posted on January 7, 2001 05:08:53 PM new
I have bid on an item on e-Bay this evening. After bidding I went back to the auction to read over it again. At the end of the auctin the seller states that if you are going to pay with Pay-Pal you will be charged an extra fee. Well I was mad. So I got my wife to come and look at it. She works for a major credit card company and she said it is illegal to charge extra money when using a credit card. I used to own a retail business a few years back and I know we could not charge an extra for using a credit card and if we did and got caught we would have to forefit our merchant account. So how can this guy do this and get away with it. Should I contact Pay-Pal or what should I do about this.
posted on January 7, 2001 05:13:54 PM new
it is illegal to charge a fee, or surcharge, if someone wants to use a credit card. you could contact paypal, and also maybe ebay safe harbor, as it should be against ebay policy.
posted on January 7, 2001 05:39:46 PM new
It is against eBay's rules. It is not against PayPal's rules. PayPal has no rule on it, either on its site or according to PayPal Damon.
Legally, PayPal is a gray area since it is not strictly a credit card service. A seller has no way to know if you plan to use a credit card, e-check or the cash balance in your account.
posted on January 7, 2001 05:44:39 PM new
Plus...the credit card company cannot take away the seller's merchant account because the seller doesn't have one...paypal has the merchant account.
It is against the ebay rules but I doubt if it is against the law.
posted on January 7, 2001 06:04:41 PM new
I think what the seller is doing is, charging the 35 cents because paypal charges him 35 cents. I have seen this many times on ebay.
posted on January 7, 2001 06:08:18 PM new
what you might need to do is look into the state laws of your state and of the state the seller is in. some states have made this illegal.
posted on January 7, 2001 06:20:09 PM new
I know this does not answer your questions directly concerning paypal but, Mastercard does not allow ANYONE to charge a surcharge unless thay charge it on every form of payment they accept. Also, A merchant cannot require your MasterCard transaction to be above a minimum or below a maximum dollar amount. Please see this website for any questions regarding Mastercard: http://www.mastercard.com/consumer/cust_serv.html. I would assume that since Mastercard and Visa go hand in hand that they would have a similar "rule".
posted on January 7, 2001 06:24:02 PM newIs This Legal????
Yes, it is. And it isn't against VISA/MC regulations either.
But is IS against ebay rules.
The reason that it's legal is because the laws (and VISA/MC rules) against passing on a credit fee apply only to the holder of the merchant account. PayPal is the holder of the merchant account. The seller that accepts payment through PayPal is not. The fee PayPal charges sellers is not a credit card fee. It's a fee for a service. If it was a credit card fee, PayPal would be breaking the law when they charge the seller for a credit card payment.
But since PayPal charges a fee for ALL transactions, even those that take the funds from an existing PayPal balance or a bank account, they are NOT passing on credit card fees to the seller. Therefore it's impossible for the seller to be in violation of the law (and VISA/MC rules) when they pass on the PayPal fee. The seller never gets charged a credit card fee by PayPal and it's impossible to pass on a fee that you never pay in the first place.
And even if the seller was charged a credit card fee by PayPal (which we know doesn't happen)and the seller passed that fee on to the buyer, the seller still wouldn't be in violation of the law or VISA/MC rules.
Why? Because the law and credit card rules don't apply to the seller at all in this case. The seller doesn't have a merchant account. No merchant account, no violation. PayPal would be in violation however.
posted on January 7, 2001 06:47:46 PM new
I asked PayPal basicly the same question and heres the reply they sent me:
Dear Mr. Ayer,
Thank you for contacting PayPal.
PayPal offers our members access to the world's leading online payment
service. As our network of members has grown, an increasing number of
sellers of goods and services are accepting payments through PayPal.
PayPal charges a fee to our Business and Premier account members when they
accept a payment. However, we neither endorse nor do we, in any way,
recommend the pass-through of fees by Business or Premier account sellers
to offset their costs of doing business through PayPal. The decision on
how much to charge for goods or services, and how to itemize the charges,
is made solely by the seller of the goods or services. It is the seller's
responsibility to state clearly the total charges for goods or services,
including any surcharges, discounts or shipping and handling fees.
Similarly, it is the buyer's responsibility to decide whether to pay the
charges sought by the seller. PayPal is only a payments service and is not
a party to the transaction between buyers and sellers. As a result, PayPal
is able to keep costs low and convenience high for both buyers and sellers.
If you have any further questions, please feel free to contact us again.
Sincerely,
Lisa
PayPal Customer Service
So additional fees for PayPal usage is "legal"
Bruce
Particularly note what daphne@ebay has to say on the matter of tacking on a surcharge for any payment methods.
[ edited by eventer on Jan 7, 2001 07:37 PM ]
