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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
pmkalby
130 posts
 
Wheee! Thanks Mezmo. From now on I will be offering 3% off for "cash" in case the buyer is in a state that prohibits surcharges. FYI, I can't find any similar language in the Oregon revised statutes, but I did find this table, a compendium of state comptrollers and how they deal with credit card fees on licensing apps:

http://www.nasact.org/techupdates/downloads/surveys/06_02-Ecommerce/Table13.pdf

A search for "credit card surcharge" turns up multiple instances of gripes about all types of surcharges, companies charging customers to use credit cards, etc.-- Seems like this is pretty state-dependent and not very well controlled.

A list of states that have codes against CC surcharges: California
Colorado
Connecticut
Florida
Kansas
Maine
Massachusetts
New York
Oklahoma
Texas.

That's per: http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html#C

Apparently the truth in lending act that expired in 1984 precluded credit card surcharges, but since its expiration it's been up to the states themselves.
leftistelf
87 posts
 
I'll point out that PayPal charges a surcharge, so its quite ironic that the company that says "don't use surcharges" uses a surcharge.

PayPal should drop its 2.9% fee as its in violation of the same rule its trying to implement.
tbg
5,263 posts
 
Like many state laws, this is unenforcable, especially out-side the state enacting it. Consider what happens if you are in a state without the law and a state with the law seeks to act.

This is much like seeking sales tax on item purchased on the internet. The states can threaten business with outlets within their state, but the reality is that the sales tax will die because of the internet. Consider how sales taxes would be gathered on purchases from Mexico based but really American firms.
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