posted on October 31, 2000 06:53:59 AM new
This is bugging me! I won an auction a few days ago. When I get their message about sending payment, the seller's last line goes something like this: I now take Paypal. It's totally free & safe to use. If you choose to use this form of payment add one dollar to the total. I am a seller also & I don't like the fees Paypal are now charging {who does}! But by me using them,it wouldn't have cost her anything. It would have been a non-credit card transaction. Also, I don't know exactly what the fee would have been, the total due was $6.35. I mailed her a check instead for the payment & I won't be buying from her again. Should sellers be allowed to do this? I always thought it was the sellers cost of accepting credit card payments. Imagine getting charged 15% extra on all of your credit card purchases on top of the fees you already pay.
posted on October 31, 2000 07:03:32 AM new
While slightly different rates, PayPal charges fees for all transactions.....
Was the charge stated in the terms of the auction. The seller should not be changing them after the auction.
While there are rules and laws which prohibit credit card surcharges, no one has posted any rule or law which would prohibit any PayPal surcharge. eBay reps have posted various views on this on their Payments board and the only thing determined so far is for credit card surcharges.
posted on October 31, 2000 07:14:42 AM newBut by me using them,it wouldn't have cost her anything. It would have been a non-credit card transaction.
It would have cost her $0.12. PayPal's fees to the seller in a non credit card transaction are 1.9% of the total.
I always thought it was the sellers cost of accepting credit card payments.
The seller in the auction did not take your credit card- PayPal did, and they didn't charge you to do so. Check your statement when it comes in the mail- it'll say XCOM (PayPal) or something like that.
Imagine getting charged 15% extra on all of your credit card purchases on top of the fees you already pay.
Imagine if you were a seller- bidders used to buy a stamp and envelope (and sometimes, a money order) to send their payment to you. Now, buyers want to be able to pay online, and they expect the seller to pay the cost.
That being said, I think $1 is an awful lot to charge to cover this transaction.
posted on October 31, 2000 07:23:30 AM new
...but some people will make a buck any way they can. The extra $0.25 or so is worth it to me, to get instant payment and get the merchandise out the door. I absorb it in the profit on my merchandise.
always pickersangel everywhere
posted on October 31, 2000 07:32:46 AM new
"It would have cost her $0.12. PayPal's fees to the seller in a non credit card transaction are 1.9% of the total. "
This is only true for Business and Premier accounts, but not for Personal accounts that are still under their $500 limit, right? Just checking to make sure I still understood how things work.
posted on October 31, 2000 07:37:02 AM newThis is only true for Business and Premier accounts, but not for Personal accounts that are still under their $500 limit, right?
That's right, at least, as of 15 minutes ago. It might have changed since then.
posted on October 31, 2000 08:15:22 AM new
sc219...I would have done what you did and sent a check. I can get an envelope and a first class stamp for less than $1.00. Especially when the total amount due was so low.
While Paypal is a convenience and I use it whenever possible, I would have no problem paying an extra $.25 to cover the cost to the seller. But don't expect to charge $1.00 to cover $.12 worth of fees. And I would expect that this charge should be stated clearly in the TOS on the auction page.
********************
That's Flunky Gerbiltush to you!
posted on October 31, 2000 08:19:07 AM new
eventer:
Both Paypal and Billpoint do not allow their members to charge their fees back to a winning bidder. You can review this information at the following URL.
This statement was taken from a reply from eBay that you posted in one of the above referenced thread.
1) The eBay rep that posted this is directly contradicting the SafeHarbor email that I received on the same subject. SafeHarbor (which is eBay's "enforcement" division) told me that it was not against the eBay rules to add on a PayPal surcharge, as PayPal is not charging sellers for credit card transactions. They are charging sellers a fee for a service, just like postal insurance. They told me to check with PayPal however as it could very well be against PayPal's TOU. And since SafeHarbor is in charge of enforcement, I will accept their word over that of a customer service rep.
2) The statement above (by the eBay rep) is apparently incorrect anyway since Damon has posted on this board that there is no PayPal rule against passing on the PayPal fees. And after reading the TOU from start to finish I can't find one either.
posted on October 31, 2000 08:51:06 AM new
While there are multiple points of argument on this subject, I'll state my opinion. I'm a seller. After some indecision, I have decided to continue to take Paypal and absorb the costs into the price of doing business online. The debate to me is not whether passing on the costs to buyers is legal (it appears to be clearly legal to some people here, very gray area to other people here) but whether it is perceived by the buyers as gouging. I know if I were a buyer and a seller said I needed to pony up another small amount to cover their fees, the size of the amount wouldn't be an issue, but the request itself would leave me with a bad taste in my mouth. It just seems unprofessional to me, as if the seller isn't aware of the normal fees associated with being in business or can't afford a 25 cent fee. I would say nothing, because it's not worth arguing about over a small item, and I would pay the fee, but I would be soured on bidding on that person's auctions again. Just like I would be turned off by going into a shop and paying extra for using the bathroom. Yes, in theory this means they pay for the amount of toilet paper and soap I use, but charging me for that amount seems very tacky.
Different people will have different opinions and at some point we will all have to agree to disagree on this, but I'm letting you know where I stand. Yes, it does eat a bit into my profit margins to pay the 25 cents/1.9 percent....but I see that as a fair tradeoff for being able to take credit cards aand get my money quickly. In a real world situation I simply don't think it is possible to operate a retail type business and get out of these fees long term without looking stingy to the buyer----again, even if they say nothing (i'm sure I never would!) If the fees are that big an issue, perhaps you should consider not accepting credit cards at all?
posted on October 31, 2000 08:54:12 AM new
abingdoncomputers,
FYI, the letter I posted (which was received by me on 10/29) was sent by ebay SafeHarbor in direct response to my posing this very question to them.
So, as I acknowledge in my earlier thread, there may be dueling ebay SafeHarbor opinions on this, but if you look at the thread twelvepole posted you'll see apparently SafeHarbor is looking at the DIRECT charging of both PayPal & BillPoint fees in TOS.
Damon can say what he wants, but if ebay thinks something isn't allowed, isn't that the key? After all, we aren't putting our auctions up on PayPal, we are listing them on ebay.
The easy solution to all of this is just not to list your PayPal/BillPoint fees out DIRECTLY in your TOS but bundle them into your "handling fee" & don't delineate them.
Why "risk" getting shut down at all..just so you can shout from the rooftops that you are charging the customer?
posted on October 31, 2000 09:00:29 AM newIn a real world situation I simply don't think it is possible to operate a retail type business and get out of these fees long term without looking stingy to the buyer----again, even if they say nothing (i'm sure I never would!) If the fees are that big an issue, perhaps you should consider not accepting credit cards at all?
This is where I am heading. I sell a lot of items for less than $10, and the fees end up being a large part of what is left over after my cost is covered. I only started accepting online payments because buyers wanted the convenience, and it seems (to me, anyway) the height of hypocracy that they would expect me to pay for their convenience. Of course, I don't mind getting the payment sooner, but I don't need to.
edited to add...
As a buyer, I don't have a problem with paying extra to use an online payment service. When I send a money order by mail, I don't expect the seller to pay those costs, and I figure that, paying the online fees, I'm still saving money over a payment by mail.
[ edited by mrpotatoheadd on Oct 31, 2000 09:07 AM ]
posted on October 31, 2000 09:16:07 AM new
I believe it is illegal in most states to charge extra for using a Credit Card. However, it is not illegal to give a discount for not. In other words, you can not charge an extra dollar if the person uses a credit card, but can refund a dollar if they do not.
That is the law.
posted on October 31, 2000 09:17:12 AM new
eventer:
I agree completely that it is probably a poor business decision to pass on the PayPal fees to the customer. I won't do it, and I wouldn't do it even if eBay changed their TOS to explicitly state that it is ok.
The issue here is whether or not it is legal (as in state and federal law) and not against eBay and PayPal TOS. There is no question that it is ok from a legal standpoint. It is quite clear that the PayPal fees are not credit card surcharges. Otherwise PayPal would be in blatant violation of California law and VISA/Mastercard merchant account agreements. This is why they charge for all transactions, not just credit card transactions. To do otherwise is completely illegal as the fees charged to sellers would obviously be credit card surcharges.
The only real issue to even be discussed here is whether or not it is against eBay's TOS or PayPal's. We know for a fact that it is not against PayPal's TOU because it is nowhere to be found in there (for today at least) and Damon has stated as much.
Now that we have PayPal out of the way, the only issue left is whether or not it is against eBay's policy. If we read the information detailed in the eBay link provided to you by the SafeHarbor rep, this is what it says:
A seller may not charge the Billpoint fee for credit card payments ("credit card surcharges" to the buyer for using Billpoint. Credit card association rules and many state laws prohibit charging additional fees to buyers for use of credit cards.
For more information, please refer to "Credit Card Surcharges" on eBay's Listing Policies page in Safe Harbor.
This policy applies to Billpoint only. PayPal or any other payment service is not even mentioned. Of course eBay can make any policy they like apply to Billpoint, because it is their service.
The policy does not apply to PayPal transactions, since PayPal does not charge the sellers a credit card surcharge, therefore there is no credit card surcharge to pass on.
posted on October 31, 2000 09:35:11 AM new
abingdoncomputers,
Read it however you like. My question to SafeHarbor specifically asked about PayPal since I knew the BillPoint fees were already prohibited from being charged & that there was currently no specific mention of PayPal in their guidelines.
Their response back indicated they feel the same way about DIRECT charging of PayPal fees that they do about the BillPoint fees.
You say the policy doesn't apply to PayPal, ebay SafeHarbor says it does. If I understand twelvepole's thread, they've already shut down one auction because of it.
It's not necessarily a poor business decision to pass back the costs to customers, ALL costs are paid by the customer in some form or fashion or a business doesn't stay in business very long.
BUT, anyone stating in their TOS that they have a charge to pay for PP/BP fees is potentially risking unnecessary problems w/ebay.
Again, easy solution for anyone who wants to charge for it..put it in a handling fee & keep their mouth shut!
posted on October 31, 2000 09:47:25 AM new
eventer:
Again, easy solution for anyone who wants to charge for it..put it in a handling fee & keep their mouth shut.
I'm not trying to be argumentative with you. In fact I agree with you completely about the risk sellers take when dealing with SafeHarbor about any issue, right or wrong. Your "fate" depends entirely on which SafeHarbor rep takes up your case. That is the point here.
The rep that answered my email directly contradicts the rep that answered yours. And the link provided by your rep basically validates what my rep told me about the very same issue.
posted on October 31, 2000 10:00:05 AM new
"Now, now, we know much better than that...It is perfectly legal for Credit Card Prcessing companies to charge there "business" client
for their services. It only illegal for business to charge "credit card holders" a surcharge. Big Difference."
BUT, the post that started this thread makes it quite clear that this is NOT a credit card transaction.
So, can the credit card surcharge laws apply?
In the narrow world of eBay, whether or not
PayPal surcharges are okay is up to eBay.
In the world beyond eBay, it's up to much higher authorities.
posted on October 31, 2000 10:05:40 AM new
I got a Procedural Warning from ebay last November for stating in my auction that if a buyer used CCNOW that they would need to absorb half the cost, %4.5 and I would take the other %4.5. (Aren't we lucky that we don't have to pay that kind of fee now?) So, I do know that you cannot pass along a surcharge to the bidder.
I don't know how CCNOW is making it now, they get 9% of the total and you must wait 2 weeks to one month to get paid for the item. This is one of the main reasons I am so for Paypal, our options last year really sucked. Heather
posted on October 31, 2000 10:13:48 AM newNow, now, we know much better than that...It is perfectly legal for Credit Card Prcessing companies to charge there "business" client for their services. It only illegal for business to charge "credit card holders" a surcharge. Big Difference.
You are abosolutely 100% correct. It is illegal for a business to charge credit card holders a surcharge. This is why PayPal charges for all transactions and not just for credit card transactions. To do otherwise would place then in violation of the law.
PayPal is not a credit card processor as you refer to them above. PayPal is the merchant (business) that charges the customer's card through their merchant account (the actual credit card processor). PayPal is no different from Sears as far as placing the credit card charges is concerned. They use a merchant account as a part of their business model, along with bank account transactions (again just like Sears).
PayPal provides a service to their customers (sellers). A customer pays PayPal an amount of money to fund their PayPal account, either with a credit card or an ACH withdrawal from a bank account. PayPal then transfers some or all of this money to the seller. This is exactly what happens when you use a credit card to send cash to someone through Western Union. Sure, the money comes from a credit card. But the person receiving the money gets cash. He doesn't get a credit card. Same with PayPal. Your PayPal account ends up with cash in it. The original source of the cash is irrelevant. As far as the seller is concerned, the money was transferred to his/her account from another PayPal account, not from a credit card.
This is really very easy to understand.
PayPal: Business with a merchant account. They accept credit cards.
PayPal customer (seller): Business or private party with a PayPal account. They do not accept acredit cards. Why not? Because in order to accept credit cards you have to have a merchant account. There is no other way. Therefore, as an alternative, sellers can use PayPal's services in lieu of a merchant account. PayPal is the "business" that you refer to above. Sellers are the customers that you refer to above. PayPal cannot legally pass on a credit card surcharge to their customers (sellers). Therefore they charge for all transactions. The seller never pays a credit card surcharge to PayPal therefore it is impossible to pass on a credit charge surcharge to the seller's customers. You can't pass on something that you don't pay in the first place. But a seller most certainly can pass along fees charged for a service. This is why it's not illegal to require the buyer to pay for insurance.
posted on October 31, 2000 10:17:39 AM newWhy is this such a hard concept to understand?
It really shouldn't be. If buyers would read their credit card statements, they would see that any items they pay for through PayPal are charged by XCOM, not Joe's Widgets.
posted on October 31, 2000 12:16:23 PM new
Here is the email reply I got from ebay after making a complaint about a seller adding fees to the auction because of Paypal:
Hello,
Thank you for emailing your concerns to us.
I have reviewed the information that you have provided and wanted to let you know that the member has been warned against any future occurrence of this type of activity.
I would like to thank you for your help in keeping eBay a fun and safe place to trade.
Regards,
Antonia eBay Community Watch Team
______________________________
eBay Your Personal Trading Community (tm)
The seller has removed all mention of paypal
now. Including not accepting, but better than the added fees.
posted on October 31, 2000 01:42:27 PM new
I like the part where they say it's totally free and safe, but if they are going to use it, add $1.00 to the total. Seems it's not free then...
I personally don't think the seller should pass on the fee.
posted on October 31, 2000 01:51:49 PM new
I guess it's quite obvious that eBay has decided to emulate PayPal and make up their TOS as they go along. The message in this latest email is in no way in accordance with the eBay TOS, unless I have missed some part of it, which is always possible of course.
It is eBay's site and they can make any policy they see fit along these lines. But as of now, I still have not seen an official policy to support this interpretation of their TOS. And it's obvious that it is an interpretation, since 3 different SafeHarbor reps have given 2 different answers to the same question.
posted on October 31, 2000 02:16:30 PM new
I have said this a number of times before, but it is worth keeping in mind.
A seller's expenses are none of the business of the bidder. It is really bad form to burden the bidder with such information much less charge a bidder extra for making a timely payment. If you aren't making well over a 1.9% percent profit to stay in business, you are in bigtime trouble.
posted on October 31, 2000 02:47:52 PM newIf you aren't making well over a 1.9% percent profit to stay in business, you are in bigtime trouble.
Maybe not. Not everybody is a full-time business. What if you sell items from a collection as a way to finance additional purchases? You don't need much of a profit there. I don't depend on my sales to live on, but I still have no interest in giving money away.
As I said above, I only began taking online payment as a convenience for the buyer. Why would anyone expect that I should be the one to pay for that convenience?
The fact that a buyer wants the seller to pay to receive his payment is not a compelling reason for doing so. I'm sure your buyers would like free packing and shipping, too- do you provide that?
posted on October 31, 2000 07:57:51 PM new
mrpotatohead, I don;t begrudge the seller not taking a loss on using paypal, I just don't want to see the fees separated out. I would rather see you start with a little higher min bid.
Ain't Life Grand...
posted on October 31, 2000 08:32:53 PM new
there's a clear parallel between this issue and the endless shipping/handling threads, and I have always agreed with mballai -- buyers expect you to pay your costs out of your profits. if your profits are too small to allow you to do so, that's your problem, not theirs.
ebay: [email protected]
to the buyer for using Billpoint. Credit card association rules and many state laws prohibit charging additional fees to buyers for use of credit cards.
