards, PayPal avoids violating the VISA/MC regulations which prohibit passing on credit card fees to the customer (in this case eBay sellers).
If this be the case, then an eBay seller charging a customer a fee for the use of PayPal is completely legal and within eBay rules as it is NO DIFFERENT from charging the customer postage fees to ship their item (in both cases you're passing on the cost of a service to the customer, NOT passing on credit card processing fees).
2) PayPal does in fact charge business/premier account users a fee for processing the credit card transactions. In this case PayPal is in blatant violation of VISA/MC regulations which prohibit charging the customer a fee for using a credit card.
So Damon, which is it?
Number 1 or number 2?
I couldn't get an answer in the other thread so I thought I would try again here. You don't have to elaborate on your answer, just a simple 1 or 2 will suffice.
Can we get PayPal's clarification on this or are we to remain in the dark forever?
[ edited by abingdoncomputers on Oct 27, 2000 04:25 AM ]
There is a 3rd possibility. EBay has decided that surcharges for payments aren't allowed.
Giving you the benefit of the doubt here, do you know of any such eBay policy? If so, would you care to share a link with us?
If not, I'll wait for Damon to post a link or provide something concrete to back up his previous statement.
I have seen emails from eBay in the past that said to check with PayPal on this and see what their policy is. This leads me to believe that eBay is leaving it up to PayPal.
Why? Because eBay prohibits passing credit card fees on to the the bidder. If PayPal is indeed charging a fee for a service as opposed to a credit card surcharge, this is not against eBay rules. We do it all the time for postage, insurance, etc.
If PayPal is indeed passing on a credit card fee to the sellers, then PayPal is in blatant violation of their merchant account aggreement and VISA/MC rules.
There is no third possibility. Either PayPal is passing on the credit card fees to the sellers (not allowed) or they are charging a fee for a service which is allowed.
Damon's opinion is welcome and respected, but it is PayPal's official policy that counts. And it's PayPal's official policy that I would like to see.
I have deleted your post because it contained the url to another Message Board which is not permitted under the Community Guidelines. You are welcome to post again but please omit the url.
posted on October 27, 2000 07:20:42 AMI have written Safeharbor about this and they said it was PayPal's call for the reasons already stated.
EBay's giving two different signals if that's the case.
While I can't offer the link this is from an eBay person support member.
Discounts to members who pay a certain way or surcharges for specific payment types are not allowed. The Listing Policy says.."An eBay seller may not charge a fee, often called a "credit card surcharge," ...which means even if you call it something else, but it is a surcharge based on payment method, it is not allowed.
[ edited by uaru on Oct 27, 2000 07:28 AM ]
While I can't offer the link this is from an eBay person support member.
Discounts to members who pay a certain way or surcharges for specific payment types are not allowed. The Listing Policy says.."An eBay seller may not charge a fee, often called a "credit card surcharge," ...which means even if you call it something else, but it is a surcharge based on payment method, it is not allowed.
Question I emailed to eBay SafeHarbor:
Since PayPal now charges sellers a fee for their services of transferring money from any source (not just credit cards), is it against eBay's rules to charge an extra fee to a customer if he/she chooses to use PayPal? I can't see as this is any different from charging the customer a shipping fee or insurance fee as they both involve passing a fee for a service on to the customer. Please advise as per eBay policy in this regard. Thank you.
This is the reply I received from Safeharbor:
As far as I can tell this would not be in violation of any eBay policy. If Paypal charged sellers a fee for credit card transactions only then passing on that fee to a customer would be prohibited. I would recommend that you contact Paypal however and get a clarification from them as they may have a rule against it.
I guess we're both right depending on who happens to answer the email at eBay. Since Safeharbor is in charge of "enforcement" at eBay, I will take their word for it over customer service.
posted on October 27, 2000 12:08:28 PM
Remember the recent thread with an answer from eBay that said it would be "sleazy", but not prohibited....was that in answer to this same question, or one slightly different?
Or has eBay changed the rules again without advising anyone? (This has always frightened me. When I first started on eBay, I attempted to read and comprehend the rules, so I could avoid violating them; but I can't wade through it all every day to see if they have changed anything!)
posted on October 27, 2000 12:10:52 PM
"I would recommend that you contact Paypal however and get a clarification from them as they may have a rule against it."
posted on October 27, 2000 12:58:38 PM
"2) PayPal does in fact charge business/premier account users a fee for processing the credit card transactions. In this case PayPal is in blatant violation of VISA/MC regulations which prohibit charging the customer a fee for using a credit card."
Just an additional thought: Perhaps VISA/MC defines the credit card holder as the 'customer'...which might open the door to the charges being passed on to us sellers.
Being a middle-man, Paypal has two 'sets' of customers (although there are 'sub-sets' within these two groups). Undoubtedly, it would be a violation of TOS (and illegal in some states) to pass the cc charges on to the consumer, but there may be a loop-hole here, as we (the sellers) are not the consumer/cc user.
Again, just a thought.
PPD should be here shortly to tell you to post your question somewhere else, so most people won't see it.
posted on October 27, 2000 03:12:23 PM
Why do I have a feeling this is yet another "unsettled area of the law?"
________
I never had one, and I didn't want one, and I don't, so now I do...
posted on October 27, 2000 03:45:00 PM
eBay isn't making up the rules about credit card surcharges - they're enforcing the policies/laws already on the books for credit card companies. It is a "given" that if the seller offers Mastercharge or Visa, they can't add a surcharge.
The question nobody seems to have a consistent answer for is whether PayPal (and Billpoint and the other payment 'facilitators') fall under the existing regulations.
Some are of the opinion that the regulations broadly encompass these payment facilitators.
Others feel that because they aren't collecting the money (PayPal, etc., is), regardless of whether a credit card was used, it is okay to pass the fees along to their customer.
Some feel it is acceptable to pass along the fee, but only for non-credit-card payments (I'm not quite sure that sellers are actually making this discrimination, however.)
And others point out that no observer can tell whether it was a credit card payment or a simple account transfer or e-check.
I think it's probably safe to take a middle-of-the-road stance: the seller needs to decide for himself how much risk he wants to take in passing along the payment facilitation fees to the buyer - IOW, he may or may not be reported by a passer-by and reviewed by an eBay employee who is of the first opinion.
posted on October 27, 2000 04:03:12 PM
PayPal really needs to establish its own policy on this and stop relying on eBay's rules.
The uses for PayPal extend BEYOND eBay.
And for the protection of its customers on BOTH sides of the transaction, PayPal must take a stance on this.
What happens to the off-eBay seller who pi_ses off a customer by trying to pass on the PayPal fees? The customer complains to Visa or Mastercard or PayPal.
Will PayPal freeze the seller's account until it figures out its own policy on the matter?
PayPal needs to take a proactive, rather than reactive stance on matters of its own policy.
I'm sure some of its users are tired of writing policy for PayPal.
posted on October 27, 2000 04:45:03 PM
I've seen auctions that charge a handling fee and then issue a discount to the payment methods the seller prefers (those wihout a fee). I'm no rocket scientist and I see what's being done and it looks "cheap and manipulative" to me. Rather than put those terms in my listing I either accept the fees or not accept the payment method.
As far as a web based business doing the same thing it would look even more "cheap and manipulative" and I'd be surprised for a merchant to do that.
posted on October 27, 2000 04:58:27 PMeBay isn't making up the rules about credit card surcharges - they're enforcing the policies/laws already on the books for credit card companies. It is a "given" that if the seller offers Mastercharge or Visa, they can't add a surcharge.
For a whole lot of situations, the issue of credit card charge pass-thru is not covered by law, but rather by contract between credit card issuers and credit card merchants.
The eBay rule is purely an eBay creation. eBay is not in any sense a law enforcement agency.
eBay's authoritarian endeavors seem motivated by an attempt to make their life simple.
posted on October 27, 2000 06:06:01 PM
Well, when life gets un-simple for eBay it costs them money and their stock might drop, so in an effort to save themselves the trouble they make up convenient rules and force others to live by them.
The economic result, as someone has already pointed out, is that the seller just jacks up his price in general so he is covered regardless of how people choose to pay.
I totally agree that the uses of PayPal extend beyond eBay. Right now, a person I know is considering whether to use PayPal for a non-auction sale involving several thousand dollars worth of items. It would behoove PayPal to resolve the gray areas so that people like my acquaintance are not afraid to use PayPal.
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I never had one, and I didn't want one, and I don't, so now I do...
posted on October 27, 2000 06:23:04 PMIt would behoove PayPal to resolve the gray areas so that people like my acquaintance are not afraid to use PayPal.
posted on October 28, 2000 06:02:31 AMnetlawhopeful "I totally agree that the uses of PayPal extend beyond eBay. Right now, a person I know is considering whether to use PayPal for a non-auction sale involving several thousand dollars worth of items. It would behoove PayPal to resolve the gray areas so that people like my acquaintance are not afraid to use PayPal."
Perhaps you could suggest that they would be better served by another service such as PayDirect or ExchangePath...
