posted on June 8, 2001 01:15:39 AM new
This from AuctionBytes NewsFlash:
PayPal "Simply" Increases Fees
PayPal is "simplifying" its fee structure for payments received by Business and Premier accounts. Effective June 29, a single variable rate of 2.2% plus a flat fee of 30¢ will apply to all payments, regardless of payment size or funding source. Currently is a flat fee of 30¢ for transactions under $15. The new fee structure adds 33¢ to a $14.99 transaction, costing sellers 63¢ instead of 30¢. (Thanks to an alert reader for bringing that one to our attention!)
posted on June 8, 2001 03:52:06 AM new
Here's the complete note from PayPal.
(They're not *increasing* fees, they're *simplifying* their fee structure. Yeah, right)
On a 9.99 sale, ebay's fees are 30 cents plus 5% of sale price (80 cents). PayPal's fees would be 30 cents plus 2.2% of TOTAL amt. (If shipping is $5.00 priority mail, PayPal will charge 30 cents plus 2.2% of 14.99 or a total of 63 cents.)
Notice also that it doesn't matter whether the money comes from a credit card or from money you already have in your account. My bank doesn't charge me to write a check against money in my account. Yet now - if I merely want to send some money already in my account to someone (let's say $14.99), it'll cost the other person 63 cents in fees from PayPal. And all they've done is transfer money from one account to another.
I'm not a big seller - I've kept PayPal merely as a convenience to my customers. But now I'm going to drop it. I think I've been understanding - they need to make money too - but 63 cents on $14.99 is too much (esp. if it merely involves bookkeeping, no credit card charges).
Notice Date: June 6, 2001
Effective Date: June 29, 2001
To cover the cost of processing merchant related chargebacks, PayPal will assess a $10 fee to sellers who are determined to be
at fault for credit card payment chargebacks. The $10 fee will be waived in those cases where the sellers have fulfilled all of the requirements of PayPal's Seller Protection Policy. The $10 fee will also be waived for all sellers participating in the PayPal Preferred program.
Notice Date: June 6, 2001
Effective Date: June 29, 2001
PayPal is simplifying its fee structure for payments received by Business and Premier accounts. A single variable rate of 2.2%
plus a flat fee of 30¢ will apply to all payments, regardless of payment size or funding source. The $5 maximum fee will continue to apply to eCheck payments.
Notice Date: June 6, 2001
Effective Date: June 15, 2001
Effective June 15, 2001, there will no longer be a $5 Debit Card
Issuance Fee. Debit cards requested after March 15 will no longer
be charged this fee if the card was not used within 90 days.
Notice Date: May 14, 2001
Effective Date: June 6, 2001
Effective May 30, 2001 the Sending Limit for Unverified accounts
will be raised from $250 to $1,000. All accounts opened prior to
May 30, 2001 will have their Sending Limit increased to $1,000.
As before, once a member reaches his $1,000 limit, he will no
longer be able to send money with his account until he has become
Verified by adding and confirming a bank account.
posted on June 8, 2001 05:41:45 AM new
I have been using paydirect for months. I really like it. It is free. They do get a little bogged down on Sunday nights but besides that I haven't had a problem. I advertise it in my auctions on Ebay and many of my bidders use it. I thought I would notice maybe less bids or something when I stopped using paypal. I started with them but stopped when they first started charging fees. I didn't notice any change in sales. I really like Yahoo's paydirect. I think at sometime in the future they may start charging but never will they charge how much paypal does and if they do it won't be at least until the next busy season.
posted on June 8, 2001 05:57:02 AM new
I'm with sadie999 on this one.
There is no way I can run my $1.00 auctions and stay out of the hole with eBay & PayPal.
Either they(buyer) diviy up $.50 for the transaction under $15.00(for paypal or Billpoint-you know there next)) or they can go buy a MO for $.75 and $.35 for a stamp and mail me the payment.
With sales in the crapper for this time of year, WHY does everyone think it is a good time to raise fees?
It makes better sense to raise them in the fall when the xmas buying starts and sales are GOOD!
posted on June 8, 2001 06:04:00 AM new
Dear PayPal,
Please use the extra $.33 to hire someone who understands marketing.
I've increasingly seen my customers asking for BillPoint over PayPal because BillPoint is shouted all over ebay.
I've seen more and more sellers dropping PayPal because of the problems there and you've just insured more leave.
Perhaps you think you are going to make it up in volume. Perhaps you think that the vast majority of the sellers don't read boards like AW & will even KNOW about the "restructure". But eventually enough will.
When you are #2, you don't raise rates, you try harder, offer better service for at least a comparable rate. Perhaps the additional $.33 will help you find someone who understands that concept.
I understand increased costs & understand your need to cover them. But you are also in a business that is highly sensitive to price increases, especially when there are quick & viable alternative available.
You might want to take that new hire over & let them look at CCNow. When they first came out, many of us signed on even at the 9% rate because it was an opportunity to offer credit cards. I haven't used my CCNow account in years. Pretty soon I expect my PayPal account to be in the same dead file as my CCNow account.
Guess we'll all be getting a few more neutrals for not taking PayPal but I'm off to remove them from all my templates & my website.
posted on June 8, 2001 06:49:20 AM new
I have an update on the fee increase. I contacted Paypal this morning. They stated
the fee increase has ALREADY occurred, effective this past Tuesday. They increased their fees without notifying their users. I find this to be inexcusable. First, they lure sellers into applying for accounts by offering no transaction fees. Sellers start to use Paypal and buyers start to expect sellers to accept it. Paypal then increases fees. I didn't appreciate this, but I accepted it. I can't accept this latest fee without the courtesty of even notifying me.
posted on June 8, 2001 07:01:13 AM new
Kristie,
I don't think your paypal rep knew what they were talking about, I have had several <$15.00 paypal payments last night and this morning, and they still charged just the $0.30.
posted on June 8, 2001 07:03:37 AM new
Well if eBay uses its head on this one and keep Billpoints fee the same or maybe even lower them, they may very well succeed in what they've been trying for all along.
Monopolize EVERY ASPECT of a transaction.
Paypay seems to be doing a good job in helping eBay achieve that goal.
As someone was saying earlier, since I started taking Billpoint, I get 3 billpoint to 1 paypal.
If it gets to bad with either one of them I'll go back to my merchant account. A flat %5.
So go ahead PayPal, do your thing, don't be surprised to find youself behind the 8-BALL.
posted on June 8, 2001 07:18:07 AM new
I am not sure where to look, can someone post a new cost comparison chart between paypal & billpoint. I think it is time to switch if the price is right, the majority of my sales are under $15.00, at least half pay using paypal, now the fees will double, if billpoint will save me a little, I will say goodbye to paypal.
posted on June 8, 2001 07:19:46 AM new
I think I will just stop mentioning PayPal altogether--I really don't want to have to find a way to cover this "simplified" expense. We've got a postal fare increase coming up--I don't like to hit my customers with two increases inside of a 30 day period. The timing on this is the pits--right in the middle of the summer slump and with a postal increase. Very poor strategy.
posted on June 8, 2001 07:26:28 AM new
I've now had a second cup of coffee. I've taken a bunch of deep breaths. And, the anal-retentive BS in Accounting part of me did a mini spread sheet.
Straight up percentage wise, I still do very well even with the increase.
But dollars is dollars and time is time.
I think I'm going to have to bite the bullet on this one and finally start adding a handling charge to my shipping. I'm going to start a new thread and ask for advice so I don't derail this one.
But to the people at PayPal who once told us "always free," you folks are just plain crooks. You lie and deceive. You are no better than any thug on the street except you use a computer instead of a gun.
posted on June 8, 2001 07:37:19 AM new
We cannot afford this increase. There is not enough money in the sales we make to cover it.
However, we have been experimenting with a new type of CD packaging for our buyers. It looks a great deal like the old packaging, but we use a special brightly colored sticker on the back of each envelope for added security. It also identifies each of these envelopes as having been paid by PayPal.
The cost to me of adding this brightly colored sticker for increased package security to our items is almost exactly 30c an item, and so we will have two shipping cost options:
1. Check or MO: $2.50.
2. Paypal (sent in special envelope with brightly colored security sticker) $2.80.
At least, I think that's what I'm going to do. I've got to go pull my husband down off the ceiling and see what he thinks.
posted on June 8, 2001 07:42:32 AM new
This may be a stupid question - so if it is, please just overlook and act like I didn't post....
I am fairly new to selling, having spent too many years in the corporate world. I know from experience that you cannot charge sales tax on labor and/or shipping charges. How can PayPal charge fees and make a profit off the shipping when no one else can?
posted on June 8, 2001 09:12:08 AM new
This is just another effort to drive the lower price point sellers away.
I'm with Sadie on having to pass the cost along in a small handling fee. Also on the liars and thugs thing, too. I feel like I've been suckered. I understand needing some fees but this is too much!
Their logo is coming out of my auctions from now on. And my wording will change to "prefer BillPoint".
We can always offer a small discount for payments made with check or MO. That's perfectly legal.
posted on June 8, 2001 09:40:53 AM new
"prefer billpoint"-
Not sure about that one, I've looked into them and they offer no seller protection.
Not sure if you read TAG notes, but they don't suggest it either.
I don't work for TAG, Billpoint, or Paypal.
Anyone have experience, suggestions for anything else...I just feel weird about letting Ebay control every aspect of the sale.
I have my own merchant account(4years), but buyers feel "weary" of it I guess. It's funny, because I have good feedback, yet a buyer would rather have yet another party in the soup, not trusting me with their info. Low fees on my Merchant account, the more I do, the more they LOWER it, gee, why doesn't Paypal do this?
I've had good experience with paypal and bad ones, I never leave more then what I'm willing to part with in the Paypal account, because who knows, at least, that's what I felt like when a CS rep told me.."hmm, I will have to look into that"...on some question I had...way back, this led me to believe it's like the keystone cops over there. They're learning as they go.
I think your best option would be to control it yourself by getting a merchant account, affiliated with your bank. That is, if this is more then a hobby for you.
Reading over this, I hope you don't take this the wrong way, as I too am looking for alternatives, not trying to bash your "prefer billpoint" statement.
posted on June 8, 2001 09:56:09 AM new
Maybe you don't need to accept online payments at all. I quit accepting PayPal a while ago, and get my payments now by cash, check and money order. It hasn't hurt my sales, and not accepting online payments doesn't mean I can't offer fast delivery. I get plenty of feedback commenting on a speedy transaction- the ones below are from the first page of my current feedback:
as always fast easy transaction, recommended A+++
Got my item fast and in excellent condition, awesome seller!!!!
Item was perfect! Fast shipping! Great EBAYer! Would buy from again! A!A!A!A!A!
Beautiful Coin! Speedy shipping! A++ Seller!
Another terrific experience, great packing, fast delivery. Whata seller!
Fast shipping, great item, would buy from again. Thanks!
you took the words right out of my mouth. i've been wondering about this for a while myself. how is it fair that paypal charges sellers for shipping and insurance, when we have to shell out the full amount? there are places in the paypal form for both shipping and insurance, so it's not like these items can't be separated out. or am i wrong and these items are separated out if put in those boxes?? (don't laugh at me; i'm math-challenged!)
so my two big gripes with paypay are:
1. taking a bite out of the shipping and insurance monies i've then got to shell out myself - if this is in fact the case.
and,
2. increasing prices, yet not bothering to send me an email to let me know! i'm busy. all of us here, we're busy. it's not fair to expect us to monitor paypal's announcement boards to find this information. it feels sneaky.
paypal nearly lost me over that eoa opt-out thing (especially when we didn't even know it was happening so we had time to opt out). i went as far as checking out the other payment options then. i'm not sure what i'll do now. possibly only take money orders. possibly add a small handling fee - and i'd always put in my auctions 'no handling fees'
i feel like i'm slowly being bled to death. one fee increase after another. no sooner do we adjust to one, than another hits. i'm now thinking the 'boiling the frog' analogy is even more apt!
Thank you all for your comments. The fee increase is not going into effect until the date you see in the notification or on the web site.
I realize fee changes are never popular and I will be directing many of your comments. As a reminder, users that are PayPal Preferred can reduce these rates and these users are not charged charge back fees.
posted on June 8, 2001 01:55:29 PM new
What Damon is referring to in the Paypal Preferred Cashback program in conjunction with the Paypal Debit Card.
When you make a non-PIN purchase using the Paypal Debit Card and you a Paypal Preferred, you receive 1.5% cashback on the amount of your purchase.
To be Paypal Preferred, Paypal must be the only online payment service advertised in your Ebay auction listings.
How does this reduce fees?
On a $10 payment, Billpoint charges you a fee of $.35 (no deposit fee, because its less than $15).
Under the new Paypal Fee structure, the Paypal fee on a $10 payment will be $.52. However, if the user is Paypal Preferred and makes a $10 purchase using their Paypal Debit Card, they will receive a deposit into their Paypal account of $.15. Netting the fee and the cashback amounts, you end up with a net fee on that $10 of $.37.
On a $5 payment, the fees for Billpoint would be $.35 again.
For Paypal the net fee would be $.41 - $.08 = $.33.
posted on June 8, 2001 01:56:20 PM new
Ah, I see where you answered this in another thread.
The answer, boys & girls, is to become a PayPal Preferred Customer.
But wait..there's more.
To be a PayPal Preferred Customer, you must:
1. Sign up for their debit card
2. Advertise PayPal as the ONLY Payment Option.
But wait..there's more.
That doesn't get you any reduction in your fees.
IF you use your PayPal debit card for purchased, then you get 1.5% back. THAT'S the way you "reduce" your fees.
I hung in there with PayPal through the original charging of fees (okay, I never really expected it to remain free forever).
I hung in there w/the upgrade to business account mess.
I hung in there w/the chargeback & account freezing stories.
But this latest is the last straw. Removing PayPal logo from templates as we speak & it'll be off my website as an option shortly.
If PayPal thought this was a way to force us to Preferred like they did to business account, someone made a BIG assumption which I think they'll learn to regret.
