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PayPal Surcharge

I have noticed alot of people add a (3% or so) PayPal fee to their items and I wonder if everyone is aware, that is against the user agreement. It seems that PayPal looks at sellers as "merchants". This is cut from the Paypal website:

-No Surcharges. Under Visa, MasterCard, Discover and American Express regulations and the laws of several states, including California, merchants may not charge a fee to the buyer for accepting credit card payments (often called a "surcharge"). You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment. This restriction does not prevent you from imposing a handling fee in connection with the sale of goods or services, as long as the handling fee does not operate as a surcharge (in other words, the handling fee for transactions paid through PayPal may not be higher than the handling fee for transactions paid through other payment methods). Nor does this restriction apply to Pound-denominated transactions by sellers residing in the United Kingdom listing items for sale on a UK-based website.
dill
wdhsvbgod
22 posts
 
If you, as a seller, accept only PayPal as a method of payment, then you should be able to charge whatever handling fee you want, as it will not be higher than the handling fee for any other method of payment that you accept.

Am I reading that cut from the PayPal website correctly? They don't actually use the phrase "that you accept". Is it implied? I think so, but I'm not sure.

Even if a seller accepts other forms of payment (such as money orders), couldn't he/she effectively make up a 3% handling fee for that payment method (based on time and distance to the bank to cash and/or deposit the cheque)? Then a 3% handling fee for PayPal transactions would still be acceptable by PayPal standards.

I am not advocating, I am merely posing questions.
mephisto
15 posts
 
Well said Thsalmon! I fail to see why the seller would have to absorb this charge when Paypal is chosen by the buyer as the method of payment. If the buyer doesn't want to absorb the Paypal charge then he just has to go with another payment method. My answer would differ though if Paypal was the only method of payment accepted by the seller or if the seller insisted on Paypal being used for payment. In any event, there is a very simple solution to your problem: simply ignore the ads where the seller is asking the buyer to assume the Paypal charge or just don't use Paypal for payment.
karls
332 posts
 
Geez Dill, I'm impressed. I didn't think anyone actually read that boilerplate. Figures that California would be leading the charge as usual into making one more free market choice bite the dust, thus once again screwing everyone in the name of protecting them.

Since we as sellers can't control whether a buyer pays via credit card or via bank transfer (both options in paypal), I can't see how this is enforceable. Besides, as thsalmon points out, you can always offer a discount for cash or equivalent.
vectorman67
42 posts
 
I've noticed that, on Ebay, this restriction has always been more strictly monitored. My guess is that, in the end, this restriction is really geared more for those whom have made it a business to sell online, rather than for those of us simply selling off personal merchandise.

But, since I'm a buyer most of the time, I'm with Thsalmon... 3% discounts!!! I don't know why sellers just don't factor the fee into their pricing, and as Thsalmon notes, simply offer a discount for other methods of payment. This way, the Buyer would at least believe he's getting a deal.
rockvirgo
587 posts
 
Thanks for your post. My gut reaction when I see the Paypal surcharge in an ad is problematic, nickel-dime seller. It becomes especially ridiculous on items priced under a couple of hundred bucks.

Credit card processing is an arcane and labyrinthine set of rules and procedures. Believe it or not, but compared to merchant services companies who impose monthly statement fees, monthly minimums as well as hefty interchange fees for sub-optimal transactions, all on top of their own 2 - 3% discount fees, Paypal is an amazing bargain for the occasional seller.

In my experience, no matter how fair a listing is, most buyers jostle for a deal. Competition works. Our transactions are already complicated with haggling over price, shipping and insurance. Streamlining the process by eliminating the upcharge issue makes good sense. If a seller offers the convenience and timeliness of Paypal up front, he/she ought to take the fee on the chin as a cost of facillitating trade.
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