"PayPal Add 3%"

**Otto** · **02-15-08, 08:04 AM**

I'm sure some of you that buy and sell on forum "For Sale" boards, AudiogoN, etc. notice sellers indicating that the buyer should add a 3% charge for using PayPal. I think this is lame. Yeah, I know that PayPal is charging a fee, just like any credit card transaction. It's traditional for the seller to pick up this fee. When I go to Home Depot, do I get charged extra for using a credit card? No. When I buy a house, who pays the realtor's fee? The seller. No where else does the buyer pay these types of fees as they are forced to by cheapo sellers on the web.

eBay banned this practice a while ago.

I will never charge a PayPal fee to a buyer.

Is it just me, or do others find this practice annoying, out of the norm with respect to customary fees, and just plain cheap?

**WmAx** · **02-15-08, 08:22 AM**

It seems to me that it is unlikely the fee is not added to the cost of the item(s) being sold, if it is not specified as a surcharge. People specifying an added charge are giving people a chance to save money, even though this may seem tacky. When I sell on eBay, I include the cost of a PayPal processing transaction into my buy it now prices. I also include the cost of the eBay fees. You can't ignore the fees - they are a real part of the transaction.

-Chris

**Otto** · **02-15-08, 09:22 AM**

Yeah, you're right that the fees are there. Should it necessarily be so that the seller has no culpability in paying something as a cost of doing business? I'm fine with building whatever into the cost of the sale item. I do think it's tacky. Using PayPal affords both ends some form of protection. Although I have an opportunity to save 3% by paying by means other than PayPal, those other means are not very secure. One deal gone wrong will add up to more than many, many 3% fees (a friend lost $7k on a projector deal).

It just seems that PayPal has become the predominant method of paying. I would be more at ease with someone offering a 3% discount for using a certified check. Yeah, it's pretty much the same thing, but I just hate the little thing at the end "PayPal Add 3%."

**Bob_99** · **02-15-08, 09:40 AM**

Regarding the credit cards, there was a time that some places actually had a lower price for people paying cash but I forget if it was customers complaining or new legal rulings that made them stop it.

Bob

**Mike P.** · **02-15-08, 09:51 AM**

I agree that 3% is a small price to pay for buyer protection when using PayPal. As for credit cards, you do pay to use them. The banks call it "service charges".

**darkdan** · **02-17-08, 06:46 PM**

Customers hate seeing extra fees.

Build it into the price every time. If they use paypal you accounted for it, if they don't you increased your margin.

**imbeaujp** · **02-17-08, 06:54 PM**

In every store : There is no additional charge if you pay by credit card, but you could get a 4% discount if you pay cash... Just ask and they will deal it with you... You'll see.

**Sonnie** · **02-20-08, 12:16 AM**

Each of our Classified forums have the rules posted:

Please read Paypal’s Payments (Sending, Receiving, and Withdrawals) Policy under Section V (you must login to Paypal to access this page). There is a new regulation implemented that everyone should be aware of... quoted below:

Quote:

"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)."

I do not charge extra for PayPal and it would actually be illegal for anyone else to do the same.

**imbeaujp** · **02-20-08, 05:12 AM**

Yeh, I know that it is illegal. But reality is different...

If a customer tells you upfront that he will pay you CASH (no credit card), you can give him a better price (4-5 % lower). It's only mathematics.

This is not illegal to give a better price in the negotiation process.

What is illegal is to charge a higher price after you had negotiate it.

**Otto** · **02-20-08, 07:40 AM**

Thanks, Sonnie. I didn't know that. I may point that out to sellers in the future. In fact, I may point that out to AudiogoN, and let them impose the change to the sellers.

Jean-Pierre, I think it's OK to negotiate a discount for paying in cash if you can. I'm OK with that. I know that most places have built in the cost of accepting credit cards into the prices of their goods. Of course, many places aren't going to give you a cash discount, no matter how hard you beg.

**conchyjoe7** · **02-20-08, 01:29 PM**

I think it's tacky too, and thanks Sonnie for the info. At the same time, if some bozo is going to kill a deal over 3% Paypal or whatever fees...he/she can keep their product. I always determine what I will and will not pay for an item regardless of how the seller wants to break it down. I learned a long time ago that regardless of what someone may say something is worth, it is in fact worth exactly what someone else will pay for it and not a dime more.
Cheers,
Konky.

**Steve.** · **03-26-08, 07:35 PM**

I think it's lame too, but when given the opportunity to buy a $2200 preamp that's only six months old for $1k I paid the $30. I didn't want to but the seller only wanted to use PayPal. I have absorbed PayPal fees in all of my transactions, it's fair because the buyer will pay the same or more for shipping and I've always gotten more than I expected regarding auctions so it's a small price to pay.

**superchad** · **03-26-08, 10:12 PM**

You guys think its lame up till you sell a high priced item then it becomes real money, items on Audiogon go for thousands of dollars all the time meaing Paypal charges become hundreds of dollars. A business can absorb the cost because they do many transactions where cash only may be a deal breaker, plus they mark up there prices. It is not the same for an occasional seller and to call it lame sounds like sour grapes....you can always not buy the item if its that big of a deal or negociate so fee gets waived. ...and any smart seller factors in the fee no matter what is stated so your paying it one way or another.

**superchad** · **03-26-08, 10:19 PM**

Sonny here in part is what you noted and it clearly states you can charge for the service (but its how you word it that matters) and as long as you dont charge over the actual it is legal.....

"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)."

most people simply say "PayPal add 3%" and that is perfectly legal,

**Sonnie** · **03-27-08, 12:10 PM**

Actually... you are not supposed to charge for the service, but rather you can charge a handling fee that can absorb the service. The problem with that is most people do not charge a handling fee in all methods of sale... nor do they word it correctly.

**superchad** · **03-27-08, 03:55 PM**

Its just a silly game of words with a wink and a nod from Paypal but to say it is illegal is just wrong and I suggest if anyone takes that claim to court, not only will they loose but the court may not even bother wasting time and throw it out.

**Sonnie** · **03-28-08, 12:21 AM**

As far as individuals are concerned... that may be the case. However, you do not want to be a business and pass on this PayPal charge or a Visa/MC/Amex charge that is assessed on you. There are serious legal implications for doing so. Our finance business would not purchase some accounts receivables because of this exact thing... we would assume liability and our attorney said no way.

Let's not mislead anyone by telling them that "PayPal add 3%" is perfectly legal, because it is not and is also against PayPal's policy because it is illegal. We do not condone it and this is why we have it in our Classified Rules. Of course we do not condone any type of illegal activity here at the Shack, whether we agree with it or not.

**superchad** · **03-28-08, 12:52 AM**

I dont see it as illegal and its obvious most dont either but we all are free to interpret words the way we want...God Bless America!

**Otto** · **03-28-08, 07:33 AM**

Quote:

superchad wrote:

I dont see it as illegal and its obvious most dont either but we all are free to interpret words the way we want...God Bless America!

I guess you can interpret it any way you want, but I do believe it's specifically saying that you can't impose a "surcharge" or "fee" for using PayPal or credit cards. I believe this is the exact reason that it's not allowed on eBay. A long time ago, sellers would dump the 3% on the buyer in eBay transactions, but eBay barred that practice. I believe that action was due the laws alluded to in the PayPal rules snippet, and I would suspect that lawyers were involved to interpret the wording (as well as create the original wording).

So, yeah, I guess you can interpret it any way you want.

What would you think if the next time you when to Home Depot, they charged you an extra 3% for using your credit card?

**bobgpsr** · **03-28-08, 12:25 PM**

The funny thing is when you get a a haggling situation with a small business and you make offers and get counteroffers somethings you hear "Since you are using cash, I'll make you this offer...".

**Sonnie** · **03-28-08, 02:07 PM**

Quote:

I dont see it as illegal and its obvious most dont either but we all are free to interpret words the way we want...God Bless America!

It does not really matter how we interpret (it is actually already interpreted for us in black and white text) or how we see it... it is how it is... and that is what we will follow here at Home Theater Shack.

Quote:

"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")."

"PayPal Add 3%" is illegal and will not be allowed here at the Shack!

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